May 2018 Edition

Nomination at MFS

Effective May 1, Mr. Joseph Skorski will join the portfolio management team of the MFS Global Equity Growth Strategy. Mr. Skorski, who was the equity research analyst at Japan's MFS office, has 20 years of investment experience and started at MFS in 2007. He will work closely with long-term investment managers, David Antonelli and Jeffrey Constantino, to manage the strategy. His nomination will have no impact on the investment objective and approach of the strategy.

Organizational update at Jarislowsky Fraser

On May 1st, 2018, the acquisition of Jarislowsky Fraser Limited (JFL) by Scotiabank was completed. The new board of directors of the firm will consist of four directors of Scotiabank and three of JFL; Pierre Lapointe, Maxime Ménard and Alexandra Jarislowsky.

The Investment Strategy Committee has a new member, Jeremy Schaal, CFA, who holds the position of Portfolio Manager - US Equity at JFL. In the course of 2018, Mr. Michel Brutti, CFA, will retire from the Investment Strategy Committee; he has been part of the committee since 1999.

At the global investment team level, Mrs. Alexandra Jarislowsky will occupy the newly created position of Director of Research in addition to her responsibilities as Senior Analyst.

As part of its governance process, Desjardins Insurance evaluates each fund offered on its group retirement savings platform on a quarterly basis to ensure compliance with its selection criteria.

• Personnel
• Investment processes
• Compliance with the stipulated management style
• Performance

The result of this analysis is that some funds are placed on a watch list that is updated every quarter.

For each fund on the watch list, the areas of concern are identified and then closely monitored. Funds will remain on the watch list until the situation has been resolved, or in the event that the concerns persist, until they are no longer recommended or are removed from the platform.

Our fund watch list, including a list of funds no longer recommended, is published quarterly in the Your news section of the plan sponsor services website (dfs.ca/plansponsor External link. Opens in a new window.).

Have you noticed we’ve been sprucing things up lately? First, Desjardins launched a new and modern logo that better expresses our approach to making things simpler for our clients. Soon after, we introduced our newly designed and ever growing Financial Wellness Centre on the Participant Services website. That’s just the start of an exciting period during which we will introduce the breadth of our new brand positioning.

We recently launched an ad campaign to introduce our new approach to the industry: “Always working in your best interests”.

To be sure, we’ve always worked in the best interests of our clients – it’s in our DNA – only now we’re talking about how we do this for – and with – you. It’s our way of letting plan sponsors and plan members know we recognize and are addressing their unique needs. Over the next year, you’ll see the very essence of what that means as we roll out the new look and feel with revamped materials and a new member experience, all designed to make it simpler for you and empower your plan members to work with and save with us.

From a client experience perspective, we think you’re going to really like the direction we’re going in as it is even more user-friendly than before, more reflective of the environment in which we, as Canadians, live and definitely brings a more exciting feel to it. That’s because all of us at Desjardins are genuinely excited about helping Canadians achieve financial wellness – and we want to spread that enthusiasm to you and your plan members.

Stay tuned to Essential as we’ll be sharing updates on the roll out of our new materials and much more.

The Pension Benefits Standards Act, 1985 (PBSA) provides that a plan administrator must use the “prudent person rule” when choosing default investment options for members who can make their own investment choices.

OSFI considers that a plan administrator could offer the same default investment option for all plan members, or the default option could be structured to provide different investments for different members or classes of members. OSFI also mentions two possible types of investment funds that a plan administrator could consider when selecting a default investment option; they include a balanced fund or a fund comprised of a portfolio of investments that considers a member’s age ( i.e. a target date fund). OSFI believes that, even if not required by the PBSA, the plan administrators who leave the investment option to members should document the process and rational for selecting the default investment option. The default option should also be well communicated to plan members and be reviewed on an ongoing basis.

Therefore, if you are a plan administrator with a federally regulated pension plan, we encourage you to look at your default investment option for your plan and make the required changes to meet your “prudent person” requirement.

The Financial and Consumer Services Commission of New Brunswick (FCNB), is offering a new portal to pension plan administrators. As of May 28, this portal will allow them to request or file their pension plan documents directly online. They will also be able to submit, among other things, applications for registration of a plan, amendments, or filing of the annual information report. If you are the administrator of a registered pension plan in New Brunswick, you are usually responsible for these tasks unless you have delegated them to your service provider (i.e. Desjardins Insurance).

To find out how to delegate your access to the Desjardins Insurance portal or to find out more about it on the portal, click on this link External link. Opens in a new window. and go to the "Pension Portal FAQ" section.

According to the survey, 62.4% of workers in Quebec between the ages of 35 and 54 know it’s important to have a good financial plan for retirement.

The survey evaluates workers’ retirement planning knowledge, attitudes and their behaviours. The results revealed that 71% of respondents have specific retirement savings goals, and 63% of respondents think they’re saving enough.

How much do you think your participants know about the importance of having a good financial plan for retirement?

For an overview of the results External link. Opens in a new window., see page 4 of the survey highlights (in French only).

A retiring allowance is the amount paid to employees in recognition of years of service when they retire, whereas severance pay is paid to employees when they lose their job. Here are some scenarios to help you get a better understanding.

"Matilda will be retiring and she has unused leave credits and vacation days. Do I include them in her retiring allowance?"

You can only include her unused sick-leave credits. Her salary, bonuses, overtime and accumulated vacation days not taken before retirement are excluded. Click here External link. Opens in a new window.

"Matilda wants to deposit her allowance into her group TFSA1. Can I do that?"

No. Retiring allowances or severance pays can only be deposited into a DC plan, SPP or group RRSP2.2

"Matthew is leaving the company and he wants his severance pay to be deposited into his RRSP. Do I need to make tax deductions at source?"

No. You don’t need to make any deductions when it’s a direct transfer to a plan. However, there will be a withholding tax if a withdrawal is made. Note that the transfer doesn’t affect the participant’s RRSP contribution room.

"How should I make this plan contribution?"

You need to make a contribution remittance that’s separate from your regular contribution remittance. You’ll then need to call Plan Sponsor Services to inform your plan administrator that it’s an allowance or severance pay.

For more information about retiring allowances, go to the CRA website External link. Opens in a new window. and review our memory aid (PDF, 284 KB) Opens in a new window..

Are you planning to go on vacation this summer? Good for you! But remember to:

1. Fill out the Authorization to access plan and/or personal participant information (PDF, 1.3 MB) Opens in a new window. form to designate the person who will be in charge of your tasks while you’re away, and to also authorize their level of access to the Plan sponsor services website.

   * Make sure to complete this authorization form so the designated person has their own access codes. You cannot share access codes because, for security reasons, we won’t be able to answer the caller’s questions if they’re not registered in our system, or if they have lost your access codes.

2. Train the person replacing you so they can complete the following tasks:
   • Enrolment
   • Changing personal information
   • Termination of participation
   • Contribution remittance