issue no. 12 july 2015

W is the williamson group’s client newsletter,providing insights and information on

industry trends and developments

plus

Wnewsletterbusiness matters:small focus, big rewards

participaction—parenting, playtime and the great outdoorsto change or not to change—there is no question

retirement planning—providing certainty in uncertain timesclosing the gap—protecting employees who are off on WSIB

the ontario registered pension plan—a questionable future

01

business matters

02

small focus, big rewards

why business matters?At the Williamson Group (TWG), we understand that small to mid-size businesses are the backbone of our economy. Our Business Matters team specializes in working with organizations just like yours. We are dedicated to helping our clients by offering expert advice, guidance, cost competitiveness, and risk assessment. As it relates to employee benefits, our team becomes an extension of your HR department. We focus on your benefits program so you can focus on what’s important to you—growing your business. We know that business owners are big picture thinkers who are highly motivated with strong ties to their community. Your time is precious and navigating items such as employee benefits can be tedious and challenging, by default putting it lower on the list of priorities.

Our goal is to save you time and resources by proactively managing your employee benefits program. We recommend solutions that make sense. After all, you are implementing a program to protect your most precious resource—your employees.

virgin groupsWhere do you start? Financially and legally, what are your responsibilities as a plan sponsor?

In our industry, businesses that currently do not have a plan are commonly referred to as ‘virgin groups’. New to the world of employee benefits, they are just beginning to explore the cost of implementing a plan, so their need for expert advice to help navigate the benefits arena is high. TWG works with these organizations by doing the “leg work” on their behalf—recommending products and solutions to meet budgetary and organizational needs.

Whether you are a business owner who is focused on cash flow and customer acquisition, or one who is concentrating on employee growth and market competitiveness, TWG is here to help you explore your options.

TWG’s second opinionOften, the businesses we meet with already have a benefits program in place. Some are interested in knowing if their plan is competitively priced, while others are looking to economize. The benefits arena is changing and organizations are increasingly making an effort to partner with industry experts—firms that can help mitigate potential risks, explain cost drivers, leverage industry partnerships and provide concise communication to educate on relevant topics.

If you already have a benefits program, ask yourself the following questions:

• Do you have information on what elements are driving the costs of your benefit program?

• Do you receive customized reporting with comparative data information?

• Do you have access to preferred carrier partnership agreements?• Is the benefits program providing value and is it well received by

your employees? Has it helped with your recruitment initiatives?

If the answer is ‘no’ to any of the above, we encourage you to set aside half an hour out of your day and schedule a second opinion with our team. We will listen to your concerns, discuss strategy and provide you with an overview of our service model. If feasible, we will develop a go-forward plan.

Shown in photograph (from left to right): Business Matters Team—Laura Brown, Jacquie Fritsch, Tammy Ryan, Beth Gibson, Rachelle Daviau

Meet Benjamin Martin.

Its 9:55 a.m. and Benjamin Martin has already updated his production schedule, dealt with an employee matter, spoken with a client, and is now preparing for a conference call.

Then—it happens. The phone rings.

Benjamin reluctantly answers. On the other end is a Consultant from The Williamson Group, requesting a meeting to discuss employee benefits. Looking at his watch Benjamin notices that his call is in three minutes, so—not surprisingly—he says he is ‘happy’ with his current plan arrangement and declines the invitation to meet. Benjamin’s busy schedule means that discussing his benefits program is probably not a top priority for him.

But it should be.

There’s no doubt that Benjamin’s intentions are good. He is diligent in his attempt to meet annually with his advisor for a renewal review—after which he promptly places the program back on the shelf until next year. In fact, the only time the plan is revisited at all is if a new employee is added, or a question about coverage crops up. It just never seems to be a good time for Benjamin to review employee benefits with everything else that’s on his plate—how can he possibly carve out half an hour to meet with someone, when he barely has time to eat lunch? So, Benjamin maintains the status quo and continues on with his busy day.

continued on next page >>

Benjamin Martin

0403

going globalBack to our friend Benjamin, who has now acquired a like-minded company in London, England. Even though it is a stretch for his modest Canadian company, the expansion opportunity for him was worth it. Furthermore, he has decided to hire three local nationals in Dubai, to assist with Asia-Pacific sales.

What this really means to Benjamin is that his mid-sized Canadian-born company has now gone multinational. He will need to assess the benefits currently offered to his newly acquired employees in the UK. Are they insured? Is he compliant with legally mandated coverages for that region? Is there a consulting firm currently holding contracts—if any are in place? And… well, what about Dubai?

Benjamin will need someone he can trust to help him source, secure and manage local employee benefits plans in all of the countries in which he does business. TWG—partnered with Asinta—can help. Joining the network in 2009, TWG is proud to be Asinta’s Canadian partner, providing clients with a comprehensive international reach and unique insights into the global benefits landscape. With experts and local resources at our fingertips, we have acquired a distinct understanding of the international complexities that face global corporations and organizations expanding abroad. If your multinational organization has employees in Canada—or if you are currently looking to expand your operation into Canada—let TWG guide your journey.

the TWG experienceYour company may be small in size, but at TWG we believe all of our clients should receive the VIP treatment. We are proud of our 95% client persistency rate and our elite advisor status within the industry.

TWG puts the needs of our clients and our colleagues at the core of everything we do by living according to the following values:

Service First + Caring = RelationshipsDriven + Ethical + Fun = Play To Win

The benefits landscape is changing and TWG understands the impact these changes have on our clients. We proactively manage and monitor client benefit programs by seeking out and developing partnerships that help manage rising health care costs. For example, we’ve established a partnership with a reputable nation-wide pharmacy to provide our clients with complimentary access to lower dispensing fees and drug costs. Further educational pieces advocating employee consumerism have helped lower the plan sponsor’s annual cost and provided cost relief to employees at the time of service.

“We are a start-up company and wanted to offer our employees a comprehensive benefits program while balancing the costs effectively. TWG provided us with a thorough review of our benefit options, carriers, estimated costs, and benchmarking against other start-up companies. They delivered on their promise of service excellence and were outstanding to work with—a great experience!”

—Clifford Fraser, Executive Vice PresidentEquiton Partners Inc.

“We were not satisfied with our previous consulting firm’s service. We felt that we didn’t get enough help when we faced a couple of “out-of-norm” situations. We interviewed a few benefits consulting firms and, in the end, we appointed The Williamson Group as they understand the needs of small businesses. We felt that they would provide us with better services and offer increased leverage when dealing with carriers, ensuring that our employees get the most out of their benefits plan.”

—Fu Liu, AccountantGendon Polymer Services Inc.

service mattersTime is money. Having a firm grasp on the performance of your plan is critical to understanding cost drivers, coverage gaps, and potential risks. We realize that you may not have time to dive into the analytics of your benefits program. The Business Matters team is comprised of consultants, benefit specialists and analysts who work behind the scenes to ensure that you have the your finger on the pulse of your program at all times. Understanding the cost-drivers of your program allows for informed decisions. Plan design modifications should be based on actual claims experience, not solely on band-aid solution to your bottom line.

Service is even more important when making changes to your program. Change can raise questions and concerns from employees. They want to know how alterations will impact coverage, coordination of benefits and, most importantly, personal out-of-pocket expenses. Our team customizes employee communications to help outline changes to streamline the process and save you time.

TWG extends its commitment to providing our clients with professional development opportunities to the small to mid-size business market by offering seminars on relevant topics such as human resources, WSIB and wellness initiatives. We provide a forum where our clients can take a few hours to learn and develop strategies that they can take back to their organizations to improve effectiveness.

you be the judgeIf you were Benjamin, would you have carved time out of your busy day to meet with us? As an entrepreneur, you carefully select your business partners with the hope that they will grow with you as your business evolves and be a partner for life. Our goal is to get to know our clients—to understand their business and their unique needs. We bring integrity and industry knowledge when advocating for our clients, but most importantly—we listen. Whether you are considering implementing a new program, or are simply interested in a second opinion, we are here to help.

Photography By: Katie Michiels, The Williamson Group

0605

the president’s perspectiveA message to our current and future clients:

2015 marks The Williamson Group’s 39th year. Can you believe it? When we started this business, we were all well aware that the success of the services we offered could only be validated by you—our clients.

We believed in what we had to offer. We believed in our products, and we believed in our commitment to service excellence. But in the beginning, the verdict was still out as to whether or not you would believe in it—and us—as well.

Over the years, we have come to know that, yes, our clients do believe. We have built strong relationships together, we have grown together, and we have learned from each other.

In fact, our stellar performance of the last few years is due in part to our fantastic and enthusiastic team at TWG, and in part because of our teamwork with you. It’s our service to you that drives our growth—and your TWG experience that drives our success.

At The Williamson Group, we view our client relationships as partnerships. Your unique asks become our inspiration to always reach further and perform better. We strive to make sure we can always supply you not only what you need now, but the innovations you’ll need in the future.

This edition of W highlights some of the things that we do well. We don’t sell, we serve (Business Matters—Small Focus, Big Rewards). We are watch-dogs, protecting and preparing clients (ORPP, WSIB action items). We provide clarity and build futures (Retirement Planning—Providing Certainty in Uncertain Times). We are trusted advisors (To change? Or not to change…there is no question).

With all that being said, we are excited for this 39th year—and everything that lies ahead. We are exploring new ideas, new product opportunities, and new integrations. However, what continues to guide our purpose is consistent striving to serve our clients, and each other, better.

Before I leave you to what I hope will be a great summer, I ask one simple thing.

Don Williamson, President

parenting, playtime and the great outdoors

participaction

Please mark your calendars for October 22nd and save the date!All clients are invited to join us this fall at RattleSnake Point Golf Club in Milton for our annual Client Conference, Think! We promise another stellar line-up of sessions, including a stirring keynote address from former NHL goalie and mental health advocate—Clint Malarchuk.

Space is limited so reserve your spot online today, and watch for full registration in September: http://holdmyspot-think2015.eventbrite.ca

I look forward to seeing you all soon.

Remember the perpetually cheery married couple from the Body Break segments?—ParticipACTION is taking a slightly more hardline approach this time around. The national non-profit organization—who strives to make physical activity a vital part of everyday Canadian life—is now taking a stand on parenting, playtime, and the great outdoors with all of its associated risks.

The ParticipACTION Report Card on Physical Activity for Children and Youth is the most comprehensive assessment of child and youth physical activity in Canada. Entitled The Biggest Risk is Keeping Kids Indoors, the report pulls data from various sources and includes recommendations aimed at everyone—from parents through to legislators and society in general. For the first time, the report also includes a position statement cautioning parents who are overprotective of their child’s play—keeping their child indoors because it’s perceived to be safer—that they are actually hurting their child’s long-term health.

with summer vacation poised to start, what could be timelier? The timing could not be better for parents to re-examine their views regarding their child’s physical activity levels. ParticipACTION’s report reveals that only nine per cent of 5-17year olds meet the Canadian Physical Activity Guidelines of 60 minutes per day of moderate to vigorous intensity physical activity. Studies consistently indicate that children have a tendency to gain more weight during the summer months, compared to the rest of the school year. With one in three Canadian children already falling in the ‘overweight’ or ‘obese’ classification, the time to act is now.

Related Resources: Visit www.participactionreportcard.com for the Full Report or the 2015 ParticipACTION Report Card Highlights, including the Position Statement.

“In an era of schoolyard ball bans, bylaws that restrict tobogganing, and parents’ frequent calls of “Be careful,” or, “Wait for me,” are we limiting our children’s ability to engage freely in active play outdoors? Over-supervising kids or keeping them indoors to ensure they are safe limits their opportunities for physical activity, endangering their long-term health. It’s time to get out of kids’ way. Let them play outside, and give them the freedom to occasionally scrape a knee.”

—The ParticipACTION Report Card on Physical Activity for Children and Youth, June 2015

the protection paradox Despite the common knowledge that Canadian children need to sit less and move more, there seems to have been a loss of balance between short-term safety and long-term health. What many adults recall as normal childhood play is often called ‘risky’ these days. Bring Back Play is a two-year ParticipACTION media campaign that promotes the benefits of unstructured, active play by tapping into nostalgia for the outdoor games parents used to play when they were children.

Children are overprotected to preserve safety. What some parents are failing to understand is that over-supervising kids and prohibiting active outdoor play has the adverse long-term consequences of sedentary behaviour —a lack of social skills and self-assurance and the development of long-term health issues, such as heart disease, obesity and Type 2 Diabetes.

In a world where parents are bombarded with negative media reports and crime statistics, a certain amount of parental anxiety for children’s safety and well-being is understandable and ultimately, perhaps the only effect that ParticipACTION’s call to action may have is to increase awareness and prompt re-evaluation of the boundary limits that parents set on their children’s safety and well-being.

But that, at least—is a start.

Deciding on a benefit plan change can be a daunting prospect—a serious commitment of your organization’s time and resources, both of which are not easily come by in today’s fast paced work environment. How will you know if the time is right for a change? You may want to start by considering the following areas.

why is it the way it is?Your current employee benefit booklet should be representative of your company’s short and long-term goals. If a prospective employee were to pick up a copy of your employee benefit booklet—what impression would they have of your company? What would a competitor think? The average employee benefit program—not including retirement savings—accounts for roughly ten percent of payroll cost. Make certain you are getting the best return on that investment.

the drive for changeRepeated annual renewal increases are a clear indication that a plan change is in order and, without a doubt, renewal increases are the most common drivers of plan change requests. As any carrier will attest, plan change quotes often include numerous variables—most of which are never implemented. People just freeze. They can’t seem to make that change. So think of it this way—if your renewal is constantly increasing and you’re not changing your benefit program, isn’t that the definition of insanity—expecting a new result without making any changes? The real question is, why is change not being made? Is it fear? Lack of knowledge? Poor timing?

The greatest risk areas—and the areas to focus on when targeting your plan spending—are Drug Spend, Pooling Charges and employee-paid LTD. On the Extended Healthcare side, the recent drug spend honeymoon, which resulted from a number of brand-name drugs moving to generic pricing, is over. Ongoing renewal increases will be the norm as expensive new drugs loom on the horizon. Oral cancer medications, for example, that are not covered by provincial plans will impact your benefit plan experience should they hit—while newly patented drugs are poised to be protected for another 22 years before generic substitutions become available. Don’t disregard the opportunities you have to change the trend on your drug spending. The proxy for disease and disability is in your drug spend. Current trends shed light on what your organization may expect in the future.

High-level organizational changes, such as company mergers, are an optimal time to review a benefits plan. If your organization is merging with another company and there are two employee benefit programs in place, it’s not a bad time to look at a whole new plan. Perhaps it’s a good time to try flex—or to introduce a consumer–driven program?

You may also wish to revisit the effectiveness of using benefit plans as a recruiting / retention tool. An employee benefit program can be a motivator for keeping people engaged and may help with retention—particularly if a high cost medication is involved, but be cognizant of the disparate goals of servicing generational needs as opposed to utilizing benefits as a recruiting tool. Be sure your plan is relevant to the target demographic you are looking to attract.

060807

without the data, you’re just an opinionOn the Extended Healthcare and Dental side, reviewing a minimum two years of data is recommended to help establish patterns and rule out anomalies. Examine both the total dollar and frequency of spend, dollar spend per age band and claimant type, and determine how many employees are eligible for COB coverage. As a general rule, 50% of spend is usually for the employee, while the remaining 50% accounts for the spouse and dependents combined. Ensure you make decisions based on the variables you can control or can reasonably foresee. To do this, it’s important to mine available data effectively.

potential roadblocksBefore you make any plan alterations, consider mitigating external factors—are there any ongoing organizational changes that may be coinciding with potential benefit plan modifications? If the redesign is negative, is it following / coincident with any other negative company events? Last but not least, make sure that any plan alterations are not jeopardizing employee unionization or constructive dismissal.

put yourself in their shoesTake a good look at the underlying message that any potential change might send to employees. Focus on what’s important to employees, not your bottom line. If you were to randomly pull an employee off the floor and ask them—What is your LTD benefit? What is your co-pay on drugs? Do you know you have a vision benefit?—would they be able to answer correctly? If not, then you need to work on how you communicate employee benefits. Do you have the resources available to properly educate employees and communicate any plan changes? Industry wide, one of the weakest points of the employee benefits experience is communication with the employees. It’s critical to put the right spin on your messages—to ensure clarity and effectiveness of your communication—in order to get you where you want it to be with your employees.

noel mackaysenior consultant, group benefitsthe williamson group

Noel MacKay lends his expertise to W by analyzing current and future drug trends—ensuring organizations are well-informed and prepared for all eventualities. Taking a thoughtful approach as a Senior Consultant at The Williamson Group, Noel is responsible for ensuring in-force client satisfaction by maintaining relationships, providing clarity, managing plan complexities, and creating sustainable solutions. nmackay@williamsongroup.com 1-800-265-9973 ext 234

there’s no time like the presentWhen is the right time to implement plan design change? The truth is, there is never a wrong time to be considering a plan design change and going through the process. Your employee benefit plan is never not under threat or without a need for review. There’s always work to be done. The time to take charge and make plan changes is definitely now.

there is no question

to change or not to change?

1009

providing certainty in uncertain times

Regardless of your current financial state, when it comes to financial planning, the same questions always seem to crop up. How much money will I need? How do I go about saving it? How soon will I be ready? How will I know? The answers to these questions depend on what choices you make—both now and in the future.

Whether it’s a retirement lifestyle analysis, or questions surrounding financial liquidity and succession planning, a sound financial plan and professional advice can help you put your retirement into perspective by removing misinformation and ensuring that you examine all variables when planning for your financial future.

retirement planning

your financial MDWe don’t think twice before seeking out professional advice when health or legal issues are involved. Taking care of your financial well-being is no different—think of your financial advisor as your financial doctor! Financial advisors are trained, dedicated professionals, with strong support networks. Formally educated professionals in the discipline, they have committed their lives to their career.

Of course you can always self-diagnose on the internet. Everyone does it. But let’s face it—any information (for or against an argument) can be found on the internet if you’re determined enough in your search. It’s what you don’t know—and how all the information plays together—that can ultimately cause the most harm to your retirement nest-egg. A professional financial advisor can help you sort through all the options available, diagnose your areas of risk, and prescribe a financial and retirement savings plan to help you meet your short and long-term financial goals.

the williamson group’s hollistic approachIt doesn’t matter how old you are, or how much money you have; the financial foundation you lay down now will ensure a financially secure future. At The Williamson Group (TWG) we work closely with you, and your accounting and legal advisory team, to work through our unique holistic approach to Retirement Planning. The process takes into account all of the variables that may potentially impact your financial health and prioritizes them into realistic action items including:

• establishing your goals and objectives, gathering facts• analyzing your current financial situation• reviewing your wealth accumulation plan• discussing risk management / estate planning goals and objectives• reviewing risk management and estate planning• creating an action plan and implementation• regular monitoring, reviewing and adjustment of your plan

A sound financial plan will help you realize your retirement goals—whatever they may be. Take action now and let a financial advisor at The Williamson Group prescribe your healthy financial future.

duff williamsonvice president, financial servicesthe williamson group

duff@williamsongroup.com 519-756-8830 x216

For more information about retirement planning, please contact:

personal checklist panic—the moment of truthOne of the fastest ways to start feeling more secure about your financial future is through the reduction of your current debt load. Taking a long, honest look at where your debt and liabilities currently lie is no small feat—you may be reluctant or even embarrassed, to divulge any financial blunders to your advisor. Relax! Everyone has made mistakes—your financial advisor will know how to get you back on track to reduce or eliminate the risk they pose to your financial future.

1211

protecting employees who are off on WSIB

closing the gap

Tongue in cheek, The Williamson Group’s Scott Stewart, Director of Disability Solutions likens it to measles—an ill that seemed to have been eradicated—until it began to creep back up again. Scott’s mission? To ensure that employers understand the importance of filing concurrent Short and Long Term Disability (STD/LTD) applications when one of their employees is receiving Workers Safety and Insurance Board (WSIB) benefits.

Sounds a bit—let’s face it—boring, doesn’t it? How important could something so innocuous-sounding be, right? But it is. Even more importantly, it is potentially as much of a financial liability to your organization as it is, quite frankly, illegal. We have your attention now? Then please, read on.

the disability process and occupational injuriesIn the case of an occupational injury, a claim is submitted to WSIB concurrently with the STD application. If the claim is accepted and paid by WSIB, the STD application is declined, and if the claim is denied by WSIB, the STD application is adjudicated, based on the plan design and benefit schedule.

If an employee remains on WSIB, the employer must complete and submit an application for LTD benefits, including the Life Insurance Waiver of Premium, once the LTD eligibility date (or end of the elimination period) has been reached—even if the claim appears to be remaining with WSIB indefinitely. The LTD carrier will review the claim and, if approved, WSIB remains the first payor of benefit, with LTD being offset by any amount the employee receives from WSIB. This results in an open LTD claim with a Life Insurance Waiver of Premium in place, which has been filed in a timely manner under the parameters of the law.

According to Scott, “some companies don’t seem to be aware that under legislation, benefits for an employee must be maintained while the employee is off on a workplace injury claim.” By law, an employer must keep all benefits (Health, Dental, STD, LTD, Pension—everything) in force for one year when an employee is off on a WSIB claim, and possibly longer in order to satisfy human rights legislation (WSIB Act, Section 25, 1 & 2). Employers must also keep injured employees informed of benefits available to them during the disability period. Not doing so breaches the law.

In order to ensure continuation of coverage, all disabilities, occupational or not, require concurrent application for Short and Long Term Disability, including the Life Insurance Waiver of Premium. It is the duty of the employer to provide the employee with LTD forms and to ensure that the employee is aware of the consequences of not filling them out.

wisdom consists of the anticipation of consequencesThere are several potential consequences of not applying for LTD and Life Waiver when employees are off on an occupational claim.

For example, in a situation where the WSIB claim closes but the employee is not able to return to work, the claim will move on to become a LTD claim. If LTD forms were not submitted by the time the claim’s qualifying period was reached however, the claim will be considered to be ‘late’ by the insurer and a late filing application will be issued. Insurance carriers are also not contractually obligated to review a late-filed application, which runs the risk of having the claim denied and leaving the employee in an ‘absent without leave’ status without benefits or ongoing disability management, and simultaneously put the employer at risk of litigation. The unfortunate instance of an employee passing away without a Life Premium Waiver in place leaves the door open for further financial risk to the employer, who could be legally held liable for full payment of the Life claim.

active…but not actively at workWorking hand in hand with this issue is another common oversight on the part of employers—the distinction between an active vs. terminated employee when filling out a Not Actively at Work form. When these forms are being filled out during a carrier change, it becomes clear that some employers are not aware that employees who are off on WSIB should be listed as active. These employees may not be at work, but they are still active and eligible for benefits. Not listing these employees during a carrier change makes them ineligible for benefits with a new carrier and reinstatement of Health and Dental benefits after-the-fact may prove difficult.

the bare minimumIn the last couple of months alone, TWG’s Return to Health™ department has identified several instances where companies have failed to apply for the LTD benefit when their employees were on WSIB. “We’ve had several clients in this situation, and when this comes to light, there is absolutely nothing we can do to help,” says Stewart. “It’s almost impossible to fix, and the risk potential has huge numbers attached to it.”

So if you remember nothing else, remember this when an employee is off on a WSIB claim:1. Make sure they are listed and treated as an active employee 2. Ensure that the employee applies for their LTD benefit—even if the employee is off indefinitely and WSIB is continuing to pay—

the LTD claim will be approved with ‘nil’ benefit and the Life benefit and waiver will be in place.

Related Resources: Workplace Safety and Insurance Act http://www.ontario.ca/laws/statute/97w16#BK26

“We’re trying to protect our clients by telling them that whenever you have these situations, be smart and have your employee fill out the LTD forms. We may not be able to fix it, but we can try to prevent it by getting the word out there and being proactive for the future.”

—Scott Stewart, Director of DisabilityThe Williamson Group

1413

a questionable future

the ontario registered pension plan

Viewed largely as a response to the failure of the Federal and Provincial governments to gain consensus on Canada Pension Plan (CPP) enhancements, the Ontario Retirement Pension Plan (ORPP) is an initiative of the Ontario government to create a supplemental pension solution to help Ontario workers retire with greater financial security.

Bill 56— the Ontario Retirement Pension Plan Act—received royal assent in the legislature earlier this year. Scheduled to launch January 1, 2017, the plan will supplement the CPP and is intended to assist those perceived as being most at risk of under-saving—primarily middle income earners without workplace pensions.1

What exactly does it encompass? Here is what we know so far:• The plan will be mandatory for Ontarians without a workplace Defined Benefit (DB) or Target Date Pension Plan• The benefit will be indexed to inflation and payable for life, aiming to replace 15% of pre-retirement income• Currently, only DB and Target Benefit Pension Plans qualify for exemption; Defined Contribution (DC) Pension Plans and Group

RRSPs will not be exempt• Contribution rates will be phased in over a 2 year period to a maximum of 1.9% employer / employee equal contribution (total

3.8%), on the first $90,000 of income• Employers will be enrolled in stages, with the province’s largest companies starting first

more questions than answersOne of the key arguments for expanding the existing Federal CPP plan was the sound administrative framework which is already in place. The ORPP however, is an actual pension plan when compared to the CPP, which functions more like a social program with a pre-existing set of rules for contributions, benefits, investments and taxation. In order to make the ORPP a success, the Ontario government will need to ensure that the program is actuarially sound and administered effectively.

Outstanding questions that still need to be answered: • What will be the impact of a fully-implemented ORPP? • How will the government treat businesses that cannot afford to match mandatory contributions under the ORPP? • What types of workplace pension plans will be considered comparable to the ORPP and are therefore exempt? • Will the government consider broadening the diversity of sources of retirement income to mitigate risk? • How will the government address worker mobility issues? • How will the ORPP impact the self-employed?• What are the minimum earnings and which participants will contribute?• How will—or will—the ORPP integrate with CPP in the future?

At this time, significant design details remain unknown and there is a general sense of cynicism about the plan’s viability. There are concerns that the plan may actually have an adverse impact on certain groups of employees such as those who work for small employers, employees over 40, or low wage earners. It appears that the plan may be a long-term solution to a current problem—skirting a solution to the original issue, while incurring excessive costs and running the risk of causing future economic harm.

proposed benefitsAs it stands to date, finding a positive spin to the proposed plan can prove to be slightly challenging. The ORPP will indeed provide a portion of the required retirement income for individuals with no current plan and who meet eligibility requirements—assuming they are young enough to spend adequate time in the plan. Overall retirement security may improve, but it will most likely not be by as much as the government anticipates.

much ado about nothing?What will be the ramifications of a Liberal Party victory in the fall 2015 Federal Election, or if the Federal and Provincial governments agree to the expansion of the CPP? The province has said it will shelve the ORPP if the Federal government decides to enhance the current CPP program. A significant amount of time, planning and cost is being invested in a program that may not end up going forward.

how can you prepareWith conclusions on key design elements expected to be forthcoming in the next few months, things are currently at a stand-still. There are, however, things that you can begin to take into consideration to help prepare your organization for the next steps, should the government proceed with implementation of the ORPP.

You will be required to participate in the plan unless you sponsor a Defined Benefit or Target Date Pension Plan. There is a rising voice for Defined Contribution plans to be exempt, but at the time of this publication, they are not.

Employers with collective bargaining agreements, or any type of contractual documentation with employees, should begin to be proactive. Build language that keeps the door open for the addition of ORPP calculations and definitions into any longer-term contracts currently in the works.

Now is also a good time to take stock of your employee base. What is your average employee age? Examine the demographics. How will potential changes with the ORPP affect your employees? Plan sponsors should avoid jumping to any immediate conclusions and take time to make a thoughtful total compensation-based decision.

From an employment law perspective, any plan changes that result from ORPP implementation that may be perceived as negative and should be communicated as soon as they are known. Plan to give employees as much notice as possible once you know with certainty that the ORPP will be implemented.

Finally, prepare your internal stakeholder teams. Ensure that they are aware of this issue and its importance in future planning. TWG Consultants will be reaching out to you in the fall to talk about the ORPP as soon as more details are available. Be proactive about setting up a meeting this fall with your Pension and Group Benefits Consultant—there will be high demand on their time once the details come out.

Related Resources: Government website link to basic information on the ORPP: http://www.ontario.ca/government/ontario-retirement-pension-plan1 Budget 2014 Strenthening Retirement Security in Ontario, Ontario Ministry of Finance, May 2014 http://www.fin.gov.on.ca/en/budget/ontariobudgets/2014/bk7.html

leslie singdirector, pension servicesthe williamson group

joe nunespresidentactuarial solutions

contributors:is there a problem?Driving this change in legislation is a general sense that there is a problem that needs remedying. While not yet clearly defined, the only agreed upon concern stems from observations that Canadians earning $50,000 - $100,000 annually are not saving enough for retirement income. A number of experts, however, agree that currently there is no retirement-savings crisis. And while no one has a way to predict what the future economy will look like, and people could always be saving more money, many say Ontarians just don’t feel that they are experiencing this crisis. Could better financial literacy help remedy poor financial habits and curb over-spending?

Find out more about our singular approach to the provision of health and wealth solutions:

225 King George RoadBrantford, ON N3R 7N7

Tel Local: 519-756-9560Toll Free: 1-800-265-9973

info@williamsongroup.com

williamsongroup.com

feedbackW was created to provide our clients with meaningful information and insights into industry trends and developments. To help us deliver the information you need, we’d appreciate your comments and suggestions. Please provide us with your feedback by completing a three minute survey you will find here: www.surveymonkey.com/s/W-TWG-NewsletterThank you!

legal informationW is provided for general information purposes only. The Williamson Group and its affiliates make no representations or warranties as to its accuracy or completeness. Readers should be aware that the content of this publication should not be regarded as legal, tax, accounting, investment, financial, or other professional advice nor is it intended for such use.

W