Evolution of pension funding; increasing the retirement age; and taxation on health and dental plans
An in-depth look at these and other subjects are covered in the current issue of the Morneau Shepell News & Views
TORONTO, Feb. 16, 2017 /CNW/ - Morneau Shepell released the February 2017 issue of its monthly newsletter, News & Views, in which the company looked at a number of topics, including pension funding in Canada and how solvency and going-concern funding have diverged over the last decade.
- Long-term evolution of pension funding in Canada – Morneau Shepell assesses the funded status of pension plans on a monthly basis and in this month's newsletter it reviewed the longer-term evolution of pension funding in Canada, so illustrating why solvency rules pushed many employers in the private sector to close their defined benefit (DB) pension plans.
- Recommendation on increasing the retirement age – The Advisory Council on Economic Growth recommended that the age of eligibility for Old Age Security (OAS), Canada Pension Plan (CPP) and Guaranteed Income Supplement (GIS) should increase from age 65 to 67. The government rejected the recommendation on February 7, 2017, but the idea of encouraging older workers to work a bit longer may yet be pursued.
- Taxation on employer health and dental plans – There was speculation around the potential for the federal government to implement new tax rules that would make employer contributions to extended health and dental plans taxable to employees. On February 1, 2017, Prime Minister Justin Trudeau announced the government would not change these tax rules in this year's federal budget.
- Accounting rules for retirement and post-employment benefits – The Public Sector Accounting Board's Employee Benefits Task Force is considering revisions to the accounting rules regarding retirement and post-employment benefits for public sector employers. The task force opened its first invitation for stakeholders to send in their comments by March 3, 2017.
- Governance Guideline revised – The Canadian Association of Pension Supervisory Authorities (CAPSA) updated its Governance Guideline to emphasize that governance and administrative practices need to be documented and to make it easier for plan administrators to review their compliance with the Governance Principles included in the guideline.
- Tracking the funded status of pension plans as at January 31, 2017 – Morneau Shepell shared the changes in the financial position of a typical DB pension plan with an average duration since December 31, 2016.
- Impact on pension expense under international accounting as at January 31, 2017 – Morneau Shepell shows the expense impact for a typical pension plan that starts the year at an arbitrary value of 100 (expense index).
About Morneau Shepell Inc.
Morneau Shepell is the only human resources consulting and technology company that takes an integrative approach to employee assistance, health, benefits and retirement needs. The Company is the leading provider of employee and family assistance programs, as well as the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. Through health and productivity, administrative, and retirement solutions, Morneau Shepell helps clients reduce costs, increase employee productivity and improve their competitive position. Established in 1966, Morneau Shepell serves approximately 20,000 clients, ranging from small businesses to some of the largest corporations and associations in North America. With almost 4,000 employees in offices across North America, Morneau Shepell provides services to organizations across Canada, in the United States, and around the globe. Morneau Shepell is a publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.
SOURCE Morneau Shepell Inc.