Proposed changes to pension plan rules and price reductions for generic prescription drugs
An in-depth look at these and other subjects are covered in the current issue of the Morneau Shepell News & Views
TORONTO, Feb. 13, 2018 /CNW/ - Morneau Shepell released the February 2018 issue of its monthly newsletter, News & Views, in which the Company looked at a number of topics including: proposed changes to Pension Benefits Guarantee Fund assessments in Ontario, proposed changes to the Manitoba Pension Benefits Act, the Public Sector Accounting Board's review of retirement benefits and price reductions for prescription drugs.
- Proposal for changes to Pension Benefits Guarantee Fund assessments in Ontario – The Ontario Ministry of Finance has proposed changes to the assessment formula for the Pension Benefits Guarantee Fund, which would take effect on January 1, 2019 if approved. Some of the changes would include eliminating the basic assessment of $5 per pension plan member and adding an assessment based on plan liabilities – among other changes.
- Manitoba's finance minister proposes changes to Pension Benefits Act – The minister of finance for Manitoba initiated a public consultation on recommendations to revise the Pension Benefits Act. The proposal focuses on new plan designs, funding rules, locking-in provisions, compulsory pension plan membership and more.
- Review of public sector accounting of retirement benefits – The Public Sector Accounting Board's deadline for its invitation to comment on section 3250 (retirement benefits) is March 9, 2018. This review considers six alternative bases to determine the discount rate assumption.
- Price reduction for prescription drugs – The pan-Canadian Pharmaceutical Alliance and the Canadian Generic Pharmaceutical Association announced a five-year agreement that will save $3 billion. Effective April 1, 2018, the prices of nearly 70 of the top prescribed generic drugs in Canada will be reduced by 15 to 40 per cent.
- Tracking the funded status of pension plans as at January 31, 2018 – Morneau Shepell shared the changes in the financial position of a typical defined benefit pension plan since December 31, 2017. The graph in the newsletter shows the impact of three typical portfolios on plan assets and the effect of interest rate changes on solvency liabilities of medium duration.
- Impact on pension expense under international accounting as at January 31, 2018 – Morneau Shepell showed the expense impact for a typical pension plan that starts the year at an arbitrary value of 100 (expense index). Since the beginning of the year, the pension expense has decreased by two per cent (for a contributory plan) due to the increase in the discount rates.
About Morneau Shepell
Morneau Shepell is the only human resources consulting and technology company that takes an integrated approach to employee assistance, health, benefits and retirement needs. The Company is the leading provider of employee and family assistance programs, the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. As a leader in strategic HR consulting and innovative pension design, the Company helps clients solve complex workforce problems and provides integrated productivity, health and retirement solutions. Established in 1966, Morneau Shepell serves approximately 20,000 clients, ranging from small businesses to some of the largest corporations and associations. With more than 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.