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How Will Monsanto Impact DB Plan Funding
and Investment Practices?
The asymmetry of risks and rewards in the private pension system has become increasingly apparent in the last decade or so. This asymmetry has already been a destabilizing force, threatening both the funded status of defined benefit (DB) plans and the rate at which pension coverage has been decreasing in the private sector. It is inevitable that the interpretation of the pension benefits legislation by the Supreme Court of Canada (SCC) in Monsanto has further jarred the pension funding system.
The Nature of DB Plan Funding
Pension plans are long-term financial commitments. The cost of these commitments (or liabilities) must be estimated based on actuarial assumptions about future events and conditions. Until the Monsanto decision, the liabilities have been viewed on an aggregate basis and the individual liability amounts were irrelevant when determining the funding needs of the plan. But now…?
Better Health Care Consumers: Lessons From Due South
Results of the 2004 Ninth Annual National Business Group on Health/Watson Wyatt Survey show that employers with consistently lower health care costs are more likely to have health care programs that encourage employees to become better health care consumers. While there are significant differences between Canada and the U.S. in both the magnitude of employer health care costs and culturally acceptable plan designs, making Canadian employees better health care consumers could also help their organizations more effectively manage the increasing cost of domestic benefit programs.
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