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Protecting Pensioners of Traditional Defined Benefit Plans

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Serge Charbonneau and Joseph Nunes of the Canadian Institute of Actuaries put out an insight paper on reimagining pension solvency funding: In Canada, pension promises made to employees by employers are not guaranteed by insurance contracts. Rather, they are secured by requiring that the employer set aside assets in a pension fund independent of the employer, which delivers future pension promises should the employer lose the ability to support the pensions with enterprise assets. Where the current system falls short, however, is when an employer goes out of business and a pension plan becomes wound up. Scenarios like this often run the risk that the assets set aside to deliver the promised pensions may not be sufficient, resulting in negative consequences for plan members, especially retirees who are without the means to replace lost retirement income from other sources. The question begs: Is there is a better approach to addressing underfunded pension plans? We exp

Stocks Looking Right Past Any Potential Bad News?

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Tanaya Macheel and Yun Li of CNBC report the S&P 500 rises for a third straight day to end a wild week of trading: The S&P 500 and the Dow Jones Industrial Average eked out gains on Friday, wrapping up a volatile week on Wall Street. A move by China to ban cryptocurrencies weighed on the technology sector and Nike shares fell as supply chain issues stemming from the pandemic hit the sneaker giant. The Dow Jones Industrial Average gained 33.18 points, or 0.10%, to 34,798.00. The S&P 500 edged 0.15% higher to 4,455.48 and the Nasdaq Composite shed about 0.03% to 15,047.70. “As bad as things started off on Monday for stocks, a mid-week bounce and calm on Friday isn’t so bad,” said Ryan Detrick, chief market strategist for LPL Financial. “Still, many of the worries over Evergrande, a slowing economy, and continued supply chain issues are still out there.” The Nasdaq trailed the other major averages on a week-to-date basis but edged up into the green for the close. T

UPP's CEO Is Setting the Right Tone and Vision From the Get-Go

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Gideon Scanlon, editor of the Canadian Investment Review, reports on how UPP is building on jointly governed pension model with a pandemic launch: When the University Pension Plan officially launched in July 2021 , it did so with Barbara Zvan as its inaugural president and chief executive officer. Fresh from a 25-year career with the Ontario Teachers’ Pension Plan, she was appointed by the UPP’s board of trustees in July 2020. While most of the foundational work had been done by the time she joined, it would be up to Zvan and a team of full-time employees and contractors to carry the project over the finish line. “It’s been an interesting experience. Most of the people haven’t met one another in person. We don’t have an office yet. We needed to find people with expertise who knew what to get done, people who are flexible and excited about being part of a startup.” It’s not difficult to see why Zvan was seen as the ideal candidate. At the Ontario Teachers’, she rose from an a

OTPP Buys HomeEquity, Sets Ambitious Interim Net-Zero Targets

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Barbara Shecter of the National Post reports Ontario Teachers' to buy HomeEquity Bank, known for reverse mortgages:  The Ontario Teachers’ Pension Plan Board is acquiring the parent company of HomeEquity Bank, best known for its reverse-mortgage business, from Birch Hill Equity Partners Management Inc. and other minority shareholders. The purchase of the Schedule 1 bank is subject to regulatory approvals, expected in the first half of 2022. Financial terms were not disclosed. Teachers’ said the bank is “well positioned for sustained growth” as more Canadians near retirement age, a prime time for reverse mortgages that provide loans against a home while the borrower continues to live there. “HomeEquity Bank is an excellent fit for our growing portfolio of leading financial services firms,” said Karen Frank, senior managing director of equities at the pension fund. “We believe the company has a high-quality management team, a solid value proposition for consumers and ro