Proposed Pooled Registered Pension Plans (PRPP)

Finance Minister Jim Flaherty  has released (December 16, 2010)  a draft framework for the creation of Pooled Registered Pension Plans (PRPP’s) to Provincial Finance Ministers.  He proposes an all-new pension system in Canada aimed at helping small businesses and their employees who do not have corporate plans save for retirement.

The proposed PRPP is described in a nine-page draft report prepared by the federal Finance Department and released Thursday morning. It comes ahead of a Sunday and Monday gathering of federal, provincial and territorial finance ministers in Kananaskis, Alta.  The new option would pool contributions from workers across multiple companies, or self employed workers who would otherwise not have access to a private defined-contribution pension plan. While each individual company would track their own retirement funds, the money would be pooled with contributions from other companies. That would allow small- and medium-sized companies to take advantage of the “economies of scale” investment advantages of large pension funds.

Below please find the the complete 9 page draft. Penad Pension Services will continue to monitor this as well as other proposed reform measures. If you have any questions please do not hesitate to contact us.

Framework for Pooled Registered Pension Plans


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New Government limits for 2011

Canada Revenue Agency published the new YMPE & DB limits yesterday. The new YMPE for 2011 is $48,300 and the new maximum DB pension limit is $2,552.22 p.a.


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Summit bridges the Atlantic with double client win

London, 14 September 2010 – Summit Global Investor Services (Summit) announces its appointment by the Church in Wales and Anglican Church of Canada
The investment fund for the Cardiff-based Representative Body of the Church in Wales has over £300,000,000 in assets under management. This diversified fund, which employs multiple asset managers, will be using the online Zenith Reports system for accounting and reconciliation purposes, to provide independent third-party monitoring of their investment activity, for performance measurement and to aid in the production of committee and trustee reports.
David Holloman, Head of Finance at the Church in Wales comments, “With Summit and their online Zenith software, we realised that we could automate and improve certain internal processes, such as reconciliation and report generation. This will undoubtedly free up some of our time to allow us to pursue new initiatives and enhance our governance.”
The Pension Office Corporation of The Anglican Church of Canada is located in Toronto, Ontario and manages over 5000 members and assets of $500,000,000. This is a well-established DB scheme with a mix of pooled and segregated funds across its nine asset managers. The fund chose Zenith Reports for a combination of breadth and depth of analytical services – it augments the conventional services of performance, attribution and risk measurement with additional analysis such as buy-and-hold, transaction cost, FX rates and custodian monitoring.
Judy Robinson, Executive Director for the fund, remarks, “Our aim in working with Summit is to improve our traditional analytics with something that is more cost efficient and user-friendly. The online system will not only provide us with faster delivery of information but improve reporting to the point where our trustees and management team can access their own bespoke reports online and perform ad hoc analysis whenever needed.”
Andrew Caird, Managing Director of Summit Global Investor Services says, “Each of these clients is a significant win for our company. Both funds are early adopters in their respective markets and, due to the nature of their organisations and stakeholders, any appointment follows extensive due diligence. To have gone through this process with both organisations and achieved this outcome is a great milestone in Summit’s development.”

Summit Global Investor Services is a Penad Global Alliance Partner.


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New Website

Penad Pension Services Limited is pleased to announce the launch of our new website (  Make sure to sign up for our RSS, Twitter and blog so that you can stay up to date.


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Federal Bill C-9 Passed

This Bill introduced a number of Plan level technical changes that in most cases don’t interest the average person. However, there are two significant changes one already passed and the other to be effective from some date in the future, probably 2012.

  • Canada Revenue Agency has relaxed its limits on the surplus threshold. Starting in 2010, Plan Sponsors will be able to contribute with higher surplus thresholds than before. For example, a plan with a $2 Million pension liability will not have to take a contribution holiday until the contributions exceed the lesser of i) the surplus and ii) $500,000. Previously the allowable amount would have been $400,000. The threshold has increased from 20% of liabilities to 25%. This will help Plan Sponsors to better fund their Plans for the future.
  • At some date in the future, Federally Registered Pension Plans which include Crown Corporations, Banking & Broadcasting Industries, international or interprovincial transportation, will be bringing in 100% immediate vesting, similar to Manitoba & Quebec.


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HST Introduction

As of July 1, 2010 the provinces of Ontario and British Columbia began the new HST tax.  The new harmonized tax rate for Ontario is 13% and for British Columbia is 12%.

Penad has updated our accounting system and is using the new HST tax.


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Manitoba Pension Act Amended

Effective May 31, 2010 Manitoba became the first pension regulatory body to make major amendments to their Pension Act & Regulations in respect of members’ benefits in a decade. We will just highlight the major changes:

  • Benefits are now 100% vested to members immediately retroactive to the initial effective date of July 1, 1976. This will increase administration in plans where there is a lot of turnover in the first years of employment. Manitoba now joins Quebec with immediate vesting. Watch for other provinces to reduce their rules as well.
  • The minimum survivor benefit upon retirement has been changed from 66 2/3% spousal pension to a 60% spousal pension to harmonize Manitoba with all the other provincial jurisdictions.
  • A member’s spouse may now waive their right to a pre-retirement death benefit. This will assist families to better allocate their various assets & death benefits among family members. This was not permitted prior to May 31, 2010.
  • The minimum cost rule (often called the 50% rule  because it ensures the member and employer “share”  the value of a pension 50/50 upon termination, death or retirement) has been changed to be effective only for contributory service. Previously all service was permitted to be used in the calculation of the 50% rule which could have reduced excess employee contributions refundable if there were periods of time when a member earned non- contributory pension benefits.
  • The small pension cash out rule has been increased such that if a member’s pension is less than 4% of the Yearly CPP Earnings, or $157 p.m. of pension in 2010, or if the commuted (present) value of the pension is less than 20% of the Yearly CPP Earnings, or $9,440 lump sum in 2010, the benefit is not considered locked-in and is therefore payable in cash.
  • E-mail correspondence with Plan members is now formally accepted by Manitoba. There is also a new Document Retention Policy in place as well.
  • There are numerous other housekeeping changes, but these are the most important ones with respect to members’ benefits and pension plan administration.


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Ontario Pension Reform Bill 236 Royal Assent

This Bill sets the stage for many changes on the horizon coming out of the 2008 Report of  Ontario Expert Commission on Pensions Most changes are to be proclaimed at a date or dates to be named in the future, expected to be starting July 1, 2012. The major changes in this first step are as follows:

  • Partial Plan Wind-ups are to be eliminated from the proclamation date, however, in their place, immediate vesting will be required and the normal grow-in provisions that applied upon partial or full wind-up will now apply for every employee who is terminated involuntarily, other than for cause. What this will mean is any employees being terminated involuntarily whose age plus employment service totals 55 or more points at termination date will be eligible to grow into any early retiremnt provisions within the Pension Plan. This will greatly increase the payout on some plans for eligible employees.
  • Similar to Manitoba’s recent change, Ontario will increase the small pension cash out rule such that if a member’s pension is less than 4% of the Yearly CPP Earnings, or $157 p.m. of pension in 2010, or if the commuted (present) value of the pension is less than 20% of the Yearly CPP Earnings, or $9,440 lump sum in 2010, the benefit is not considered locked-in and is therefore payable in cash. Previously this rule was only in respect of pensions less than 2% of the Yearly CPP Earnings.
  • The Bill includes various measures designed to facilitate the establishment of Pension Advisory Committees (PACs). These PACs would allow active and retired members to monitor the plan on an advisory basis. If member groups notify the Plan Sponsor of their intention to establish a PAC, the Plan Sponsor must distribute notices to all active and retired members and provide other assistance as will be prescribed in the future. This could have far reaching effects on how plans are administered in the future.
  • There are numerous administrative changes proposed as well including the issue of information statements each year to former members with vested benefits and retired members and requiring notice of all plan amendments be given to all plan members, including vested deferred and retired members, before application for registration of the amendment.


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Vista: Administrator VS Administrator

So you’ve decided it is time to ditch Windows XP and introduce yourself to the world of Windows Vista and the new way of doing things.

Like many other users you are accustomed to logging into Windows XP and running in a profile with administrator privileges. Running with lesser rights makes it quite cumbersome to install applications, configure things, and in some cases move about your computing tasks in general.

Now that you are boldly venturing into the realm of Windows Vista, you probably have carefully unpacked your shinny new machine, hooked it all up, and booted it for the first time.  Greeted with a sparkling new interface you gladly meander through the initial configuration.  Now it comes time to customize your user login. Familiar with XP terminology, you give yourself administrative privileges and log in.

You begin by installing your applications, and on the first attempt you are greeted with an unexpected error. The installer won’t run because it has insufficient rights to your system and registry.  Being the smart user you are, you check to ensure that your profile has indeed been assigned to the Administrator’s group, and it has. So why then don’t you have the accesses you need to install your application?

Well, Microsoft has in Vista separated rights for Administrator into two levels: Administrator and you guessed it, Administrator. One might think that they would create a new term such as Super Administrator for the top level, but they stuck with Administrator and created much confusion amongst users everywhere.

The first “Administrator” is the level assigned to your profile. This allows you to do most things on your computer that lesser access groups cannot. Unknown to you until now is that there is another level of Administrator for such things as registry access and the ability to write to  certain protected folders on your hard drive. Access to this level of Administrator is given to you through the system’s User Account Control or UAC.

The purpose of UAC is to strengthen security in Vista and to minimize risks from malware. Should you be subjected to a virus, the virus would not be permitted to do any harm to critical protected parts of the system unless the UAC was invoked, and you, when prompted allowed the virus access to critical system areas. Of course this also does affect other applications from accessing needed parts of the system as well.

In the first example above, you were trying to install some software. In order to perform the install, you would need to opposite click the application and select “Run as Administrator“. This would call upon the UAC which will prompt you to allow the install access to the needed parts of your system.

UAC is not required for all software installations, and it can also be invoked during other operations. An example of this is flushing the local DNS cache of the computer. This is a function that you might perform at the Command Prompt. After launching the command prompt window you proceed to type the following:

ipconfig /flushdns

The system immediately returns: “The requested operation requires elevation” This is fancy IT talk for, “You don’t have access rights to do this”. In order to successfully perform this function, you have to run the Command Prompt window with elevated rights. For this, you would once again opposite click on the Icon, and select “Run as administrator“. Once prompted with the UAC window, you click the continue button. This time when you input the command “ipconfig/flushdns” you are greeted with: “Successfully flushed the DNS Resolver Cache“.

Although this may be confusing to users, the extra step does provide you with valuable protection for your computer. There is a way to turn off UAC, however given the rampant state of malware in the cyber-universe, I would not recommend it.

Edward Blokland, Systems Manager, Penad Pension Services Limited


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Microsoft Discontinues Office 2000 Support

Beginning July 14th, 2009, Microsoft will cease to support its aged Office 2000 suite of applications. Released in 1999, Office 2000 was the last version of Microsoft Office to support Windows 95 and the first to introduce adaptive menus; where lesser used features are hidden from the user.

By its own policy, Microsoft supports its products for ten years after its initial release and has a distinct formula for doing so. Mainstream support includes patches for various bug fixes during the first five years, and limited support; where vulnerabilities are fixed via critical updates for the last five years.

This means, of course, that users of Office 2000 will no longer receive patches or upgrades after mid July; since Microsoft expects office users to migrate to Office 2003 or 2007. They are currently working on Office 2010 but have yet to announce a release date. Beta testers should expect to get their hands on a copy as early as July, perfectly timed to coincide with support for Office 2000 ending.

Penad has just finishing wrapping up its own upgrade to Office 2007. Our users are in the process of familiarizing themselves to the new “ribbon” interface. The ribbon organizes the commands into a set of tabs that are relevant to each set of tasks in Office 2007. The goal is to make it easier for the user to find “powerful” features that allow the creation of better documents in shorter time. There is a learning curve however, where users familiar with Office 2000 are not finding features where they know them to be; this new logic takes a short time to get used to.

Overall it has been my experience that the Office upgrades and the learning curve have been a fairly painless process.


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