BPM October 2010.indd - Benefits and Pensions Monitor

Multi-nationals Should
Centralize Pension Expertise
Multi-national companies should centralize their
pension expertise to better manage their liabilities,
says PricewaterhouseCoopers (PwC). The recommendation
follows an analysis of pension liabilities
for the 25 companies in the Amsterdam Exchange
index (AEX). It also calls for improving effi ciency
through joint investment policies and risk management,
and using the benefi ts of scale through collective
international contracts to manage pension
arrangements. It found that company pension funds
had a combined shortfall of $18.1 billion at the
end of 2009 after their sponsors made worldwide
additional contributions of $7.1 billion the previous
year. Since 2004, companies spent less than
50 per cent of their contributions for new pension
accrual and a steadily increasing amount to account
for shortfalls.
Aon Hewitt Formed
Aon Hewitt is open for business. The merger between
Aon Corporation and Hewitt Associates, Inc. is now
completed. “Through Aon Hewitt, we will provide
our clients with a broader portfolio of innovative
products and services focused on what we believe
are two of the most important topics facing today’s
global economy – risk and people,” says Greg Case,
president CEO of Aon. The company predicts the
cost savings of the merger will be approximately
$355 across Aon Hewitt in 2013, primarily from
reductions in back offi ce areas, public company
costs, and management overlap, as well as leverage
of technology platforms.
Two Speed World
Emerging
Pension plan and institutional investors must
come to grips with the “two speed” world of the
developed and emerging markets economics,
says Yvan Breton, Canada and Latin America
leader at Mercer’s investment consulting business.
Over the past 25 years, the developed world
has driven growth and equity prices. Now, however,
growth is slowing and most global economic
Benefits and Pensions Monitor – October 2010
growth is coming from emerging markets, he told
a media session prior to its ‘Americas Investment
Forum.’ Investors need to take advantage of the
“two speed” world and reassess the weighting
of emerging markets in their portfolios. “Clients
should really consider rethinking their investment
strategies going forward, and pay more attention
to the potential from the east, or emerging economies,”
says Breton.
ESG Moving Into
Mainstream
Mainstream institutional investors are beginning to
incorporate environmental, social and governance
(ESG) factors into their decision-making, says a
publication from the Canadian Institute of Chartered
Accountants (CICA). “Institutional investors
tend to have a longer investment time horizon and
are increasingly showing signs of interest in ESG
factors,” says Lisa French, principal, guidance and
support, CICA. “These investors are expressing
their expectations for corporate disclosures beyond
what is currently provided in fi nancial reporting.”
The publication states that regulators have a
responsibility to ensure that material information
needed by capital markets is provided in regulatory
fi lings.
Employers Must Show
Undue Hardship
An employer must show that it cannot accommodate
an employee’s disability without facing
undue hardship or face undue hardship to provide
further accommodation if it wants to terminate
the employee, says Christian Paquette, of Heenan
Blaikie. Speaking at its ‘Managing Disability in
the Workplace’ seminar, he said this may involve
looking at the cost to accommodate, health and
safety issues, and even the impact on employee
morale. The threshold to accommodate will also
vary based on the resources of the employer. The
duty to accommodate only requires the employer
to provide a reasonable, not a perfect, accommodation.
As well, the employer is not required to create
a position to accommodate an employee. ■
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