November 2009 Bulletin
|
 
Celebrating 10 Years of Business!
Thank you for all your support! |
Just a Reminder,
As independent brokers we have the ability to go to any insurance company to get insurance quotes. If you are looking at your group benefit plan (or know of another company who is) and are wondering if you are using your dollars in the most efficient way possible please contact us and we will be happy to discuss this with you.
|
Just a Reminder,
As independent brokers we have the ability to go to any insurance company to get insurance quotes. If you are looking at your group benefit plan (or know of another company who is) and are wondering if you are using your dollars in the most efficient way possible please contact us and we will be happy to discuss this with you.
|
|
|
|
What
is the Compassionate Care Benefit?
by Janet
Bullard RN, MN, CHPCA (c)
As an
employer, what resources do you have to assist employees dealing with the End-of-Life
issues in their Family? Caring for very ill loved ones will affect your
employee's productivity and presence at work with increasing impact over the
course of the illness. more...
Retirement - can you
afford it?
by Bill Keech, IPP Inc.
Anyone
who has been reading the newspapers and magazines lately will recognize a
recurring theme - retirement may not come easy or soon. Many economists are
predicting that for a significant segment of the population, their retirement
will not only be postponed but the amount of retirement income will be
significantly less than previously anticipated.
more...
|
Any Questions, Suggestions?
Please feel free to contact us with any questions or ideas you may have, we would love to here your feed back!
Just click the link below
www.beneco.ca
|
 What
is the Compassionate Care Benefit?
As an
employer, what resources do you have to assist employees dealing with the End-of-Life
issues in their Family? Caring for very ill loved ones will affect your
employee's productivity and presence at work with increasing impact over the
course of the illness. Advanced illness and the terminal stages of an illness
are very stressful and emotional times for families. Absence of guidance or knowledgeable resources
can have a significant financial impact on both your employee and your business
through lost work hours, distractibility and reduced work commitments. Providing
proactive and comprehensive support can make a huge difference in work presence
prior to, and after an employee's loss. The Compassionate Care Benefit is one
of the tools that can be used to assist employees and employers ease the
financial impact.
EAP programs
are a great place to encourage your employees to start as they usually have a
list of resources to address specific issues and also provide valuable counseling
support. Programs should provide financial, emotional and practical resources
that will comprehensively address the diverse needs of your employee. The
ability to positively support your employee during the illness and bereavement
periods will have tremendous impact on their ability to re-engage with work
following their loss.
Canada lags
behind the US in government funded programs or initiatives designed to assist
families with financial resources and support for caregiving needs. Canada currently
offers a Compassionate Care Benefit program that provides financial support for
an employee caring for a "gravely ill family member". There is a maximum of 6
weeks of paid benefits to a family member who is absent from work in order to
care for or support a dying family member.
Highlights
to this benefit include the following:
· The family
member is at risk of dying within 26 weeks
· Medical
certificate and a signed document from
the recipient of care are required
· Maximum
benefit paid is $447 per week
· Compassionate
Care benefits can be combined with other EI benefits
· The benefit
may be shared between family members
· The dying
family member may reside outside of Canada
· May be used
to augment or replace an Employer's sick Benefit
http://www.servicecanada.gc.ca/eng/ei/types/compassionate_care.shtml
There are 3
additional resources available that may
provide benefits to those who qualify:
1.
Canada
Pension Plan disability and survivor benefits
http://www.hrsdc.gc.ca/eng/isp/cpp/survivor.shtml
http://www.servicecanada.gc.ca/eng/isp/pub/cpp/disability/guide/sectiona.shtml
2.
EI sickness
benefits for the gravely ill person (can provide supplementary income to the
household and/or caregivers)
http://www.servicecanada.gc.ca/eng/ei/types/special.shtml#Sickness3
3.
Special
circumstances under the Canada Pension Plan
http://www.hrsdc.gc.ca/eng/isp/cpp/cpptoc.shtml
Employees
should be encouraged to explore all opportunities for financial support as well
as accessing services to provide emotional support and practical information to
assist them through the journey of terminal illness with a loved one. Palliative
Care resources are available in most urban and some rural areas providing a
variety of supports including hands-on care, support groups, education and
hospice care. It is critically important to have the right supports and
resources available during the time of advancing illness to optimize physical
and mental health of the caregiving employee. Employees that have been guided
and assisted in helpful ways will return to work sooner and cope better with
bereavement if they have had positive experiences as a caregiver.
In an aging
society the issues of caregiving and death of a loved one are going to become a
significant issue that can be anticipated and prepared for by forward thinking
employers. Understanding the issues that will impact your workforce provides
you with the opportunity to have financial, educational and emotional resources
in place to assist your employees. The cost of being prepared will be small in
comparison to the costs of reacting to a crisis.
Proactive
Health Care Advisors
www.proactivehealthadvisor.com
403-863-8916 |
Retirement - can you
afford it?
by Bill Keech, IPP Inc.
Anyone
who has been reading the newspapers and magazines lately will recognize a
recurring theme - retirement may not come easy or soon. Many economists are
predicting that for a significant segment of the population, their retirement
will not only be postponed but the amount of retirement income will be
significantly less than previously anticipated.
Investment
returns have been dismal. Future returns are projected to be not only minimal
but volatile. It may take many years to achieve the savings required to permit
a comfortable retirement. For many, retirement will include some form of
ongoing employment in order to make ends meet. In short, most of us will have
insufficient funds to achieve our lofty retirement goals ... and even those that
do face the fear of outliving their capital.
When
it comes to retirement savings opportunities, there is one employment group
that has a distinct advantage - the self-employed business owner. While all
employed individuals have access to RRSPs, Tax Free Savings Accounts and
various insurance related products, self-employed individuals have the
tremendous advantage of also being able to access the Individual Pension Plan
(IPP).
IPPs
are an excellent and proven vehicle for self employed individuals wanting to
accumulate significantly more retirement savings than is possible under an
RRSP. An IPP:
§ permits significant contributions to be
made on behalf of service prior to implementation,
§ provides the ability to contribute at
significantly higher annual rates than RRSPs,
§ allows the top-up of assets in the
event investment returns fall short of funding expectations,
§ provides the ability to fund early
retirement upgrades, and
§ permits the sponsoring corporation to
claim all plan set-up costs, ongoing administrative expenses and plan
contributions as tax-deductible business expenses.
In
order to demonstrate the significant contribution advantages, asset top-up
benefits and corporate tax deductions associated with the IPP, we are providing
a real-life example extracted from our files.
Bob
runs a small but profitable corporation - let's call it BobCo. Bob came to IPP inc. in early 2006 looking to maximize
his retirement savings. Key background information is as follows:
§ Bob's earnings have been in excess of
$150,000 per year for each year since 1991,
§ due to the receipt of dividends in lieu
of T4 income, five of Bob's employment years were not eligible for inclusion in
the IPP,
§ Mary, Bob's Spouse, was also employed
by BobCo since 1991 and received average annual earnings of $37,000 for pre-2006
years of service, and
§ Bob was age 60 and Mary age 61 at the
IPP effective date.
The
BobCo IPP was implemented effective January 1, 2006. Combined contributions for
Bob and Mary for the year 2006 totaled $113,800 ($40,500 for the year 2006 plus
the amortized past service payment of $73,300[1]).
Bob and Mary also transferred $220,700 from their RRSPs to the IPP as
Qualifying Transfers to offset the fact that they made maximum RRSP
contributions for each pre-2006 year of employment. IPP contributions for the
years 2007 and 2008 averaged just over $120,000 per year.
Had
Bob and Mary continued with their RRSP strategy, their combined RRSP
contribution for the years 2006 through 2008 would have averaged $27,000 per
year.
Looking
at the asset side of the equation, the IPP achieved investment returns of 10.0%
for 2006, 6.0% for 2007 and -20.0% for 2008. The market value of the IPP at
December 31, 2008 was just over $508,000. When the January 1, 2009 actuarial
valuation report was prepared it revealed a funding deficit of $152,700. The
deficit arose primarily due to the return on plan assets falling below the
expected 7.5% annualized return.
BobCo
was provided the option of funding the deficit by a single lump-sum payment or
amortizing it over future employment years. Bob elected to fund the deficit
over the subsequent three year period. As a result, BobCo contributed $106,000
for the year 2009. The calculated 2009 RRSP maximum, by comparison, totaled
$32,000.
It
is our estimate that the market value of assets for the BobCo IPP will exceed
$636,000 at the end of 2009[2].
In comparison, bringing forward the maximum RRSP contribution amounts,
including the Qualifying Transfer, at the BobCo IPP rates of return reveals an
estimated RRSP asset value less than half that of the IPP.
As
demonstrated in the BobCo example, the IPP permits significant contributions on
behalf of service prior to plan implementation and for each year of plan
membership thereafter. In addition, when the investment returns fail to achieve
the expected return, the asset top-up provisions provide additional
contribution room to compensate for the poor investment results. All in all,
the IPP outstrips the RRSP as a retirement savings vehicle.
Bob
has several distinct advantages over many of us - in short, he is the owner of
a profitable corporation that has employed both he and his spouse for a good
number of years.
As
a business owner, can you afford not to have an IPP?
Contact
IPP inc. for a personalized IPP
proposal to determine how the IPP can enhance to your retirement savings
opportunities.
Western Canada:
250, 720 - 11th Ave. S.W.
Calgary AB T2R 0E4
Telephone:
(403) 228-9024 Fax: (403) 245-4229
Eastern Canada:
36 Ridge Drive
Toronto, ON M4T 1B7
Telephone: (416) 487-9024 Fax:
(416) 480-9806
e-mail: info@ipp-inc.ca
web-site: www.ipp-inc.ca
__________________________________________
|
|
|
|
|
Tell your friends!
The Benefit Specialists Corp. is more than willing to answer any questions you or anyone you know may have. If you know someone who has questions regarding the insurance industry or anyone who wants to join our mailing list please contact me, or forward this email to them and get them to click the join our mailing list button below.
Thanks!
|
|
Sean Murray
The Benefit Specialists Corp.
sean.murray@beneco.ca
403-547-5236
|
The information contained in
this bulletin is for general information purposes only. The articles published
in this bulletin have been collected by The Benefit Specialists Corp. (TBSC) and
we make no representations or warranties of any kind, express or implied, about
the completeness, accuracy, reliability or availability with respect to the
information, products, services, or related graphics contained. Any reliance you place on such information is
therefore strictly at your own risk. In
no event will we be liable for any loss or damage including without limitation,
indirect or consequential loss or damage, or any loss or damage whatsoever
arising from loss of data or profits out of, or in connection with, the use of the
information contained in this bulletin. Through
this bulletin you are able to link to other websites which are not under the
control of TBSC. We have no control over
the nature, content and availability of those sites. The inclusion of any links
does not necessarily imply a recommendation or endorse the views expressed
within them.
|
|
|
|
|
|
