PEO CANADA

A friend of mine confessed that she once warned her husband not to swallow his gum because it would stay in his stomach for seven years. She has since learned that her mom was only telling her this because she didn’t want her to eat it. After I closed my gaping jaw, and stopped giggling, I realized that many of us may live parts of our lives according to myths told to us in our past. The truth is that, while gum doesn’t fully digest in you, it will pass through in the same lump it was swallowed with. 

Below is a list of some common myths you may have heard and even lived by for a short period of your lives, along with some extra information explaining the truth or myth behind it.

You can tell what the sex of a baby will be based on how the mother is carrying – This is completely false and comes from Old English Folklore. It was once believed that a woman was carrying a girl if she was carrying the baby up high and a boy if she was carrying the baby down low. It was believed that girls needed more protection so they carried higher than the boys. There is no scientific basis to back this up. It is, simply put, an old wives tale. http://kidshealth.org/parent/pregnancy_newborn/pregnancy/myths_tales.html

If you don’t eat your carrots when you are a child you will go blind as an adult – Yup, we all heard this one when mom wanted us to finish those carrots! While there is some basis in truth for this, it is very little. Those who have a healthy diet in both childhood and adulthood are not going to have their vision affected simply because they failed to eat carrots. Those who live in countries where they might not get enough Vitamin A are in danger of going night blind. However, if their diet is supplemented with foods rich in Vitamin A, such as carrots, their vision can be improved.

http://blogs.nlb.gov.sg/ask/health-fitness/792

Feed a cold but starve a fever – This is another old wives tale that has no basis in reality. Anyone who has a cold and or fever needs a certain amount of nutrients and fluids to get better. Without them, the body has a more difficult time fighting off the cold and or fever.

http://www.cnn.com/2006/HEALTH/parenting/12/07/par.sick.myths/index.html

When you shave, the hair grows back thicker and faster – A study that was done 80 years ago actually proved that this was not true, but many people still believe it today. Hair is dead. So shaving it is not going to make it grow faster. What make hair grow are the follicles beneath the surface of the skin, and what comes out is dead by the time it reaches the skin’s surface. It appears to be darker and thicker because it hasn’t been exposed to the sun or any chemicals for very long.

If you eat turkey, it’s going to make you sleepy – Well, we’ve all thought this around the holidays. But, in reality, the sleepiness we feel is from eating a large meal, not from eating the turkey itself. It used to be thought that the tryptophan in turkey is what made us sleepy, but it has recently been discovered that ground beef and even pork have more tryptophan than turkey.

Colds and flu are at their most contagious before any symptoms appear – This is untrue. Colds are at their most contagious when the symptoms are at their worst. This is the timeframe when you are most contagious. While you should wash your hands often and take other preventative measures throughout the life of a cold, you should be especially diligent when the symptoms are at their worst.

http://www.cnn.com/2006/HEALTH/parenting/12/07/par.sick.myths/index.html

For more health and wellness myths, visit our resource at:

http://health.thefuntimesguide.com/2008/12/health_myths.php

Did you know…

·         1 in 9 women will develop breast cancer

·         1 in 21 women & 1 in 11 men will develop lung cancer

·         1 in 8 men will develop prostate cancer

·         1 in 3 will develop a form of life threatening cancer

·         3 of 4 families will be affected by cancer

·         30% of those with cancer are completely cured

·         1 in 2 will contract some form of heart disease

·         95% of heart attack victims survive the first attack

·         1 in 20 run the risk of having a stroke before 70

·         75% of stroke victims survive the first stroke

Thanks to medical advances and greater self-awareness, many people are now surviving these serious illnesses, but few are recovering from the financial burden. That is where critical illness coverage can help.

No one plans to get sick, but when something unexpected happens, you can help your employees and their families as well as your business by being financially prepared. Critical illness insurance is designed to financially help support patients before, during and after treatment by providing a lump-sum benefit when a critical illness is diagnosed.

By including Critical Illness coverage in your benefits package, you are providing your employees with a way to collect a tax-free lump sum benefit. They are then free to use this money anyway they wish.

Employees can use the benefit for anything they wish, such as:

·         Financial needs – income replacement, paying down debts or to help preserve personal savings, retirement funds or other investments

·         Health care costs – alternative treatment options, medical equipment or expenses not covered under provincial or group benefits plans

·         Lifestyle choices – home repairs or renovations, vehicle upgrades, personal or family pursuits, vacation

Employers can see positive aspects too, including:

·         An excellent addition to employee benefits packages, helping in recruiting and retaining the best staff

·         Support employee health and inspire loyalty in the workplace

·         Help lessen the pressure on the employer regarding financial support for those employees absent from work after suffering a critical illness.

This can be one of the best strategies to help lower stress, provide extra financial support, and in turn, help your employee have the chance for a quick and complete recovery.

It’s almost summer, the most frequent time for traveling and vacations. Many Canadians are considering sunny places or exotic countries as the best place for their destination. But as you’re deciding on the perfect destination you should also be checking if you are covered for any unforeseen incidents while traveling.

Do you have basic insurance to cover a medical emergency or even the loss of baggage?

Basic travel insurance can be purchased almost anywhere.  Most financial institutions and travel agencies offer this coverage. It is designed to protect you for trip cancellation and/or the loss of your luggage.

With the rewards of travel come possible unexpected medical challenges. The good news is that most group benefit plans offered through employment cover you for out of country medical emergencies. In conjunction with your provincial healthcare plan these Out of Country and Travel Assistance plans offer the protection you need by providing you with:

·         worldwide assistance

·         assistance communications network

·         medical advisors

·         assistance for unattended children  

·         transportation reimbursement

·         medical evacuation

·         dependant medical assistance and much more

This offers peace of mind so you may enjoy your travels.

Have you already booked your next destination? Check your wallet for your Travel Assistance card; if you don’t have one or have misplaced it hurry up and contact your benefits administrator for a new one.

Have a nice trip!

There was an interesting article on the Benefits Canada website about the saving habits of Canadian versus American retirees. The article is based on the TD Bank Financial Group’s North American Report on Retirement survey. To read more on how Canadian and American retirees felt with their RRSP and 401K savings click on the following link:

Canadian retirees breathe easier - written by Jody White

http://www.benefitscanada.com/news/top_stories/article.jsp?content=20100210_153628_11228

Still confused about the TFSA? Wonder if you should encourage your employees to contribute to one as well as an RRSP? You are not alone. Perhaps a look at some pros and cons can help give some clarity.

A TFSA is a Tax Free Savings Account to which any Canadian 18 years or older can contribute a maximum of $5,000 per year. 

·          There is no requirement to have earned income to contribute to a Tax-Free Savings Account. This is perfect for spousal plans or for students.

·          There is no tax deduction for contributing to a TFSA; however, the returns generated on investments (interest, dividends or capital gains) are not taxable. 

·          Withdrawals are tax-free. Money can be withdrawn at any time, depending on the investment. In addition, contribution room accumulates each year and any amounts withdrawn can be re-contributed anytime after the year of withdrawal.

The choice of contributing to a RRSP over a TFSA can depend on the tax level at the time of contribution versus the tax level at the time of withdrawal. 

With an RRSP, higher income earners can take advantage of immediate tax deferrals to a future date when their income is expected to be lower and therefore be in a lower tax bracket when making the withdrawals. However, for the reverse, where income is currently low but a much higher income is anticipated at retirement, the TFSA makes more sense as the ability will be there to withdraw tax free at that later date when tax levels will be much higher. 

High income earners who have already maxed out their RRSP contribution room may wish to consider a TFSA as an additional savings option.

It can be available to provide a nice shelter for bonuses, income tax refunds or any other type of one-time windfall such as the lottery winnings we all wish for.

It is a flexible way to save for special short term objectives such as a new car, a well deserved vacation, household needs or even an emergency fund. If any amount is withdrawn, that amount is still available as contribution room that can be put back into the plan in the future.

Now that we have TFSA available, depending on your situation, a common strategy is to build up a good nest egg in both a TFSA and an RRSP. This will provide all kinds of planning opportunities to minimize tax after retirement. The TFSA allows more flexibility and fewer restrictions as withdrawals from a TFSA do not trigger the claw-back of government benefits such as Old Age Security or the Guaranteed Income Supplement.

So join the TFSA birthday celebration and encourage your employees to review the possibilities of adding a TFSA to their retirement plan. Effective communication and decision support tools will allow your employees to understand and use the TFSA effectively to meet their specific needs.  Although the benefits may seem small in the short term, the long term benefits can be significant.

We all need to reward ourselves!

For further insight into TFSA’s we recommend the following:

http://www.cga-canada.org/en-ca/ResearchReports/ca_rep_2009-01_tfsa.pdf

What should you be thinking about if your employee has a Long Term Disability (LTD)? And, more importantly, what should you be thinking about before they reach the transition from a short term to a long term disability?

Most insured plans today tailor their LTD programs to coincide with the federal programs for EI and CPP sickness/disability benefits. Once an employee has been unable to work for 17 weeks they would transition from a short term to a long term disability.

As soon as you are aware of a possible long term disability case then you need to do some planning in advance. Here are some points to consider:

·         Is the employee able to assist in the application process or is another family member or other representative designated as your primary contact. Who do you have permission to talk to? Never assume, get an authorization in writing if you are not dealing directly with the employee.

·         Before the 17 week point, ensure that the employee or representative has all the applicable claim forms and that they understand the process and procedures that will be occurring.

·         As part of an insured LTD plan, an insurer will assign a disability case worker/adjudicator and/or rehabilitation specialist or combination of all 3. Ensure that as an employer you coordinate fully with these individuals to assist the employee. Liaison is critical between the employer, employee and insurer. If you are managing multiple LTD claims you may want to write formal processes.

·         Will health and dental benefits continue? If so, who will be responsible for payment of the premiums? Will the coverage be the same? Will there be any adjustments for cost of living? If the employee will be contributing how will payments be collected? Ensure that the employee is 100% clear – putting this information in writing is very important.

·         If health and dental benefits are continuing at what point will this cease? Most plans allow for a review of an LTD case at the 2 year mark often coinciding with their own occupation definition. At this point there will often be a determination if the disability is permanent and whether the employee is likely to return to work. If the employee is unlikely to return to work you will need to determine if the employee still qualifies for coverage under the contract. There maybe written requirements in contracts/policies or in union agreements as to how benefits are handled in LTD situations – ensure that you check. If nothing has been written and you are in new territory then remember any decisions you make about benefits continuation due to permanent disability will set a precedent.

·         Once an employee moves into a long term disability scenario it is important to maintain contact. It is a good idea to assign a supervisor or manager with the task of maintaining contact - be specific and set up some time line expectations. From a planning point of view an employer will need to know if and when the employee is likely to return. Beware of hiring a permanent replacement as those employees that seem unlikely to return often do!

Disability management is a very complex subject and each scenario may need to be handled slightly differently due to the nature of each illness. The above list is just a few ideas to get you thinking! Ensure that you utilize all resources for support and information, especially your insurer. Remember, careful consideration of all possible outcomes is crucial for effective management of disability situations.

A clearance letter/certificate is possibly one of the most important documents regarding workers’ compensation coverage. The perceived time and effort required to obtain this document often makes this an overlooked process.

Many subcontractors can have workers’ compensation coverage and accounts. This does not mean that their account is in “good standing” and all premiums have been paid. Once a subcontractor or any employees of the subcontractor have been injured, you will be held liable for the injury/illness that has occurred if you did not obtain a clearance prior to work commencement. This document is too important to be considered a hindrance when an employer can be left exposed.

I am seeing that employers realize the importance of this document more and more as this becomes a requirement for bidding on projects or even admission on certain worksites. This is a promising outlook as this indicates that more employers are trying to do the right thing, not just to avoid liability issues.

In these challenging times we are often asked how it’s possible to cut benefits costs. Most employers use cutting salaries as a last resort, preferring not to affect regular net pays and turn to benefits to help reduce expenses.

If you have to cut, what exactly should you cut?

Here’s a quick reference chart which addresses a few main areas that you could consider and some of the pros and cons in each case:

When undertaking any type of cost containment measure it is important to verify what is specifically stated in employment agreements/offer letters/policy manuals. If the area of cost cutting is addressed in a document then you will need to give sufficient notice to make the change. If you don’t provide sufficient notice then you could have a potential liability situation. So, thorough research into polices and signed documents is a must before making any changes.

While reviewing cost cutting measures, I would also recommend reviewing short and long term incentives. By ensuring that incentives align to corporate strategy and goals you can focus on growth and not just cost cutting. But that’s another blog…

There’s a lot of discussion in the news about a Supplemental Pension Plan. Late last year the provinces of Alberta and British Columbia announced a pension plan initiative which would allow employees not currently part of a pension plan access to an alternative.

“Alberta/British Columbia Pension Plan (ABC Plan)

The ABC Plan will be a simple defined contribution design with matching employee and employer contribution rates, immediate vesting of contributions, and flexibility to accommodate unmatched employer or employee contributions. All employers and workers would be automatically enrolled in the plan, but would be able to opt out of participation. It is recommended that governance and administration of the ABC Plan be kept at arm’s length from government, with an independent board of governors overseeing the plan. Rather than permitting members and employers to direct investment of assets, the Report recommends that investment of assets be subject to policy direction from the board of governors.”(1)

Currently the Canada Pension Plan (CPP) aims to replace only 25% of earnings at retirement. CPP is funded by both the employee and employer based on a contribution of 4.95% of earnings up to the maximum pensionable earnings (there is an exemption on the first $3,500 of earnings per year). Each year CPP revises the maximum pensionable earnings; for 2009 the maximum is $46,300 – which means that for more than half the population the CPP payment at retirement is actually a lot less than 25%. The current maximum monthly benefit for 2009 payable at age 65 is only $908.75. Most employees do not know this. They may realize that the CPP only pays a small portion of their retirement income needs but ask someone exactly how much they will receive and the majority won’t have a clue.

Other programs such as the Guaranteed Income Supplement (GIS) and the Old Age Security (OAS) are even more confusing and complicated in their calculations and most individuals that have any other types of retirement savings probably won’t qualify for any monies at all.

Iris Evans, Alberta’s finance minister, says a national supplemental pension plan could be a reality in the next two to three years (2).  Union leaders believe that the supplemental pension plan is flawed and should be abandoned in favor of comprehensive reform of the Canada Pension Plan (CPP) and Old Age Security (OAS) (3)

What we haven’t heard in the news is exactly what employees and individual employers think. One would hope that any vehicle that gave employees the chance to save additional funds for retirement would be beneficial to all. Waiting for CPP and OAS reform? Most of us will probably retire before that happens to any significant degree. If a national supplemental plan was developed at least we would spread the risk – putting all our eggs in the CPP basket would definitely make me uncomfortable.

What do you think?

(1)       Mercer December 18, 2008 http://www.mercer.ca/referencecontent.htm?idContent=1331120

(2)       Pensions and Benefits Monitor, Daily Benefits and Pensions News Alerts, Monday, June 22, 2009 http://www.bpmmagazine.com/benefits_news.html#national_plan_could_seen_be_reality

(3)       Benefits Canada, Friday, June 19, 2009 http://www.benefitscanada.com/pension/governance/article.jsp?content=20090619_153335_6468