Briefly:

(October 22, 2004) The Canadian Pension Plan Investment Board (CPPIB) today announced four new private equity investments, worth $740 million.

The board has committed $300 million US to the KKR Millennium Fund, 80 million euros to Partners Group Secondary, $90 million US to VSS Communications Partners and $100 million US to MidOcean Partners.

The CPPIB’s private equity commitments now total $7 billion through 50 limited partnerships managed by 41 firms.

“We continue to selectively add new partners to our private equity portfolio and to build our relationships with existing partners,” said John MacNaughton, CEO of the CPPIB. “Although it is still relatively early in the development of our private equity portfolio, we are pleased with its performance to date.”

The CPPIB invests funds not needed by the Canada Pension Plan to pay current pensions.

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Fixed income retirees worried about cash flow, poll suggests

(October 22, 2004) Nearly half of retired Canadians say they can no longer afford the same standard of living they had during their working years, according to a poll released today by RBC Financial. And two-thirds say that managing cash flow has become their top priority.

“After a decade of low interest rates, many investors continue to experience the challenge of generating sufficient income or attractive returns on fixed income investments,” says RBC national manager Nadine Girault.

Baby boomers are also worried about their retirement years, the survey indicates, with 56% concerned about how they will continue their current lifestyle on a fixed income.

Half of non-retirees agreed that due to the demands of taking care of their children, they have not put enough money away from retirement. And one-third said they were in a similar situation due to caring for their aging parents.

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Ottawa bumps up savings bond rates

(October 22, 2004) The federal government has modestly boosted rates for Canada Savings Bonds (CSB) and Canada Premium Bonds (CPB), on sale until the end of the month.

CSB Series 90, with an issue date of November 1, 2004 and a 10-year term to maturity, will carry an interest rate of 1.5% for the first year, up from 1.35%.

CPB Series 40, also with an issue date of November 1, 2004, will carry an interest rate of 1.85% for the first year, up from 1.7%, rising to 2.56% in the third year.

The future of savings bonds was questioned recently when a government-commissioned study suggested the program should be scrapped, noting that investors can get better rates in a high-interest savings account.

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Mackenzie proposes pair of fund mergers

(October 22, 2004) Mackenzie Financial and MRS will hold a special meeting on December 10 to allow unitholders to vote on two proposed fund mergers.

Mackenzie wants to merge the Keystone AGF American Fund with the Mackenzie Universal U.S. Growth Leaders Capital Class and the Keystone AGF Bond Fund with the Keystone Beutel Goodman Bond Fund.

Mackenzie and MRS say they have completed a “thorough and strategic” review of the Keystone fund family and say the merged funds will better complement existing investment styles within the portfolio.

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CPP ceiling rises

(October 20, 2004) The federal government has raised the pensionable earnings ceiling for 2005 up to $41,100, from $40,500. Contributors who earn more than $41,100 in 2005 are not required or permitted to make additional contributions to the CPP. The basic exemption amount for 2005 remains $3,500.

Contribution rates for 2005 will remain unchanged at 4.95% for both employees and employers, and the self-employed contribution rate will remain unchanged at 9.9%.

Maximum contribution to the plan for 2005 will be $1,861.20 for employer and employee, up from $1,831.50, with self-employed contributions topping out at $3,722.40, up from $3,663.00 in 2004.

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Bank of Canada raises rates

(October 19, 2004) The cost of borrowing has gone up this morning, as the Bank of Canada has raised its key bank rate by 25 basis points to 2.5%.

The added cost of borrowing for commercial banks should soon filter through to the consumer through higher interest on floating mortgages and credit cards. Shortly after the announcement, the major banks began raising their prime lending rate.

Economists are expecting rates to continue rising when the Bank holds its next rate-setting meeting on December 7.

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Manulife tops for UL statements: DALBAR

(October 19, 2004) Manulife Financial has been ranked first in Canada by DALBAR for client statements provided to universal life insurance policies owners.

“We’re very pleased that our universal life statements have topped the industry in DALBAR’s rankings,” says Paul Lorentz, vice president of product and marketing for individual insurance at Manulife. “Our statement and our website are part of a total package for universal life clients that focuses on giving them and their advisors clear and timely information to help them manage their policies effectively.”

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Ontario credit union merger proposed

(October 19, 2004) HEPCOE Credit Union and Niagara Credit Union have inked a merger deal that will create the largest credit union in Ontario, if approved by regulators and credit union members.

“This merger will ensure that our members and future generations have a trusted financial partner to fulfill their life goals,” said Sean Jackson, CEO of Niagara Credit Union. “Our goal is to maintain all of the benefits our members enjoy from a local financial institution as we grow larger. Our vision is to create the number one financial institution in Ontario for outstanding member relationship service.”

The new credit union will have over 180,000 members and over $3.5 billion in assets under administration after the merger is completed. There will be no branch closures as a result of this merger.

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CPPIB faces PEI audience

(October 18, 2004) The CPP Investment Board continues its cross-Canada series of public meetings with a stop in Charlottetown Wednesday, Oct. 20, at Rodd Charlottetown, 75 Kent Street.

Gail Cook-Bennett, Chairperson, CPPIB, and John MacNaughton, outgoing president and CEO, will deliver the Board’s presentation on the health of the CPP.

At their recent stop in Toronto, the speakers were peppered with questions on the suitability of investments in tobacco and in companies operating in countries accused of human rights abuses.

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Fidelity lowers NorthStar fees

(October 18, 2004) Fidelity Investments has announced it is reducing the management fee on Fidelity NorthStar Fund and Fidelity RSP NorthStar Fund effective immediately. The move brings the funds’ fees in line with rest of its equity fund lineup.

The Series A and Series F units will have fees cut by 20 basis points. The reduction also applies to Series A and Series F shares of Fidelity NorthStar Class.

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CRA warns time is running out for older requests

(October 18, 2004) The federal government is reminding taxpayers that they have until December 31 to review records and send in adjustment requests under the fairness provisions for the 1985 to 1994 taxation years.

Under a proposed amendment to the Income Tax Act, the Minister of Finance’s discretion over such requests will only apply to requests that are for a taxation year ending in the ten previous calendar years.

Clients can make a fairness request by contacting their local CRA office and by providing specific information explaining why they were not able to meet their tax or duty obligations.

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