Briefly:

The MFDA has announced the appointment of Rod McLeod, Q.C. as chair of its board of directors. He recently retired from Miller Thomson LLP, where he had been a partner since 1987.

“I am honoured to take on this important role as chair of the board and to continue to assist the MFDA with the essential work it does on behalf of Member firms and the investing public,” McLeod said.

McLeod joined the MFDA’s board in March of this year. His career experience includes responsibility for regulators while in government for several years, and acting for private sector companies that were impacted by regulators while in private law practice.

He is currently a member of the Attorney General’s Major Case Review Team, board chair of Bellwood Health Services Inc. and board chair, The Ontario Lawyers’ Assistance Program (Law Society).

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Rough Q2 for Canadian pension plans

Jittery stock markets and drops in federal bond yields were a drag on the financial health of Canadian pension plans in the second quarter of 2010, according to Mercer.

The Mercer Pension Health Index—which shows the ratio of assets to liabilities for a model pension plan—stands at 67% as of on June 30, down 7% from the previous quarter.

“Long-term federal bond yields dropped 40 basis points, ending the quarter at their lowest level since the ‘flight to quality’ of December 2008,” says Scott Clausen, retirement, risk and finance professional leader for Canada. “This resulted in higher pension liabilities measured on a solvency basis, decreasing the index by about five percent.”

According to Yvan Breton, leader of Mercer’s investment consulting business in Canada, poor stock market performance is responsible for the remainder of the drop, with Canadian, U.S. and international equity indices losing between 5% and 10% over the quarter.

“Pension plans that do not hedge foreign currency exposure benefited from a weakening Canadian dollar, as U.S. and international equity returns were even worse in local currency,” he says.

A typical balanced portfolio would have returned -1.4% for the first half of 2010, and -2.7% for the second quarter. This return does not capture any impact from active management of any of the assets.

(07/07/10)

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.