Why are employees leaving free pension money on the table? – The Globe and Mail.

Fred Vettese is the chief actuary at Morneau Shepell, a human resources and actuarial consulting services firm.

Canadians are forgoing as much as $3-billion annually by not taking full advantage of employer matching contributions within their company defined contribution (DC) pension plans, according to a recent Sun Life Financial report. One has to wonder why employees would pass up free money when there are no strings attached.

Employees in most DC plans have the option of contributing extra, and if they do, the employer makes a matching contribution on their behalf. Sometimes it is a partial match, such as 50 cents for every dollar contributed by the employee, and sometimes it is a full match. Employers offer contribution matching to encourage employees to save more for retirement.

To gain some insight into why a significant percentage of DC participants balk at contributing more, I analyzed data from a number of DC pension plans for which Morneau Shepell does record-keeping. My investigation, which encompassed tens of thousands of employee records, turned up the following:

  • About one third of participants in a given plan do not make an optional contribution, even if it is 100 per cent matched by the employer.
  • Up to two thirds will not make an optional contribution if the basic required contribution they are already making is high, such as 4 per cent of pay or more.
  • One would expect older employees to contribute more since they will get their hands on the employer’s money sooner. But it turns out the impact of age is quite minimal, especially if we correct for salary differences. In some groups, a fifth of the employees in their 50s do not make optional contributions.
  • Salary level has a big impact on optional contribution rates but only up to the average national wage level – the low $50,000s. In one case, nearly half of employees in their mid-40s who were earning under $50,000 opted not to contribute versus only 18 per cent of employees in the same age group who were earning over $50,000.
  • In plans where the range of optional contribution rates is limited, the employee’s decision is practically binary. The vast majority either contribute enough to earn the maximum employer matching or they contribute nothing. This suggests that deciding how much to contribute is not based on ability to pay or on perceived retirement income needs, but rather on whether or not one understands the idea behind the optional matching.

What is noteworthy is that many of the employees who elect not to make optional contributions to their DC plans still contribute to their own Registered Retirement Savings Plans (RRSPs). According to Statistics Canada data, over half of the participants in pension plans, including DC plans, also contribute to RRSPs. A rough estimate is that several hundred thousand DC plan participants are forgoing employer matching contributions in their DC plans and instead make personal RRSP contributions that are not matched.

Read the rest of the article here…

Why are employees leaving free pension money on the table? – The Globe and Mail.

Originally posted on Allen LaRose, FMA, CIM, FCSI:

If there is one thing that I have a real “bee in my bonnet” about, it’s this!

Canadian banks (and other mortgage lenders) tacking on the sale of Mortgage insurance when you get a mortgage from them.  Of course this isnt just for mortgages, they do this will all types of loans.  They will sell you insurance on any and all loans.

They make it so simple, and they are great at selling you on the reasons why you need the insurance.  One little check box and a signature on the credit/mortgage application and BANG! you’ve just bought one of the worst forms of insurance!  As far as I’m concerned, a complete waste of money.  Even worst then the wasting of money… The false sense of security you get thinking your family will be taken care of if something happens to you, when in fact odds are they will get…

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Originally posted on Allen LaRose, FMA, CIM, FCSI:

When the economy (and financial markets) are at it’s extremes, either doing extremely well or extremely poorly, dangerous financial products and ideas become more prevalent.

Portus, Eron Mortgage Corp, Shire International Real Estate Investments, and Arbour Energy and just a few Canadian examples. The one common denominator they share, is they all are catagorized as Exempt Market Securities.

What are Exempt Market Securities?

…when companies (issuers) sell securities such as stocks, options, or bonds, they are generally required to file a prospectus. This document contains material facts about both the issuer and the security. However, in certain cases securities can be sold without a prospectus and these investments are called exempt securities; the sale is called an exempt distribution or a private placement.

What should I know about Exempt Market Securities?

These investments are not for everyone. A prospectus is meant to ensure an investor has key facts to be…

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27 Ways to Get More Sh!t Done | Greatist.

How to Get More Done

Whether we’re overwhelmed by that never-ending to-do list or simply distracted (thanks, Facebook), sometimes it feels like we just can’t get enough out of the day. Until 30-hour days are invented, follow these easy, effective tips for getting more done in the 24 we have.

 

Productivity Hero—Your Action Plan

 

1. Get enough sleep. Whoever coined the phrase “I’ll sleep when I’m dead” didn’t have all the facts straight. Not getting enough Zzz’s could hinder productivity at work, so try to get those recommended seven to nine hours of snooze time [1]!

 

2. Create routines. Make a habit of, well, sticking to habits. Schedule actions like writing emails at a certain time or hitting the gym after work, and try to do them daily. Soon that routine will happen on autopilot.

 

3. Wake up earlier. As long as you’re still able to squeeze in enough sleep, try extending the day by getting up an hour earlier—when it’s still quiet and there are fewer distractions.

 

4. Step away from the inbox. Incoming emails can be a nuisance. Make a habit to only check the inbox at certain times of the day to avoid getting sidetracked with requests and responses.

 

5. Make a daily to-do list. Stay away from huge to-do lists. Instead, create a daily list of realistic jobs to tackle, like folding laundry, scheduling a doctor’s appointment, or paying the cable bill. Break up big goals into micro-tasks, like going to a yoga class over getting six-pack abs, or writing a page over completing a thesis. Soon, the small things will add up to big accomplishments.

Read the rest…. 27 Ways to Get More Sh!t Done | Greatist.

Owning Excess is Not the Same as Experiencing Success.

Excess is Not the Same as Success

excess-is-not-success

When success is equated with excess, the ambition for excess wrecks us.” —Switchfoot, American Dream

We live in a complicated world—one that has confused excess with success.

We desire lasting significance and influence and impact, but spend most of our time chasing temporal possessions.

Consider how many of our resources are directed towards this accumulation of material goods. We spend our hours earning money. We spend our money buying products. We waste our energy caring for them. And then we punch the time clock on Monday to start the process again.

For an economy based on consumerism to thrive, goods must move. Money must be earned, money must be spent, and the demand for material possessions must continue to increase. Our economy must constantly create goods and manufacture needs.

The result is a world of excess. Even when basic physical needs are met (shelter, clothing, food), the cycle must continue. More goods must be created and more need must be manufactured.

Excess becomes the unintended goal of a consumeristic economy. (tweet that)

Somewhere, understandably, excess also became the goal of the individual. Whoever dies with the most toys wins became the reigning mantra of our culture.

This was an unfortunate turn.

Our souls long for greater accomplishments than the accumulation of material possessions. Nobody sits across the table from another human being and unequivocally declares their greatest goal is to own as much stuff as possible. We think and dream in much broader terms.

We long for something greater than material excess. Our hearts define success differently.

We desire significance. To be known as good fathers and mothers and husbands and wives and friends and citizens.

We desire influence. To use our gifts and make the world better. We want to know our lives mattered for something.

We desire freedom and opportunity. Not just for ourselves, but for others.

We desire love. To be fully known and fully accepted.

Unfortunately, too often, our unchecked pursuit of more stands in the way of this success. Excess material possessions steal our money, time, energy, and freedom. Our definition of true success gets lost in the noise.

Rediscover your greatest goals. Redefine your greatest pursuits. And refuse to equate material excess with lasting success.

Owning Excess is Not the Same as Experiencing Success.

How Scary is the US National Debt? Almost as scary as the fact Tony Robbins, yes the motivational speaker, is the one delivery this most depressing of economic insight.

Hell no, we won’t pay: How technology transformed our perception of value

Open Source. The backlash against Software Patents. Cloud Computing. Bitcoin. 3D Printing. Post-PC. Cord-Cutting. Electric Vehicles and Alternative Energy.

There are ideological and social drivers that are unique to every single one of these things, and yet there is a common thread that ties them together. I call this trend “anti-spendism”.

Anti-spendism is not necessarily a social movement that is tied to the betterment of society as a whole. It’s not like socialism or communism, where we are talking about a desire to more equitably distribute wealth to the have-nots.

It is by definition, the personal, self-centered desire not to expend capital at all. Or to put a more modern take on it, rapid advances in technology have so lowered our perceptions of what things should cost, that ultimately many goods and services have become devalued far below what people are willing to pay for them.

To put it bluntly, anti-spendism is “Hell no, we won’t pay” syndrome.

via Hell no, we won’t pay: How technology transformed our perception of value | ZDNet.

How to transfer cottage ownership – and reduce the tax bite

TIM CESTNICK

Special to The Globe and Mail

Published Wednesday, Jun. 11 2014, 5:38 PM EDT

Last updated Thursday, Jun. 12 2014, 2:21 PM EDT

 

Cottage memories are like none other.

If you’re visiting a friend’s cottage this summer, here are a few tips that will be sure to create lasting memories for everyone: Bring four very large suitcases (store one in each bedroom if necessary), bring at least two dogs (those with digestive problems are best), start a fire (preferably outside the cottage, and big enough to burn a picnic table), roast marshmallows (bring those mini ones with toothpicks and see who can stand the heat) and scare the kids (ghost stories to give them nightmares for three days can add to the fun).

How to transfer cottage ownership – and reduce the tax bite – The Globe and Mail.

Lowest cost versus best value

Posted: June 1, 2014 in articles

Originally posted on Prepared in Canada:

I have a great day job…I get to shop for a living!  I work for a large, multi-national construction company and I head up the procurement operations for their Canadian division.  Every year my team of 20 buys hundreds of millions of dollars worth of goods and services.  And because our company has a profit share program there is a tremendous incentive to find the lowest cost.

However, finding the cheapest price is not always the best thing to do.  What my department is always focused on instead is finding the best value.  Understanding the difference is critical.  We have to balance many items to find the best value and cost is just one of them. A particular supplier might have an incredibly low price but if I can’t get enough of the item or I can’t get it when I need it, then the low price is irrelevant. Or…

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Vancouver company hopes to kickstart micro home revolution with $25,000 units – BC | Globalnews.ca.

Imagine being able to own a brand-new home for $25,000.

A Vancouver man hopes to revolutionize homeownership and small space living with his easy-to-assemble micro homes.

Nomad Micro Homes and its President Ian Kent are raising funds on the crowd-funding website indiegogo to make affordable micro homes a reality.

Kent says there are multiple uses for homes which are about 160 square feet in size.

“There’s a wide range of uses, from people using them as additional accommodation, to recreational property — you could basically drive this home in and assemble it in a week.”

The homes are easy to assemble and set-up.

“At least one handyman with a helper could assemble it in less than a week, it’s kind of an IKEA type model,” says Kent.

Three different models are proposed, starting at $25,000 for the base model, and $28,000 for the “Live” model that includes kitchen appliances and bathroom fixtures.

The homes don’t have a traditional foundation, instead they sit on screw piles. Screw piles are piles you can screw into the ground with your hands.

“You would be feeling very good about establishing a trend-setting mode of sustainability,” says Kent.

“You’re flexible in location – you could pick up and move it somewhere else.”

Buyers who want to go “off the grid” can upgrade to a composting toilet, solar power system, greywater treatment system and rainwater collection system.

All of the models can be hooked up to existing sewer, water and electrical systems.

The micro homes could be an answer to B.C.’s high real estate prices, but first, cities and municipalities need to change their bylaws, says Kent.

“The bylaws in many municipalities and cities don’t quite allow something like this, it’s something that we are going to start lobbying for once we have this product fully established.”

Vancouver currently stipulates that a home cannot not be smaller than 320 square feet.

“The bylaw may be a bit antiquated for the new sustainable housing models coming out. They’ve allowed laneway houses, but they still seem to be quite expensive to build and rent.”

“People are building small houses on trailers and remove locations where there are no bylaws to contend with,” says Kent.

Living in a smaller space would also force people to do more with less, says Kent.

“Your consumerism would drop, because you wouldn’t be able to fit in things that people usually buy. You would become very efficient and that’s going to be a forced savings in your bank account. Plus, you are going to become a fantastic recycler and you are going to come up with new methods of recycling, because you can’t fit garbage in your unit.”

Vancouver company hopes to kickstart micro home revolution with $25,000 units – BC | Globalnews.ca.