November 2018 Edition

To find out more, check out our Economic Commentary document (PDF, 1.2 MB) Opens in a new window..

As part of its governance process, Desjardins Insurance evaluates each fund offered on its group retirement savings platform on a quarterly basis to ensure compliance with its selection criteria.

This evaluation is based on four main elements:

• Personnel
• Investment processes
• Compliance with the stipulated management style
• Performance

The result of this analysis is that some funds are placed on a watch list that is updated every quarter.

For each fund on the watch list, the areas of concern are identified and then closely monitored. Funds remain on the watch list until the situation has been resolved or, if the concerns persist, until they are no longer recommended or are removed from the platform.

Our fund watch list, including a list of funds that are no longer recommended, is published quarterly in the Your news section of the Plan Sponsor Services website (dfs.ca/plansponsor External link. Opens in a new window.).

From October 14 to 20, 2018, 8,000 cooperatives in Canada, including Desjardins Group, celebrated Co-op Week. It’s in that spirit that on Thursday, October 18, nearly 200 Group Retirement Savings employees in Montreal enthusiastically responded to an invitation from management to give back to the community.

The GRS team devoted their time to local organizations whose mission is to give back and change lives:

• Sun Youth, a local agency that provides food assistance and Christmas baskets to low-income families
• Chaînon thrift store, whose proceeds support their sister organization, which is a women’s shelter
• Welcome Hall Mission, a homeless shelter
• Moisson Montréal—Canada’s largest food bank

And employees were proud of what they accomplished! Their team spirit was on display as they pulled together to lend a hand doing all kinds of jobs, from washing and chopping turnips, to assembling “soup recipes in a jar,” to sorting through clothing donations. Their half day of labour showed them how hard these organizations are working to make a difference. And it gave everyone involved a renewed appreciation of what they do.

Desjardins Insurance is pleased to announce that a new fund will be launched on our group retirement savings platform on November 30, 2018. This fund, which is presented below, will enhance our global large-cap equity offer.

Acadian Global Managed Volatility Equity Fund

The fund is managed by Acadian Asset Management, a privately-owned investment management firm based in Boston that specializes in risk-controlled portfolios. The fund aims to provide long-term capital appreciation while seeking to reduce overall portfolio volatility by investing primarily in global equity securities. The fund manager selects securities and weightings to build a portfolio designed to have materially lower total risk than its benchmark. The manger also tries to forecast which securities will outperform relative to their country and sector, and which country or sector zones will outperform relative to the benchmark.

For more information about this new fund, please contact your Client Relationship Manager.

Update on Invesco’s holdings

On October 18, in a deal with Massachusetts Mutual Life Insurance Co., Invesco agreed to pay $5.7 billion to acquire OppenheimerFunds, which specializes in picking stocks and bonds, especially in the international arena. The deal would increase Invesco’s assets under management to more than $1.2 trillion, as OppenheimerFunds manages more than $246 billion in assets.

Organizational changes at Addenda

On September 30, Addenda Capital announced that Richard Beaulieu, Vice President and Senior Economist, would be retiring in 2019. The recruitment process to find his successor has already started.

As part of our periodic review of our Multi-Management Funds, we will be making changes to the fund composition effective November 30, 2018. This is in line with our management philosophy for the Multi-Management Funds, the goal of which is to optimize long-term expected return for a given level of risk.

The main changes are as follows:

• To increase diversification, we are increasing the target allocation to foreign securities within the fixed-income component from 20% to 30%. Additional exposure will come mainly from the Vanguard Global Fixed Income Index Fund. In connection with this change, the benchmark for the Funds’ fixed-income portion will now be made up of 70% FTSE Canada Universe and 30% Bloomberg Barclays Multiverse hedged.
• The allocation of funds within the foreign large cap equity component has been revised to optimize complementarity in terms of style. Among other things, this change involves the addition of the Acadian Global Managed Volatility Fund.
• To increase expected long-term returns and reflect the region’s growing weight in the MSCI All Country World Index, we will increase the target allocation to emerging markets equities within the foreign equity component from 7.5% to 10%. Additional exposure will come mainly from the DFS BlackRock® MSCI Emerging Markets Index Fund.

These changes won’t affect pricing.

To optimize the rebalancing process used with respect to our internal portfolios of funds, neither the Multi-Management Funds nor the Desjardins 30/70, Desjardins 50/50, Desjardins 70/30 or Desjardins 90/10 funds will be rebalanced systematically on a quarterly basis. Starting on February 28, 2019, we will analyze their asset allocation at the end of each month and rebalance only when specific limits are exceeded.

For the total weightings in fixed-income securities and growth securities, relative limits will be set at 25% of the target, whereas these limits will be set at 30% of the target for the other asset classes. If one of these limits is reached, the portfolio will be completely rebalanced.

In addition, within each asset class, relative limits will be set at 30% of the target for each underlying fund. If the limit is reached, the fund will be rebalanced at the asset class level only.

If, despite these limits, a portfolio does not undergo a complete rebalancing over a 12-month period, all assets in the fund will be systematically rebalanced.

For more information about these changes, please contact your Client Relationship Manager.

Encourage your members!

How to win: Members have to watch their personalized video or update their information in On Target Retirement at dfs.ca/participant, between December 1, 2018, and March 1, 2019. Once they do, they’ll automatically be entered in the contest. Three draws will be held: on January 7, February 7, and March 7, 2019. At each draw, we will select one winner who will receive a prize of $1,000.

Your engagement is key to engaging your employees. Please print this poster and put it up where employees can see it to promote the contest. Two formats are available:

8.5 x 11 in (21.6 x 28 cm) (PDF, 736 KB) Opens in a new window. or 11 x 17 in (28 x 43 cm) (PDF, 1.4 MB) Opens in a new window.

This contest is open to all Desjardins Insurance group retirement savings plan members1.

How is the video personalized? The script is based on each member’s unique situation. From the information available in On Target Retirement, Penny (our virtual guide) gives personalized tips to achieve financial wellness. She suggests what members can do to get closer to their financial goals.

Need more information? Call us at 1-888-510-4762 This link will launch your default phone software. or talk to your Client Relationship Manager.

Good luck to everyone!

As we announced in August, participants in a registered pension plan (RPP)2, VRSP3, RRSP or DPSP who will be turning 71 before the end of 2018 were sent a benefits statement in September encouraging them to convert their accumulation plan into a retirement income vehicle, such as a registered retirement income fund (RRIF), a life income fund (LIF) or an annuity.

Certain participants have not yet contacted us to let us know how they wish to proceed with their retirement savings. Please note that these participants must convert their plan by December 31, 2018, at the latest.

If Desjardins Insurance does not receive any instructions from these participants, we will need to transfer any non locked-in amounts to a RRIF, and any locked-in amounts to a LIF. If the participant’s balance is less than 20% of the maximum pensionable earnings (MPE), which is $11,180 in 2018, the amount will be reimbursed in a lump-sum payment and will therefore the taxable for the 2018 fiscal year.

Please advise all concerned participants.

Participants can call our Customer Contact Centre at 1-800-968-3587 This link will launch your default phone software. if they require assistance.

1. Log on to the Plan Sponsor Services website at dfs.ca/plansponsor External link. Opens in a new window.
2. Click the Participant management tile on the left-hand side of the home page
3. Enter the plan member’s name and click Search
4. Click the plan member’s name when it appears at the bottom of the search page
5. Confirm their address in the Personal information section
6. Fill out the required information under the Termination tab
7. Click Confirm
8. Click Save and then Submit all changes or your changes will be lost

Our system will then be updated with the information automatically, and an options statement will be sent to the plan member.

IMPORTANT: Have your plan members wait to request their options statement until after the final remittance has been made to their accounts to avoid delays and additional fees.

The Bank of Canada’s recent interest rate increases will have a direct impact on Canadian households. The Bank’s Governor, Stephen Poloz, has suggested that Canadians should be prepared and have a plan. Calculating a budget is a good way to start.

Did you know that Desjardins Insurance offers your participants a wealth of simple and free tools to plan their budget and retirement? Have a look at the budget calculator and get tips from Penny, the virtual guide in the Financial wellness section at dfs.ca/participant External link. Opens in a new window.. A message about these tools is currently posted in the Messages section of the participant site’s home page.

Stay further abreast of the markets

Desjardins Group’s Economic Studies team, winner of the FocusEconomics Best Economic Forecaster Award in 2017 and 2018, regularly publishes economic news and analysis. To keep on top of market developments, subscribe to our mailing list. You can also read their publications at desjardins.com/economics.