November 2021 Edition

November is Financial Literacy Month, a great opportunity to highlight how encouraging financial empowerment is at the heart of everything we do.

In fact, financial literacy and cooperation have been part of Desjardins Group's mission for 120 years. These values are also in the DNA of Group retirement savings.

To make information easily accessible, we strive to always communicate with your plan members using a clear and simple format. All the information shared with them is intended to be relevant so they can spend less time deciphering financial jargon and more time planning for their retirement.

We also provide plan members with practical, user-friendly resources such as:

• The online Education Centre, which offers free webinars by our education team
• Personalized videos
• The On Target Retirement goal tracker
• Helpful articles and tools

We need to keep promoting financial literacy. The more we talk about it, the better it is for everyone!

To find out more about our approach, see Communication and education Opens in a new window..

According to the results of the 2019 Canadian Financial Capability Survey, 44% of Canadians say they've found ways to increase their financial knowledge and confidence over the past 5 years. The survey findings show that financial literacy, resources and tools help Canadians manage their money. For example, people who make a budget have greater financial well-being. Also, those with a plan for saving are more likely to feel better prepared and more confident about their retirement.

As of November 23 and 24, 2021, How to preserve and transfer your wealth will be added to our webinar offer. This course will focus on the benefits of estate planning. Your plan members will learn about the optimal way of transferring their wealth to ensure peace of mind for their loved ones.

Feel free to promote the new webinar as well as our existing webinars that cover these topics of general interest:

• Budgeting
• Debt management
• Investments
• Government retirement benefit programs
• Payout products
• Tax benefits of retirement savings plans
• Goal-based savings

See online dates by logging on to dfs.ca/GroupPlanMember Opens in a new window.

Our live webinars are offered to plan members free of charge. To sign up, they can just:

• Log on to their Group retirement savings account via the Omni app or via dfs.ca/GroupPlanMember Opens in a new window.
• Go to the Wellness Centre
• Visit the Education Centre

An email was sent to your plan members in early November encouraging them to sign up for the new webinar.

Encourage your employees to enter the On your way to financial empowerment contest. They’ll get closer to their savings goals and could win up to $3,000!

To enter the contest, all they have to do is:

1. Log on to their Group retirement savings account via Omni Desjardins or via dfs.ca/GroupPlanMember Opens in a new window., between October 5 and December 5, 2021.
2. Visit the Financial Wellness Centre for a chance to win $1,500.
3. Enter or update their information in On Target Retirement and they could win another $1,500!

The first winner

The first random draw was held on November 2. Congratulations to Fabrice Selvon of Saint-Laurent, Quebec, who will receive $1,500! The next (and final) draw to select the second winner is scheduled for December 7, 2021. They’ll receive either $1,500 or $3,000, as explained above.

The contest winners can have the money paid out to them directly or deposited into their Group retirement savings plan. If they select a registered plan, they must ensure there is sufficient contribution room.

Communication to plan members

We’ll send a reminder email on November 18, and another one in December.

You can print out these posters or upload them to your intranet to promote the contest to your employees:

contest poster, 8.5 x 11 format (PDF, 671 MB) External link. Opens in a new window.

contest poster, 11 x 17 format (PDF, 814 MB) External link. Opens in a new window.

To learn more, read the full contest rules (PDF, 291 KB) External link. Opens in a new window..

Before you fill in your T4 slips, make sure that none of your Deferred Profit Sharing Plan (DPSP) plan members are specified shareholders or persons related to the employer. If you made plan contributions on behalf of these individuals, both you and they could face serious tax consequences, and the Canada Revenue Agency (CRA) could revoke your plan’s registration. If you find yourself in this situation, consult with your tax specialist for an opinion on how to correct the situation with the CRA.

A person cannot participate in a DPSP if:

• They are related to the employer (for example, the majority shareholder of the employer or the majority shareholder’s spouse, child, brother, sister, mother, father, brother-in-law, etc.)
• They are a specified shareholder of the employer or of a company related to the employer, or if they are related to such specified shareholder
• They are related to a member of the partnership, if the employer is a partnership or
• They are, or are related to, a beneficiary under the trust, if the employer is a trust

Generally speaking, a specified shareholder is a person who owns, directly or indirectly, at least 10% of the issued shares of any class of the capital stock of the company or of any other related company. For the purposes of determining the 10% threshold, a person is also deemed to own the shares of a company held by a person with whom they do not deal at arm’s length (such as a spouse, child, brother, sister, father, mother, brother-in-law, etc.).

Important: These definitions are not exhaustive. For advice on your specific situation, please speak to your tax specialist.

Reminder: Only employers can contribute to a DPSP.

Please disregard this article if your plan has immediate vesting.

Note that forfeited benefits in defined contribution (DC) plans are allowed in the following provinces: Nova Scotia, New Brunswick, and Saskatchewan.

What is vesting?

Vesting can be used as a strategy to retain employees. It is subject to plan membership or employment requirements (as defined by plan rules) up to a maximum of 24 months. Employees are encouraged to remain in employment, failing which they forfeit their employer contributions.

What happens if an employee leaves before employer contributions are vested?

If you offer a deferred profit-sharing plan (DPSP) or a defined contribution (DC) plan without immediate vesting, non-vested employer contributions are returned to you. The benefits forfeited in a given year must be used by December 31 of the following year. This means that the amounts forfeited in 2020 must be used by December 31, 2021.

What happens to forfeited benefits?

Depending on your plan rules, you can:

• Pay for all or part of the contributions you would normally make to your plan
• Pay the fees you are responsible for
• Receive forfeited amounts in cash or by bank transfer less applicable taxes
• Distribute the unused benefits to your plan members

If you choose the last option, you have to let Desjardins know whether you would like the unused benefits to be distributed evenly among all employees or on a pro rata basis.

If you haven’t already done so, please contact your client relationship manager or call Plan Sponsor Services at 1-888-510-4762 to let us know what you would like to do with these forfeited benefits.

While we don’t recommend making cash withdrawals from registered plans (RRSPs, VRSPs, DC plans or SPPs) because the whole point is to save for retirement, plan members can make withdrawals if they need to (if permitted by the plan). For the withdrawal income to count towards the 2021 fiscal year, plan members need to take certain deadlines into account, depending on how they make their withdrawal request:

• Online (preferred approach): Plan members have until 4:00 pm (ET) on December 31, 2021, to request a withdrawal online (if permitted by the plan).
• By phone: Plan members have until 4:00 pm (ET) on December 31, 2021, to call our Customer Contact Centre to request a withdrawal.
• By email, fax or mail: Plan members must send us their withdrawal request by December 21, 20211.

If plan members have any questions, they can call our Customer Contact Centre at 1-800-968-3587, Monday to Friday, from 8:00 am to 8:00 pm (ET). One of our agents will be happy to help them.

Are any of your plan members celebrating their 71st birthday this year? Please make sure to review the What you can do section below to ensure a smooth transition for them.

Plan members sometimes forget that they need to choose a retirement income option to convert their registered retirement savings plan2 by the end of the year they turn 71. If they don’t, we’ll transfer any non-locked-in amounts to a RRIF and any locked-in amounts to a LIF. And if their balance is less than 20% of maximum pensionable earnings for the year ($12,320), they’ll receive a lump-sum payment, which is taxable.

We send plan members in this situation a statement of options every September and try to encourage them to choose how they want to convert their savings, but there are always a few stragglers. We’re hoping you can help us help them.

What you can do

• Invite plan members who are turning 71 to contact our retirement advisors at 1-877-585-3033. Our advisors can not only help them understand their options, but also help them choose the combination that will best suit their needs.
• Ensure that plan members’ addresses are up to date. If they aren’t, it’s important to do the address change first. You can remind plan members to change it themselves with the Omni Desjardins app or on the secure site at dfs.ca/GroupPlanMember Opens in a new window., or you can do it for them at dfs.ca/plansponsor Opens in a new window.. Afterwards, your employees who have not received their statement of options at their new address should call the Customer Contact Centre at 1-800-968-3587 so that we can send them another copy.

To make sure these plan members receive all the contributions and tax benefits they’re entitled to, send us their final contributions (remittances and payments) by December 1, 2021. By law, we’ll have to return any contributions received after December 31, even if the payroll reference period is in 2021.

And if you have any questions, you can contact your dedicated administrator or Plan Sponsor Services at 1-888-510-4762.

Some discrepancies can have major financial and tax implications for your plan members:

• A payment without a corresponding contribution list
• Unpaid contributions
• Discrepancies between contribution lists and payments
• Missing enrolments

For RRSPs, TFSAs and non-registered plans, investments can’t be made until the resolution of the discrepancy or the transmission of the missing information.

In addition, RRSP contribution receipts can’t be issued if there’s missing or incorrect information.

Here’s what happens:

Find out more about the tax implications of missing enrolments in our October 2021 article Opens in a new window..

Comgest

At the end of August 2021, Comgest informed us of a reorganization of its Global Emerging Markets (GEM) strategy management team and consequently the Desjardins SocieTerra Emerging Markets Equity Fund, an underlying fund of the Multi-Manager Emerging Markets Fund. Following an internal review and analysis of its underperformance in the last 3 years, which worsened in 2021, 3 new managers for the GEM strategy were appointed: Emil Wolter, Juliette Alves and Slabbert Van Zyl. The strategy was previously managed by Emil Wolter, David Raper and Charles Biderman. As a result of this change, Charles Biderman has left the firm. David Raper is now focused on the Asia strategy while remaining an analyst for the GEM strategy. Juliette Alves, who was formerly an assistant manager and LATAM analyst, is now a decision-maker on the GEM strategy along with Emil Wolter and Slabbert Van Zyl. Going forward, Emil Wolter will focus entirely on the GEM strategy, leaving his responsibilities of managing the Asia strategy to David Raper. The mentoring of the firm’s analyst teams is now the responsibility of Caroline Mae, Chief of Staff. Slabbert Van Zyl will continue to work in the GEM team but has moved from an analyst position to manager.

AllianceBernstein

On October 5, 2021, AllianceBernstein announced the departure of Raymond Humphrey, a member of the Desjardins Enhanced Bond Fund management team. Raymond was a portfolio manager dedicated to Canadian fixed income portfolios. Michael Rosborough, who joined AllianceBernstein in 2020 as portfolio manager for global multi-sector strategies, collaborates with Yves Paquette in the day-to-day management of the portfolios, including the Desjardins Enhanced Bond Fund.

In addition, AllianceBernstein informed us of 3 other important news items:

• The departure of Shawn Keegan, who was a member of the Canadian Fixed Income team for the IG Credit Stream. Eamonn Buckley, who is a member of the Global Credit, Euro Credit, Euro Fixed Income and UK Fixed Income teams took over Shawn’s old position.
• The departure of Darren Williams as Chief Economist. Eric Winograd has been appointed Chief Economist in Developed Markets. Eric was already covering the United States and Canada, but now also covers Western Europe, Japan and Australia.
• The creation of a responsible investment team within the fixed income business line under the leadership of Erin Bigley. Erin has been with AllianceBernstein for over 20 years and has been actively involved in responsible investing initiatives within the business line, in addition to being a product specialist.