Canadian dollar spoils pension gains

Currency losses continued to eclipse global equity returns

Canada’s soaring dollar “wreaked havoc” on pension funds in the third quarter of 2007, according to a survey released by RBC Dexia Investor Services in Toronto. Within the $340-billion RBC Dexia “universe,” Canadian pensions lost 0.7 per cent in the quarter, trimming year-to-date results to just 1.8 per cent.
Currency losses continued to eclipse global equity returns. Year to date, the Morgan Stanley Capital International World index climbed 8.0 per cent in local currency terms, but this translates to a 4.1-per-cent drop in value when converted for Canada.

“Given that foreign stocks constitute about half the equity allocation of a typical pension fund, Canadian plan sponsors are sharpening their focus on currency management,” said Don McDougall of director advisory services at RBC Dexia.
Canadian equities returned 0.6 per cent to pension funds in the last quarter, trailing the Standard & Poor TSX Composite index by 1.4 per cent.

A large majority of companies around the world are struggling to attract and retain top-performing and critical-skill workers but many do not fully understand why workers join or leave an organization. That’s according to recent surveys of 946 companies and 13,000 employees by Watson Wyatt Worldwide in Washington, D.C., that find efforts to limit turnover are hampered by an incomplete understanding of employee priorities.
As an illustration of the disconnect, employees rank in importance why they leave, from one to five: stress levels, base pay, promotion opportunity, career development opportunities and work-life balance. However, employers rank differently: base pay, career-development opportunities, promotion opportunity, relationship with supervisor/manager and work-life balance.

“Setting expectations and delivering on the reward promise is a formula for having a dedicated, productive workforce,” said Laura Sejen, global director of strategic rewards at Watson Wyatt. “When workers see their performance has a real impact on rewards, and management follows through, employees become more committed and confident about opportunities with their employer.”

Sarah Dobson is editor of Canadian Compensation & Benefits Reporter, a sister publication to Canadian HR Reporter. For more information, visit

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