Monthly Archives: February 2012

Changes to the Canada Pension Plan – an Overview

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Over the past few months I have attended various presentations concerning the changes being made to the Canada Pension Plan (CPP).

These changes have primarily come about to accommodate the changes in our country’s demographic makeup. People are living and working longer and as a result, exploring the potential of needing to save more money for life after work. As a result, the Canadian Pension Plan is changing.

The following is a brief outline of the 4 amendments being gradually implemented from 2011 to 2016:

  • Restore the adjustment factors to their actuarially fair levels for retirement pensions taken before and after age 65.

Be Prepared! Tips for Travellers

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We never expect that our relaxing vacation will include a trip to the waiting room of a hospital or medical clinic but accidents and medical emergencies do happen while travelling.  As Canadians, we are accustomed to providing our Provincial Health number at the hospital and being treated without having to pay for services.  Follow up tests and having a prescription cannot only be an inconvenience, but an unexpected expense.  Unfortunately when medical interventions are required while travelling outside of Canada, the process of paying for treatment and submitting a claim back home is more involved.

Sprechen Sie Pharmacy??

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Navigating the terms associated with pharmacies, prescriptions and drug plans can sometimes sound like a foreign language.  Here’s a glossary of what some of those terms mean:

Dispensing fee

When you pay for a prescription at a pharmacy, you are paying for two components:  the ingredient cost, or the cost of the actual drug being dispensed, and the dispensing fee, the professional fee your pharmacist charges for dispensing the drug and giving you advice.  Some benefits plans have dispensing fee caps or maximums, or deductibles based around the dispensing fee.  You can ask your pharmacist what dispensing fee they would charge before getting your prescription filled.

Life Insurance as an Asset Class

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One of the most important ideas in investing is the diversification of asset classes. In 1982, Harry Markowitz developed the idea of an “efficient frontier”. In 1990, two other gentlemen (Miller & Sharpe) developed the idea of the Modern Portfolio Theory (MPT), and garnered recognition when they were awarded the Nobel Prize in Economics.

Since these two developments, discussions about investing and diversification are usually done in context of Modern Portfolio Theory. Most agree that the primary asset classes in diversification are:

  • Fixed Income (bonds & mortgages)
  • Equities (common stocks)
  • Cash
  • Real Estate