Pension Plan Solvency: Good News For Members + MORE Jun 17th

The current situation
Bao Lam, a 43-year-old certified financial planner in Waterloo, Ont., believes in second opinions. He asked MoneySense for our thoughts on whether he’s on track to leave his high-paying—but stressful—job at age 47. That’s when he hopes to sell his business for $900,000 and invest that money until his retirement at 65. Bao’s 39-year-old wife Jeannette, who is currently his assistant, would stop working. “Doctors need a second opinion about their own health,” says Lam. “It’s no different with financial advisers.”
The Lams, who have a teenage son, have assets including a $325,000 home and $222,000 in registered and non-registered investments. They will be cashing in Jeannette’s $27,000 GIC and putting it towards their $118,000 line of credit later this year. The couple, who gross $180,000 per year, hope to have all their debts (including a $128,000 mortgage), paid off before retiring.
When they sell their business, the Lams will receive $90,000 gross per year for 10 years, with payments made monthly…

Do you have an employer sponsored pension plan? Consider yourself lucky. Today fewer than three in 10 Canadians have a company pension plan – and those who do face an uphill battle with their savings. While low interest rates are welcomed if you’re paying off debt like a mortgage or credit card, they pose a challenge for retirees and company pension plans who depend on interest rates for decent returns.
Despite the low rate environment, though, new developments are in store for pensions in 2013. The Mercer Pensions Health Index reached 91 per cent for May, up from 86 per cent in April and 82 per cent at the beginner of 2013.
Behind the Numbers
So why is the solvency of pension plans all of a sudden improving? “Pension plans are getting a boost from three key sources: buoyant equity markets, rising long-term interest rates and plan sponsors making contributions to fund the deficits,” says Manuel Monteiro, a partner in Mercer’s financial strategy group. “For many plan sponsors, getting back to a fully funded status is now clearly in sight…

Father’s Day is coming up this weekend – and you’re likely among the hordes at the mall shopping for dear old dad. According to BMO Bank of Montreal’s 2013 Father’s Day study, dads can expect a sweet haul: spending has increased on presents for pop by 10 per cent from last year.
The average cost of Father’s Day gifts comes to $95 – up from $86 in 2012. However, this still comes up short when compared to the average $107 shelled out for Mother’s Day! The study also found that sons tended to spend more on their fathers with an average of $110, compared to daughters at $80.
Don’t Overspend On Hallmark Holidays
While dad certainly deserves to be spoiled (did you teach yourself how to ride that bike?), consumerist holidays can easy to blow off your budgeting principles, especially for younger earners who tend to be on tighter budgets. That might mean sticking to a savings guideline if you’re looking to surprise dad with a bbq or tickets to the big game.
In these cases, it can be tempting to pull out the credit card – but be careful not to let Father’s Day linger on your balance year round…

When Nicholas Hui and his wife Kathy Chan decided to pay off their mortgage in six years, they knew there would be some sacrifices. Any type of unnecessary spending would be out of bounds while they worked toward their goal, Nicholas says. But that doesn’t mean the couple wanted to stop having fun altogether.
As fervent Toronto Raptors fans, they hatched a plan that allowed them to satisfy their itch for live basketball for free. They would purchase season tickets, which can provide up to 37% savings over regular game ticket prices, pick the games they wanted to attend on weekends, and then sell the remaining tickets at face value to break even. “It’s perfectly legal,” Nicholas points out.
The couple was also shrewd when it came to vacations. While European getaways were not within their budget, the Vancouver natives would go home annually, combining some downtime with family visits. And, of course, Nicholas says, staying with Mom and Dad is always free.
The couple’s main reason for paying off their home early was financial flexibility…