The Benefits Alliance Group welcomes the opportunity to respond to the ORPP discussion paper.

The Benefits Alliance Group consists of 36 Benefit Consulting firms across Canada. We represent the interests of over 5,700 employers in the small to medium size market place. Our combined client base exceeds that of all the major benefit and pension consulting firms combined.

One of our unique strengths is the engagement level our advisors have at the member level. Most of our firms will also provide financial planning and/or investment advice to plan members. We like to say we operate on the “shop floor”, not the 52nd floor.

The principles of our member firms have on average over 25 years’ experience in the group retirement market and a firm understanding of the issues surrounding the need to strengthen our current retirement savings system. We have surveyed our member firms and would like to offer the following comments regarding the ORPP proposal.

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The federal government has announced it will increase the annual maximum insurable earnings for 2015. The maximum insurable earnings will increase from $47,400 to $49,500, effective January 1, 2015.

This will result in an increase of $10 per week to the Employment Insurance (EI) weekly maximum benefit. Beginning January 1, 2015, the EI weekly maximum benefit will increase to $524 per week.

This increase means that short term disability (STD) plans that are linked to EI benefits/earnings will see benefit and premium adjustments in 2015. For example, a STD plan that specifies a maximum benefit in order to match the maximum weekly EI benefit will increase to $524.

Claimants who are currently receiving STD benefits will see their weekly benefit remain at a maximum of $514, as this was the maximum benefit at their time of claim. Claimants from groups that use the EI maximum as their STD benefit maximum will see an increase to the new $524 maximum for claims having a date of disability on or after January 1, 2015.

The group of Canadian provinces and territories united to form the Pan-Canadian Competitive Value Price Initiative (PCPI) for Generic Drugs recently announced a three-year agreement they reached with generic drug manufacturers. The agreement became effective April 1, 2014.

Under the agreement, 18 generic drugs see their prices reduced to 18% of their brand price during the agreement period. According to PCPI, this arrangement is expected to save Canadians $3.8 billion dollars over the three years through the following price negotiations:

• 2013 – Six Pan-Canadian products reduced to 18% of brand-name price
• 2014 – Four more high-volume, multi-source product were reduced to 18% of brand as of April 1, 2014
• 2015 – Four more products to be reduced to 18% of brand-name price
• 2016 – Four more products to be reduced to 18% of brand-name price

The drugs listed under the agreement make up approximately 30% of the Canadian generic:

Generic Name / Brand Name
Atorvastatin / Lipitor
Rosuvastatin / Crestor
Amlodipine / Norvasc
Ramipril / Altace
Venlafaxine / Effexor XR
Omeprazole / Losec
Rabeprazol/ Paviet
Pantoprazol / Pantoloc
Citolopram / Celexa
Simvastatin / Zocor

The agreement also features a range of new pricing ceilings for other generic drugs, depending on the number of manufacturer offering generic alternatives for each drug.

The pricing negotiated through the PCPI must be followed in all Canadian provinces and territories. Although not yet official, the Quebec government has also recently announced their intention to participate is this agreement.

In Nova Scotia, the maximum reimbursable price for multi-source generic, solid, oral dosage forms not covered by this agreement have been reduced from 35% to 25% of the manufacturer’s list price of the brand product, effective November 12, 2014.

Plans covering these drugs will benefit from the lower pricing, and plan members prescribed these drugs will see lower out-of-pocket co-pays. Medavie Blue Cross plans have been automatically updated to reflect these new drug prices.