Policy Reflection: Letter of Credit Usage by Defined Benefit Pension Plans in Canada

There is an argument to be made for letting corporations hold off on contributing to their employees’ defined benefit pension plans, as long as there is a guarantee the cash will come eventually. That is the reason that provincial governments began allowing creditworthy companies to instead provide a letter of credit, backed by a Canadian bank, guaranteeing the cash deposit, and secured by the company’s line of credit or some similar facility. Sometimes circumstances are such that a company needs all the cash it can get to grow, or perhaps to manage through tough economic times. Given the sluggish recovery from last decade’s financial crisis and the difficulty for pension funds to grow amid persistent low interest rates, it perhaps is understandable that more companies are using standby letters of credit as IOUs for their employee pensions. The letters provide the companies more flexibility with their capital, and diminish the risk that, should returns to pension funds rise again to more normal rates, there could be “trapped surplus.” It is, however, harder to make a case for why public sector companies and Crown corporations have begun using letters of credit in place of cash deposits to pensions. They certainly do not face the same pressure for capital flexibility, given their revenue is frequently assured, and they face no competition that would pressure them to redirect capital for strategic purposes. And yet, research shows that this is happening, at least to some degree. That should give policymakers pause. Unfortunately, there is a troubling lack of data available as to which organizations have been using letters of credit in place of cash contributions to pension funds. Clearly they are proving useful for some companies, and that the exact reasons vary widely. We observe some companies using the letter of credit option that would appear to have plenty of capital flexibility, so the rationale for their use might not be what the policy anticipated. Meanwhile, it is unclear why so many other companies have chosen not to avail themselves of this temporary pension-funding relief, despite the advantages it offers for avoiding the risk of trapped surpluses. There also remain restrictions on who can underwrite these credit guarantees — regulations do not consider foreign banks and insurance companies acceptable, for example — raising the cost for companies that arrange letters of credit. Taken together, it would seem that there are signs that the policy changes allowing pension-funding relief might be serving their purpose and might be helping companies that could use it, but there is a worrying lack of information to be sure how well they are working and what problems may loom. It certainly seems like a close review is in order. When a Crown corporation is writing IOUs to its defined-benefit pension fund, that is surely a sign that policy-makers are not keeping a close enough eye on the outcomes this policy has led to

Making management (more) relevant: breaking down disciplinary walls and pursuing neglected independent variables

The Walls Project encourages educators to broaden management teaching beyond individual and organizational variables and outcomes to systemic variables and outcomes. Its focus is on discovering independent variables that have social and environmental impacts and are currently neglected. Founded by six individuals who met at a RMLE UnConference in 2017,the Project decided to share pedagogical materials, examine them for commonalities, and present their findings at the MOBTC conference in 2019. This article summarizes these materials with an eye to revealing several variables of consequence, such as socioeconomic status and belief in economic growth, which are studied and taught infrequently in business schools. We suggest that researchers examine business curricula for similar neglected variables, study their impact across systems levels, and then develop them pedagogically to enhance management education that has a social and environmental impact

Contrast dependency and prior expectations in human speed perception

AbstractThe perceived speed of moving objects has long been known to depend on image contrast. Lowering the contrast of first-order motion stimuli typically decreases perceived speed – the well-known “Thompson effect”. It has been suggested that contrast-dependent biases are the result of optimal inference by the visual system, whereby unreliable sensory information is combined with prior beliefs. The Thompson effect is thought to result from the prior belief that objects move slowly (in Bayesian terminology, a “slow speed prior”). However, there is some evidence that the Thompson effect is attenuated or even reversed at higher speeds. Does the effect of contrast on perceived speed depend on absolute speed and what does this imply for Bayesian models with a slow speed prior? We asked subjects to compare the speeds of simultaneously presented drifting gratings of different contrasts. At low contrasts (3–15%), we found that the Thompson effect was attenuated at high speeds: at 8 and 12deg/s, perceived speed increased less with contrast than at 1 and 4deg/s; however, at higher contrasts (15–95%), the situation was reversed. A semi-parametric Bayesian model was used to extract the subjects’ speed priors and was subsequently improved by combining it with a model of speed tuning. These novel findings regarding the dual, contrast-dependent effect of high speeds help reconcile existing conflicting literature and suggest that physiologically plausible mechanisms of representation of speed in the visual cortex may need to be incorporated into Bayesian models to account for certain subtleties of human speed perception

Bribery, shaming, threat and virtue A comparison of historic and current influences on resource allocation and policy development in promoted areas in Canada and Scotland

SIGLEAvailable from British Library Document Supply Centre- DSC:DXN055845 / BLDSC - British Library Document Supply CentreGBUnited Kingdo

Plan Before You Play: An Activity For Teaching Process

This session will offer delegates the opportunity to participate in a short classroom activity that uses LEGO® bricks to demonstrate and reinforce the importance of the planning process. After the activity and typical student debrief, delegates will be asked to think about how an activity such as this might fit in their class offerings and then share with a small group so that they can further refine their ideas. The session activity, Plan Before You Play (PBP), is targeted toward introductory classes and can be modified to subject specific discussions. The activity requires little investment and up-front planning, it is easily scalable, can be played in a traditional classroom setting and, with a few minor adjustments, can be altered sufficiently to discourage information drift over multiple class offerings and across academic terms. All students can participate in this activity, regardless of their level of knowledge or interest in the subject. Participating in PBP provides students a concrete example of how good communication and a decision framework can result in more efficient use of resources. The activity encourages creativity and can be used to create healthy competition between student groups. Instructors using this activity have found it to provide a tangible example that can be used numerous times throughout a term to help remind students about the importance of proper planning.N

Studying Student Learning Through the Flipped Classroom Approach

Business information sources are neither structured nor always evident. Within a one-shot library instruction class, librarians and course instructors assess and enhance student learning using a flipped classroom. This research study seeks to make student learning evident through a multi-method approach with the goal of iteratively improving information literacy instruction.N

Exome sequencing and genome-wide linkage analysis in 17 families illustrate the complex contribution of TTN truncating variants to dilated cardiomyopathy

BACKGROUND- Familial dilated cardiomyopathy (DCM) is a genetically heterogeneous disease with >30 known genes. TTN truncating variants were recently implicated in a candidate gene study to cause 25% of familial and 18% of sporadic DCM cases. METHODS AND RESULTS- We used an unbiased genome-wide approach using both linkage analysis and variant filtering across the exome sequences of 48 individuals affected with DCM from 17 families to identify genetic cause. Linkage analysis ranked the TTN region as falling under the second highest genome-wide multipoint linkage peak, multipoint logarithm of odds, 1.59. We identified 6 TTN truncating variants carried by individuals affected with DCM in 7 of 17 DCM families (logarithm of odds, 2.99); 2 of these 7 families also had novel missense variants that segregated with disease. Two additional novel truncating TTN variants did not segregate with DCM. Nucleotide diversity at the TTN locus, including missense variants, was comparable with 5 other known DCM genes. The average number of missense variants in the exome sequences from the DCM cases or the ≈5400 cases from the Exome Sequencing Project was ≈23 per individual. The average number of TTN truncating variants in the Exome Sequencing Project was 0.014 per individual. We also identified a region (chr9q21.11-q22.31) with no known DCM genes with a maximum heterogeneity logarithm of odds score of 1.74. CONCLUSIONS- These data suggest that TTN truncating variants contribute to DCM cause. However, the lack of segregation of all identified TTN truncating variants illustrates the challenge of determining variant pathogenicity even with full exome sequencing