TRAMTelephone Retirees Association of Manitoba

Annual Report

To:   MTS Retirees and Beneficiaries                                              January 19,2009


From: H. Restall

          Your Representative on the Pension Committee


I am writing to advise you of the status of  two major issues that are before the pension committee.

The first of these is the introduction, by MTS, of a Defined Contribution Plan (DCP) as of Jan.1st,2010 that is mandatory for all new MTS employees and optional for existing active employee members of the Defined Benefit Plan(DBP). Active employees have the option of remaining in the DBP or if they wish to transfer their pension contributions , as of their transfer date, to the DCP. Their past contributions to the DBP remain in the DBP and on their retirement they will receive a pension based on their benefits earned while in the DBP. The introduction of  the DCP should have no immediate impact on the DBP or the retirees however, over time, with all new hires going into the DCP along with those DBP members who opt to transfer to the DCP there are unanswered questions at this time relating to the gradual reduction in the funding of the Indexing Account. At the last Pension Committee meeting on Oct.14th  I asked if any long range studies had been done on what impact the introduction of the DCP would have on the DBP. I was told that no such studies had been done. I feel that this is a legitimate concern and it will be raised again at the next meeting.  



The second issue is one of immediate concern to existing pensioners and beneficiaries  and very much a  concern to future retirees. The issue is the existing formula that is used to determine the pension entitlement  of a retiring plan member. The formula is based on years of service, best average earnings and adjusted for the portion of pension contributions that are paid to the Canada Pension Plan. The impact on an individual plan member depends on the determination of the average of the yearly maximum pensionable earnings (YMPE)  used in the Canada Pension Plan, the month of retirement and whether the plan member was full or part time.   Data provided to members of the Pension Committee at the two regular and two special meetings in 2009 reveals that 73% of all retirees have received a lower pension than what they were entitled to since privatization in 1997. One percent of retirees since 1997 are receiving a higher pension than they would have received with the adjusted formula. MTS has advised that  no adjustments would be made to any retiree in this category.. The cost to reimburse the affected members is estimated at $3.1 million and an ongoing cost of $26 thousand per month going forward from the implementation of the new formula. At the Oct.14,2009 meeting the plan administrator agreed to provide in detail the MTS recommendation on resolving the issue. As of this date we have not received the MTS recommendation.  I am hopeful that agreement can be reached at the Pension Committee on a resolution to this issue and a recommendation advanced that is fair to all plan members. Failing this I have advised the committee that retirees reserve the right to take whatever action is necessary to remedy the shortfall in benefits that retirees have endured since privatization.

I am hopeful that another special meeting will be called and these concerns resolved prior to the next semi-annual Pension Committee meeting which will likely be held in May or June when the next financial evaluation by the plan actuary will be tabled.

I, on behalf of retirees and beneficiaries; Larry Trach on behalf of TRAM; and with the support of TEAM and on the advice of our counsel have filed under the Limitation of Actions Act a Notice of Application for “Leave to extend the limitation period for bringing a claim against MTS Allstream Inc. relating to damages for breach of contract pre-dating 6 years from the date an action is commenced”.  This action was necessary so that if this issue is not resolved through the Pension Committee and we must therefore seek relief through the courts that we can request that our claim be awarded from Jan.1,1997.


I thank you all for your continued support and I urge you to support TRAM  in its efforts to establish a strong voice in all matters affecting retirees and beneficiaries.