Retiree Pension Rep’s Report on the MTS DB Pension Plan
Oct. 19, 2017
Retiree Pension Reps Report on the MTS DB Pension Plan
To TRAM Members.
DB Pension Committee
The last Pension committee meeting was June 14th, 2017. The Plan Actuary from Willis Towers Watson Mr. Morrison reviewed the January 1, 2017 actuarial valuation results. He highlighted that the going concern position of the plan improved to 123% funded up from 117% the year before 6% better while the wind-up position declined to 91% funded up from a 96% (5%) poorer than the prior year. When asked why the wind-up position declined he indicated that the decline was largely due to a lower discount rate, as prescribed by the regulator (OSFI). The discount rate used in the solvency valuation decreased from Jan 1, 2016 to Jan 1, 2017, which caused the solvency ratio to decline (i.e. lower interest rate = higher liability).
As mentioned in my last Report to the TRAM Membership Debbie Rehn Doyle, Director Treasury left MTS for another position at an Investment Firm. Nikki Keating, Director Finance at Bell has replaced Debbie on the committee and is our contact. The next pension committee meeting is scheduled for late November, 2017
This guaranteed COLA is equal to two-thirds of the increase in CPI to a maximum CPI increase of 4%. COLA increases are granted each year in July. In 2017, retirees received a COLA increase of 1.00% which is two-thirds of the 2016 CPI increase of 1.5%. In 2016, retirees received a COLA increase of 1.07% which was two-thirds of the 2015 CPI increase of 1.6%.
DB Pension Surplus Implementation Committee
The Pension Surplus Implementation Committee met on June 14th, 2017 to provide a status update to the committee members on the Surplus Distribution. As of Oct. 17th, there is approximately $1.3M in undistributed surplus meaning that 99% of the funds have been distributed with 1% remaining. Approximately $157K for 100 members must be kept in the plan in trust for Unlocated Members such as Retired Members, Beneficiaries or Deferred Members. All other Unlocated Members who are Exited Members entitlement to any Surplus is extinguished as per the court approved Surplus Implementation agreement.
The committee has been deliberating how the net remaining funds will be used to provide future benefits to plan members. To that end we have asking the plan actuary what benefits/options are available/viable for the remaining funds. We have been investigating the possibility of distributing the remaining funds, as that seemed to be the committee’s preference; however, details have not been confirmed. This will be discussed further at the next meeting in late November, 2017.
Please direct Questions e-mail address pensionsettlementquestions@mts.ca
Or go to the MTS Pension Plan website - contact us http://mtspensionplan.ca/contact-us/
Yours truly,
J. Larry Trach
Retiree Representative
MTS DB Pension Committee
