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Bell Pensioners' Group
Spring 2014
President's Report
Presented by Dan Mc Donald
Agenda
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Bell Valuation report
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Overarching Goal
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Target Benefit plan
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BPG Areas of Investigation
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BPG Board of Directors
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Solvency: 16% Deficit
$ Million
Year-End
2012
Year-End
2011
Year-End
2010
Year-End
2009
Market Value of Assets
(Net of Wind-Up Expenses)
13,341.9
12,322.8
11,679.7
10,283.2
Liability, assuming Plan is
wound up
15,874.6
15,457.4
13,197.8
12,357.0
Surplus/(Shortfall)
(2,532.7)
(3,134.6)
(1,518.1)
(2,073.8)
84.0%
79.7%
88.5%
83.2%
Solvency Ratio
Bell’s latest update on the Solvency as of May 2014 is 91%
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Overarching Goal: Improve security of
existing DB pensions
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Understand risks to pension security
 Business and Pension environment
 Legal counsel, actuarial consultation, discussions with
Bell
Understand working of government
 Political and bureaucracy: the key players and their
motivations
 Government Relations consultation
Be seen as well-informed, professional player on DB policy
Garner support for pension rules that would reduce risk
 Politicians; political staff; government Bureaucrats
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Overarching Goal: Improve security of
existing DB pensions
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Leverage opportunities, proactively and reactively, to
advocate for DB pensioners …some examples…
 BPG directly, or as part of Canadian Federation of
Pensioners
 Ontario: recommendations for legislative reform
 Quebec: critique of harmful proposals from D’Amours
 New Brunswick: reinforce with Finance the need to
honour promises made
 Federal: preparing brief on reform of insolvency
legislation (BIA/CCAA)
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Federal: preparing a response to the Target
Benefit Plan Consultation paper
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Pension Innovation for Canadians:
The Target Benefit Plan
Consultation Paper
Definition of 'Target-Benefit Plan' **
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A benefit plan that is similar to a defined benefit plan
since contributions are based on projected retirement
benefits. However, unlike a defined benefit plan, the
benefits provided to participants at retirement are
based on the performance of the investments, and are
therefore not guaranteed.
** The Investopedia.com definition
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Pension Innovation for Canadians:
The Target Benefit Plan
Consultation Paper
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The government’s consultation paper presents proposals
to incorporate Target Benefit Plans (TBPs) into pension
legislation
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The government is seeking views on the approach and
elements of a federal TBP framework that includes the
conversion of existing Defined Benefit (DB) and Defined
Contribution (DC) pension plans to TBPs
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We have a number of serious concerns about the proposal
and the very negative impact it could have on DB plan
members and will be actively involved in the consultation
process. This will include submitting our comments on the
proposal by the June 23 deadline
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Pension Innovation for Canadians:
The Target Benefit Plan
Consultation Paper
Observations
For a company that does not already have a pension plan for its
employees, this is an approach that might give that company an incentive to
offer one
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But for companies that offer DB pension plans, there are compelling
incentives to replace existing plans with target plans because they shift risks
away from plan sponsors and place them squarely on the shoulders of
pensioners
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The government plan would require consent from plan members for such a
transfer but the means of obtaining consent and the manner of approval are
not defined. This could pose a big problem
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Though it’s likely that Bell – like other DB plan sponsors - would support
the target plan concept, we cannot know whether this is something that Bell
might consider either now or in the future
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Pension Innovation for Canadians:
The Target Benefit Plan
Consultation Paper
Risks
The relaxed funding rules the government is proposing for TBPs
would mean higher funding shortfalls – in the order of 20-30% and more of them. Reduced funding obligations mean targets are
unlikely to be reached if a plan is terminated
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The average Bell DB pension is $22,000. In a windup situation
under a hypothetical TBP, Bell pensioners could see their
pensions drop considerably because the real windup deficit would
not be adequately funded
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Even in a non-windup situation, should Bell’s DB plan be
changed to a target benefit plan, your pension income could
fluctuate year-to-year depending on the financial performance of
the pension fund and employees’ willingness to make plan
contributions
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Pension Innovation for Canadians:
The Target Benefit Plan
Consultation Paper
Bottom Line
This proposal is a major attack on DB pension plans and should be
considered a serious threat
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BPG considers this proposal a top priority and the Pension Committee
and Government Relations Committee are working on this important
project
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In our response to the consultation paper, BPG will urge the
government to exclude the conversion of DB plans to TB plans from the
proposal and to put in place a consent process that would give each
retiree the option to retain his/her current DB pension plan
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A copy of our response will be posted on our website
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Pension Innovation for Canadians:
The Target Benefit Plan
Consultation Paper
Bottom Line
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We need your support
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It’s important that you keep yourselves informed on
Target Benefit Plans
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When ever possible, it’s important that you inform
other pensioners, members or non members, about
Target Benefit Plans and the threat to our pensions
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BPG Areas of Investigation
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Restructuring
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Indexation
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COLA versus indexation
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Pension vs Annuities
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Valuation Methods
Investment Strategies
Financial Health of Bell
Bankruptcy
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BPG Board Changes
Departures
Frank Bible
Bob Bartlett
Ron Hunt
Chapter Chair Southwestern Ontario
PC Chair & Nomination Committee
Director at Large
Arrivals
Bill Hollet
Yvan Dutrisac
Don Graham
Marg Eades
Patte Seaton
Vice-President
Director at Large & Benefit Prime
Chapter Chair Southwestern Ontario
Director Pension
Board Secretary
BPG Board
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Dan Mc Donald (President)
Bill Hollett (Vice-President)
Penny Gilray (Treasurer)
Patte Seaton (Secretary)
Roberte Cadieux
Bob Farmer
Yvan Dutrisac
Marg Eades
Jean-Luc Geha
Michel Doyon
Louise Touchette
Sue Dawes
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Chapter Chairs
 Marlyn
Easterbrook(Ottawa)
 Titus Ramkhalawansingh
(Toronto)
 Don Graham (SW
Ontario)
 Robert Guay (Montreal)
 Jean Lamer (Quebec City)
 Norm Kelly (Télébec)
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Q&A