I N T E R N A T I O N A L A S S O C I A T I O N O F I A T A R E T I R E E S A N N U A L M E E T I N G

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1 H E A L T H W E A L T H C A R E E R I N T E R N A T I O N A L A S S O C I A T I O N O F I A T A R E T I R E E S A N N U A L M E E T I N G R E T I R E M E N T P L A N A N D G R O U P B E N E F I T S P R O G R A M ( C A N A D A ) October 3, 2016 Jean-François Fontaine, FSA, FCIA Jean-Sébastien Senécal, ASA, AICA Montreal

2 GROUP BENEFITS PROGRAM MERCER MERCER

3 J U L Y 1, R E N E W A L - M A I N E L E M E N T S Premiums variation Cost sharing Impact on taxable benefits Health care insurance: Two process changes introduced Pay-direct drug card Generic substitution for prescription drug MERCER

4 H E A L T H C A R E I N S U R A N C E W H A T H A P P E N S I F Y O U R E T I R E B E F O R E A G E 6 5 ( Q U E B E C R E S I D E N T S ) Two choices at time of retirement Not eligible or Opting out of IATA s plan Participating in IATA s plan (55 years old + 10 years service criteria after 01/01/08) If you are eligible to IATA s plan and wish to opt out, you will need under the drug insurance law in Quebec to provide a proof of coverage with another private plan (e.g. spouse s plan, professional association, etc.). Once you opt out of IATA s plan, your choice is irrevocable and you will no longer be allowed to join the plan in the future If you are not eligible to IATA s plan or any other private plan (e.g. spouse s plan, professional association, etc.), you will be covered by the RAMQ. What happens when you reach age 65? Opting out of IATA s plan You are no longer required by the drug insurance law to participate in a private plan if you have access to that type of plan. Thus, you can now decide to opt out of IATA s plan and be covered only under RAMQ for prescription drug (automatic and mandatory coverage) Continuing your participation in IATA s plan Choosing your prescription drug coverage between two approaches (see next slide for details) MERCER

5 H E A L T H C A R E I N S U R A N C E W H A T H A P P E N S I F Y O U R E T I R E B E F O R E A G E 6 5 ( Q U E B E C R E S I D E N T S ) Choosing your prescription drug coverage between two approaches at age 65 RAMQ + IATA s plan - Prescription Drug : RAMQ list : 90% to 96.5% reimbursement (depending on the amount of the drug) o 65.5% by RAMQ (for the amount in excess of the deductible) o 24.5% to 31% by IATA s plan (depending on the amount of the drug) Other : 90% reimbursement (90% by IATA s plan) - RAMQ premium: From $0 to $660 /year /adult 100% paid by retirees Premium is collected when provincial income tax return is filed - No additional contribution is required under IATA s plan IATA s plan only - Prescription Drug : RAMQ list : 90% reimbursement (90% by IATA s plan) Other : 90% reimbursement (90% by IATA s plan) - No RAMQ premium - Additional contribution under IATA s plan: 100% paid by retirees: o Single: $1,800 /year o Family: $4,200 /year MERCER

6 H E A L T H C A R E I N S U R A N C E W H A T H A P P E N S I F Y O U R E T I R E B E F O R E A G E 6 5 ( N O N - Q U E B E C R E S I D E N T S ) Two choices at time of retirement Not eligible or Opting out of IATA s plan Participating in IATA s plan (55 years old + 10 years service criteria after 01/01/08) Once you opt out of IATA s plan, your choice is irrevocable and you will no longer be allowed to join the plan in the future What happens when you reach age 65? Provincial public plan + IATA s plan (no additional contribution is required under IATA s plan) MERCER

7 H E A L T H C A R E I N S U R A N C E W H A T H A P P E N S I F Y O U R E T I R E A T A G E 6 5 O R O L D E R Please refer to the section What happens when you reach age 65 (page 2 for Quebec residents and page 4 for Non-Quebec residents) MERCER

8 APPENDICES MERCER MERCER

9 I M P O R T A N T N O T I C E S Mercer has prepared this document exclusively for IATA to present results for the December 31, 2015 funding valuation. This document may not be used or relied upon by any other party or for any other purpose; Mercer is not responsible for the consequences of any such other use. Its content may not be modified, incorporated into or used in other material, sold or otherwise provided, in whole or in part, to any other person or entity, without Mercer s permission. All parts of this document including any files incorporated by reference, are integral to understanding and explaining its contents; no part may be taken out of context, used or relied upon without reference to the report as a whole. Decisions about benefit changes, granting new benefits, investment policy, funding policy, benefit security and/or benefit-related issues should not be made solely on the basis of a valuation, but only after careful consideration of alternative economic, financial, demographic and societal factors, including financial scenarios that assume future sustained investment losses. IATA is responsible for selecting the plan s funding policy (including margins, if any, for adverse deviations in the going concern valuation). The actuarial assumptions used in the going concern valuation reflect the actuary s best estimate, except for the margin for adverse deviations which has been selected by IATA. IATA is responsible for reviewing the going concern valuation assumptions referenced and advising Mercer as to any information it deems worthy of consideration in the determination of such assumptions. To prepare the results in this document, actuarial assumptions are used to model a single scenario from a range of possibilities for each valuation basis. The results based on that single scenario are included in this report. However, the future is uncertain and the plan s actual experience will differ from those assumptions; these differences may be significant or material. Different assumptions or scenarios within the range of possibilities may also be reasonable, and results based on those assumptions would be different. Furthermore, actuarial assumptions may be changed from one valuation to the next because of changes in regulatory and professional requirements, developments in case law, plan experience, changes in expectations about the future and other factors. The assumptions used for the valuation are described in this document. Mercer has used and relied on the membership data as supplied by Xerox as of valuation date. If the data supplied are not sufficient and reliable for its intended purpose, the results of our calculation may differ significantly from the results that would be obtained with such data. Although Mercer has reviewed the suitability of the data for its intended use in accordance with accepted actuarial practice in Canada, Mercer has not verified or audited any of the data or information provided. Statistics on distribution of the membership data are provided in this document. Mercer has used and relied on the plan documents, including amendments, and interpretations of plan provisions, supplied by IATA. If any plan provisions supplied are not accurate and complete, the results of any calculation may differ significantly from the results that would be obtained with accurate and complete information. Moreover, plan documents may be susceptible to different interpretations, each of which could be reasonable, and the results of estimates under each of the different interpretations could vary. There were no material changes made to the plan provisions since the previous valuation. We used financial data submitted by Deloitte as of the valuation date without further audit. Customarily, this information would not be verified by a plan s actuary. We have reviewed the information for internal consistency and general reasonableness. Funding calculations reflect our understanding of the requirements of PBSA s legislation, the Income Tax Act and related regulations that are effective as of the valuation date. Mercer is not a law firm, and this analysis is not intended to be a legal opinion. You should consider securing the advice of legal counsel with respect to any legal matters related to this document and any attachments. The plan administrator is solely responsible for selecting the plan s investment policies, asset allocations and individual investments. MERCER