SASKATCHEWAN BLUE CROSS EMPLOYEE PENSION PLAN

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1 SASKATCHEWAN BLUE CROSS EMPLOYEE PENSION PLAN Your group number: G Your plan, your way Your Saskatchewan Blue Cross Employee Pension Plan is a Defined Contribution Pension Plan (DCPP). Your Plan has been established to help you reach your retirement goals. The contributions to the Plan and the investment earnings on these contributions are tax-sheltered until used as retirement income. The contributions made to your accounts, along with their investment earnings, accumulate to pay you a benefit upon retirement, termination of employment, or death. The Plan provides a solid foundation on which to build savings for your retirement. The Plan alone may not provide you with all the income you need in Retirement, so treat it as part of your comprehensive retirement planning strategy. Income available from government sponsored programs and your personal saving will build on the foundation that the Plan provides. It is all about opportunities you create for yourself. Saskatchewan Blue Cross has chosen Desjardins Financial Security Life Assurance Company (Desjardins) as the Service Provider to manage the day-to-day record keeping of the Plan. If you need any guidance or information about your Plan, please contact Desjardins. The benefits you will receive from the Plan and the contributions to the Plan are subject to the provisions of the law. The Saskatchewan Pension Benefits Act, 1992 provides for the minimum benefit level in the Plan and imposes requirements to ensure proper funding of the Plan. Eligibility As a permanent Employee working at least half of the normal full time working hours specified by the Company, you are eligible to join the Plan on the first day of the month coinciding with or following the date you have completed one year of continuous employment. All other Employees are eligible to join the Plan on the first day of the calendar year after earning at least 35% of the YMPE in each of two immediately previous, consecutive calendar years. How to enrol in the Plan. Participation in the Plan is mandatory. You are automatically enrolled in the Plan once you meet the Eligibility requirements. To join the Plan, you must complete the on-line enrolment form. To make or change your investment options, you must complete the designated investment instructions form also available on-line or in hard copy. To designate your beneficiary, you must complete a Request for Change of Beneficiary. This form requires a signature. Contributions How much do you contribute? You are required to contribute 5.0% of Earnings. Member Required Contributions will be deducted by your Company and will begin the first pay following enrolment.

2 How much does the Company contribute? The Company will make a contribution based on the completion of the following years of continuous employment: Years of Continuous % of Earnings Employment 0-25, inclusive 5.0% 26-30, inclusive 6.6% 31-35, inclusive 8.7% 36 years or more: 10.8% Where a Member was hired on or prior to December 31, 1995 and elected to have the Company contribute based on the age of the Member, Company Required Contributions will be made as follows: Age of Member % of Earnings % of Earnings As at January 1 Up to YMPE Over YMPE Of the Calendar Year Under % 5.0% 40 to 49, inclusive 5.0% 6.0% 50 to 54, inclusive 6.2% 8.0% 55 to 59, inclusive 8.2% 10.0% 60 or more 10.2% 12.0% In compliance with the Income Tax Act (Canada), your Company is required to declare, at the end of each fiscal year on your T4 slip, an amount representing the total contributions made to your account during the year. This amount, called a "Pension Adjustment", reduces your RRSP room for the following fiscal year. Can you make additional Contributions to the Plan? You may make voluntary contributions to the Plan. A voluntary contribution is a contribution that you choose to make in addition to Member Required Contributions under the Plan. Voluntary contributions are not subject to Locking-in rules and do no affect the amount the Company contributes. Can you transfer from other plans? You may transfer contributions from your previous employer or from a personal registered retirement savings plan, to your voluntary account under the Plan. In the event that any portion of the transferred amount was designated as Locked-in, it will continue to be Locked-in under this Plan in accordance with the requirements of Applicable Legislation to which it is subject and will be used only to provide you with retirement benefits. Your investment funds, your way You can choose how your pension account is invested from among the proposed investment options. Your pension account will reflect the actual investment performance of all the funds you choose. Funding of Benefits The Company offers you, through Desjardins, a range of investment options. The Company has considered the following criteria in the selection of investment options available under this Plan: the degree of diversification among the investment options available; the liquidity of the investment options; and the level of risk associated with the investment options. The funds paid to your accounts are deposited in trust for you in accordance with Applicable Legislation and kept separate and apart from the Company's own money. What happens if you don t give investment instructions? If Desjardins does not receive any investment instructions from you, we will invest your contributions in the default fund selected by your Company, which is the BlackRock LifePath based on an assumed retirement age of 65. You may change your investment instructions at any time. We recommend that you review your investments once a year or as a major life event occurs, like a purchase of a house or a birth of a child, to make sure your investment choices reflect your situation. Consider obtaining investment advice from a qualified investment advisor to help you make appropriate investment decisions, according to your investor profile. The Desjardins Customer Contact Centre can help you determine your investor profile and provide further guidance regarding your investment options and decision-making tools available to you. You are responsible for using the information provided by the Company and Desjardins to assist you in making your investment decisions. Your plan, your way G Saskatchewan Blue Cross Page 2

3 You can also transfer from one investment option to another that is offered under the Plan. Desjardins does not charge a fee for these transfers. However, there may be a market value adjustment applied to any transfer or surrender from the guaranteed funds prior to maturity of an investment term. How much can you contribution in a taxation year? Your required and voluntary contributions are deductible for income tax purposes. However, the overall maximum amount of contributions, including the Company Required Contributions, made to your accounts during a fiscal year, are subject to the limits prescribed under the Income Tax Act (Canada). Can you make withdrawals at any time? When can you retire? Three retirement dates are available to you: 1. Normal retirement date: Your normal retirement date will be the first day of the month coincident with or next following the attainment of age Early retirement date: You may take an early retirement on the first day of any month after you attain age Postponed retirement date: You may defer your retirement beyond your normal retirement date and retire on the last day of any month thereafter, but your monthly pension must commence no later than the last day of the calendar year in which you reach age 71. You will not be permitted to withdraw contributions made to the Plan while you continue to be an Employee. What happens to contributions during a leave of absence? You remain a Member during a leave of absence authorized by the Company. During a maternity, parental leave or other authorized personal leave without pay all contributions cease, however, you can elect to continue contributions to the Plan by either paying your Member Required, Company Required and/or Voluntary contributions. If you choose to contribute to the Plan, contributions required under the Plan continue to be made based on a Prescribed Amount in accordance with the Plan s contribution formula. During any unauthorized leave, all contributions to the Plan cease to be made. What happens to contributions while disabled? While on sick leave or receiving Short-Term Disability benefits, Member and Company Required Contributions will continue based on the Earnings you receive. You are not required to contribute to the Plan if you are receiving Long-Term Disability (LTD) benefits from your Company s LTD Plan. While you are receiving LTD benefits, you may however, elect to continue your Member Contributions. The Company Required Contributions will continue to be made while you are receiving LTD benefits, based on a Prescribed Amount in accordance with the Plan s contribution formula. What happens when you retire? The amount of retirement income you receive will depend on the accumulated value of the total contributions made to your accounts. Voluntary Benefit Upon retirement you may elect to receive a lump sum payment of that portion of your Member Account that is attributed to voluntary contributions, prior to the pension amount being determined. What are your Retirement Options? Using the balance in your account, you can: transfer to a Lock-in Retirement Account (LIRA) buy a Life Annuity from an insurance company leave your balance in the Plan to be transferred at a later date Transfer to a Locked-In Retirement Account (LIRA) You may transfer your benefit to a LIRA. A LIRA is an investment account in which you can keep your money invested. You cannot make withdrawals from your LIRA. You must transfer your LIRA to a Prescribed RRIF, or use it to purchase a Life Annuity before December 31 of the year in which you turn 71. Your plan, your way G Saskatchewan Blue Cross Page 3

4 Buying a Life Annuity A Life Annuity is a lifetime pension purchased through a contract with an insurance company. You receive monthly payments, the amount of which will vary depending on the type of annuity you select, the interest rates in effect when you sign the contract, and your age and your Spouse s age when the annuity payments begin. The higher the interest rates and the older you are when payments begin, the higher the pension you will receive. Leave Your Balance in the Plan You may leave your balance in the Plan to be transferred at a later date. You must transfer your balance to a Locked-in Retirement Account (LIRA), or use it to purchase a Life Annuity before December 31 of the year in which you turn 71. Normal Forms of Retirement Benefits Member without a Spouse Commencing on the date you retire, your pension is payable monthly for life. Should you die before 120 monthly pension payments have been made, the remaining payments will be paid to your beneficiary. If you do not have a designated beneficiary, the total amount of the remaining payments is paid to your estate in a taxable lump sum. Member with a Spouse Commencing on the date you retire, your pension is payable during your lifetime and the lifetime of your Spouse. Following your death, the monthly pension will be reduced to an amount corresponding to 60% of the monthly pension you received prior to your death. Optional Forms of Retirement Benefits Member without a Spouse Instead of receiving a pension for a Member without a Spouse as previously described, by giving written notice to the Administrator prior to the commencement of your retirement benefit, you may elect to receive any other type of approved retirement benefit based on your own life. You may choose a life annuity with a different guarantee period or you may choose to transfer your retirement benefit to a Lock-in Retirement Account (LIRA). Instead of receiving a pension for a Member with a Spouse as previously described, by giving written notice to the Administrator prior to the commencement of your pension benefit, you may elect to receive any other type of approved pension. Other types of approved pensions include the pension for a Member without a Spouse described previously; life annuities with guaranteed periods different from this form of annuity or you may choose to transfer your retirement benefit to a Locked-in Retirement Account (LIRA). In accordance with the Applicable Legislation, if you wish to elect a pension benefit which provides your Spouse with a survivor pension that is less than 60% of the pension you received prior to your death, your Spouse must sign a waiver form prescribed under Applicable Legislation prior to the date your retirement benefit is to commence. Disability Benefit If you become totally and permanently disabled, and are so certified by a medical doctor licensed to practice under the laws of a province of Canada, you shall receive, at your normal retirement date, a retirement benefit as outlined in the options noted above or if you can provide medical evidence to support a diminished life expectancy for a person of your age and sex, a lump sum settlement may be made in lieu of any pension and other benefits under the Plan. Small Benefit If the annual amount of the benefit payable, excluding your voluntary account, is less than 20% of the YMPE in effect in the year of payment, the value of your benefit will be paid in a taxable lump sum or may be transferred to a registered plan according to the provisions of the Income Tax Act. Voluntary Contributions and Transfers from Other Plans The benefits arising from your voluntary contributions and transfers from other plans, if any, are described in the "Voluntary Contributions and Transfer Benefits" section of this document. Member with a Spouse Your plan, your way G Saskatchewan Blue Cross Page 4

5 What happens if your employment ends? Upon termination of employment with the Company, you will be entitled to a benefit that will include the Company's contributions and such benefit will be Locked-in or not Locked-in according to Applicable Legislation and Plan provisions. Member and Company Required Contributions are vested immediately. The Member and Company Required Contributions are locked-in upon the earlier of the completion of two years continuous employment, attainment of normal retirement age or termination of the Plan. Amount of the Termination of Employment Benefit Your termination of employment benefit will be equal to the following: a) Non-Locked-in Benefit A cash payment corresponding to the accumulated value of the Member and Company Required Contributions. b) Locked-in Benefit You are entitled to a deferred annuity that can be purchased with the accumulated value of the contributions in your accounts as at the date of your termination of employment. You may also transfer the accumulated value of such contributions to another registered pension plan, to an insurer in order to purchase a life annuity or to a Locked-in Retirement Account (LIRA). However, if the annual amount of pension payable, excluding your voluntary account, is less than 20% of the YMPE in effect in the year of payment, the value of your benefit will be paid in a taxable lump sum or may be transferred to a registered plan according to the provisions of the Income Tax Act. You may decide to leave your termination of employment benefit in the Plan. In this case, your account balance will continue to be invested according to your instructions. The benefits arising from your voluntary contributions and transfers from other plans, if any, are described in the "Voluntary Contributions and Transfer Benefits" section of this document. What happens upon your death? Death Benefit before you retire If the event of your death before retirement and prior to purchasing an annuity, your death benefit will be paid in accordance with the following: Beneficiary If you have a Spouse, the death benefit will be paid to your Spouse. If you do not have a Spouse, the death benefit will be paid to your designated beneficiary or, if you do not have a designated beneficiary, to your estate. Upon completion of a written declaration, your spouse may waive the death benefit prior to retirement. In such a case, the death benefit is payable to your designated beneficiary or, if you do not have a designated beneficiary, to your estate. Amount of the Death Benefit The amount of the death benefit will correspond to the accumulated value of your Required Contributions and the Company's Required Contributions in your accounts as at your date of death. Payment of the Death Benefit A death benefit is payable as a lump sum to your beneficiary or estate, as applicable. However, if you have a Spouse at the date of death, your Spouse will be required to transfer the death benefit as follows: a) to an insurer in order to purchase a life annuity, b) to another registered pension plan, c) to an RRSP, or d) to a LIRA. Death Benefit after you retire If you die after retirement, the benefit will depend on the option you elected at retirement and whether the beneficiary is your Spouse or not. The benefits arising from your voluntary contributions and transfers from other plans, if any, are described in the "Voluntary Contributions and Transfer Benefits" section of this document. Your plan, your way G Saskatchewan Blue Cross Page 5

6 Voluntary Contributions and Transfer Benefits Upon your termination of employment, retirement or death, you or your beneficiary will be entitled to receive a benefit arising from the accumulated value of your voluntary contributions and transfers from other plans. Such benefit may be paid in a lump sum, used to increase the amount of your pension, transferred to another registered plan, or used to purchase an annuity. However, if any portion of the benefit related to a transfer from other plans is designated as Lockedin, such a portion will only be payable in the form of a transfer to a Locked-in instrument. Plan Administration and Information Explanation and Disclosure Within six (6) months after the end of each Plan year you will receive a statement showing the amount of your retirement benefit accrued at the statement date and any other information prescribed under the Applicable Legislation. You or your Spouse may, once a year, personally or by an agent authorized in writing, examine the Plan documents. These documents are: annual information returns; financial statements of the Plan, including Plan expenses; Plan text; Plan amendments; and statement of investment policies and procedures. In the case of termination of employment, death, retirement, or in case the Plan itself terminates, the Administrator will provide you and your Spouse, if applicable, within 90 days or less, a written statement of any benefits you are entitled to. If the Plan is amended, the Administrator will provide you with a notice describing the amendment. Termination of the Plan The Company hopes and expects to continue the Plan indefinitely but reserves the right to discontinue the Plan in whole or in part at any time. This will not affect your rights to benefits accrued to the date of the Plan termination. Upon a full or partial termination of the Plan, your benefit will be fully vested regardless of your age and the number of your years of participation under the Plan. The options on retirement or termination of employment, as the case may be, previously described in this document will be available to you. Beneficiary Designation When you enrol in the Plan, you may designate a beneficiary to receive the death benefit payable under the Plan. Regardless of who your beneficiary is, you may make such a beneficiary either revocable or non revocable. Revocable means you can change your beneficiary at any time without his or her consent. Irrevocable means you cannot change your beneficiary without his or her consent. To the extent permitted by Applicable Legislation, you may alter or revoke the prior appointment of your beneficiary (as designated on your enrolment form) by written notice to the Administrator. What happens in the event of a Marriage Breakdown or Ending of a Common-Law Relationship? In accordance with the Applicable Legislation, the benefits you have accrued under the Plan during your marriage or common-law relationship are subject to division upon marriage breakdown or the ending of a common-law relationship. In such a circumstance, the Administrator must issue a written statement that will provide information on the amount that may be payable to your Spouse as well as the options available for the settlement of his/her benefit. Assignment of Benefits Except for the distribution of the value of a pension benefit in the event of a divorce or annulment, or pursuant to a written separation agreement, the benefits under this Plan may not be assigned, charged, anticipated or given as security. Fees You will pay Management & Administrative fees as well as Investment and operating fees. Management fees are the amount you pay for the management and administration of your pooled funds. Investment & Operating fees are variable depending on the Fund Manager. For more information about fees please refer to the Your investment funds, your way document, your personal on-line account or your statement. Your plan, your way G Saskatchewan Blue Cross Page 6

7 Plan Definitions The following are definitions of terms used in this document. Administrator The Company. Applicable Legislation The Saskatchewan Pension Benefits Act, 1992 and the Income Tax Act (Canada). Company Medical Services Incorporated, a body incorporated under the laws of the Province of Saskatchewan and operating as Saskatchewan Blue Cross. Disability A physical or mental impairment that prevents you from performing the duties of the employment in which you were engaged before the commencement of the impairment. A total and permanent Disability is a physical or mental impairment, resulting from an illness or accident, which prevents you from holding any remunerative employment for which you are reasonably qualified by your education, training or experience and which shall likely continue until your death. A medical doctor licensed to practice in Canada must certify the Disability in writing. Earnings Basic salary earned but excludes overtime, shift differential, bonuses and allowances. Effective Date of the Plan January 1, Employee A person who is employed by the Company. Locked-in or Locking-in Refers to Member Required Contributions and Company Required Contributions under the Plan which may not be taken in cash and must ultimately be used to provide retirement income to you and your Spouse, if applicable. Member An Employee or former Employee who joined the Plan in accordance with the Plan eligibility and membership rules and who remains entitled to any benefit under Plan The Saskatchewan Blue Cross Employee Pension Plan. Prescribed Amount An amount, as defined in the Income Tax Act (Canada), under which contributions may be made to the Plan during a non-remunerated leave of absence. Required Contribution Contributions made to the Fund as required by the Plan. Spouse a) A person to whom the Member is legally married; or b) A person who has been cohabiting continuously with the Member as his or her spouse for at least one year before the relevant time and who is still cohabitating with the Member at the relevant time. Vested Your entitlement to the accumulated value of the Company s Required Contributions made on your behalf. YMPE The Year s Maximum Pensionable Earnings as set out under the Canada Pension Plan. Your plan, your way G Saskatchewan Blue Cross Page 7

8 Desjardins Annuity Guarantee In accordance with the contract entered into with your Company, Desjardins Financial Security Life Assurance Company guarantees you a minimum annual annuity based on the value of your investments. For information about the exact terms and conditions of this guarantee, consult the applicable policy extracts on our website under ''Access forms and documents'' from ''Your transactions'' menu, or request a copy from our Customer Contact Centre at Stay in touch with your account and Desjardins Financial Security Visit the participant website at Review "Your Statement". Call our Customer Contact Centre at us at grouppension@dfs.ca. Fax us at This overview describes the Plan. It is intended as a summary only. Full details are set out in the relevant legal Plan documents. You can review these documents by contacting the Company. In the event of any discrepancy, benefits will be paid according to the terms of these legal documents and applicable legislation. Your plan, your way G Saskatchewan Blue Cross Page 8