We will continue to monitor this subject. Watch for future issues of this Pension Matters newsletter for more updates.

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1 Issue 10 December 2015 Are you interested in learning more about what s happening with the ESA Pension Plan? This newsletter is a great source of information on our Pension Plan as well as the Canadian pension and retirement landscape in general. Pensions in Canada The Ontario Retirement Pension Plan (ORPP) - An Update The Ontario government continues to move forward with the implementation of the ORPP, to be effective January 1, The basic provisions of the ORPP and the creation of the ORPP Administrative Corporation have now been set out in legislation. However, many details related to coverage and timing of the ORPP have yet to be confirmed. Key Facts About the ORPP The ORPP comes into effect on January 1, 2017, with benefit payments begin in The ORPP will not apply to Ontario employees currently participating in a comparable workplace pension plan. The Ministry of Finance is defining a comparable pension plan as a pension plan that: - provides members with a predictable stream of income for life, - provides members with security (i.e. they won t outlive their savings), - requires contributions from employers to ensure fairness, and - aims to replace up to 15% of a person s pre-retirement income. The ESA Pension Plan will be considered a comparable plan and therefore, all Plan members should be exempt from the ORPP. ESA temporary and seasonal employees who are not members of the ESA Pension Plan would be covered by the ORPP, providing they fall within the ORPP age and earnings thresholds outlined below. Because the ESA has a comparable plan, participation in the ORPP will commence in Participation will be mandatory for Ontario employees not covered under a comparable workplace pension plan, providing they are age 18 to 70. Participating employers and employees will each contribute 1.9% of covered annual earnings up to $90,000. The target retirement benefit from the ORPP is 15% of earnings, after 40 years of participation. We will continue to monitor this subject. Watch for future issues of this Pension Matters newsletter for more updates. To learn more about the ORPP, please visit 1

2 Behind the Scenes Your ESA Pension ESA Pension Plan Financial Position Each year our Plan Actuary conducts an actuarial valuation of our Pension Plan, assessing the financial status of the Plan. The following summarizes the results of our 2015 actuarial valuation as at January 1, Key Facts from our 2015 Going Concern Actuarial Valuation January 1, 2014 January 1, 2015 Total Assets $255.4 million $282.4 million Total Accrued Liabilities $287.6 million $304.4 million Funding Deficit $32.2 million $22.0 million Deficit Decrease 2014 to 2015 $10.2 million Contributions 2014 ESA Contributions Member Contributions Gain Sharing Payments $11.3 million $3.2 million $1.3 million The funded position of the Pension Plan improved over This improvement was primarily the result of the positive investment returns in our pension fund as well as additional contributions made by ESA and the gain sharing payments. The investment environment for the latter half of 2015 is experiencing significant volatility. These swings in the market will be reflected in the January 1, 2016 valuation. ESA Pension Plan Membership Demographics The following table provides an overview of the membership demographics of the ESA Pension Plan as of January 1, Demographic Overview as at January 1, 2015 Active and disabled members: Number 461 Average age 49.1 years Average credited service 11.5 years Deferred members: Number 19 Average age 54.4 years Average lifetime annual pension $12,601 Pensioners and surviving spouses Number 292 Average age 71.9 years Average lifetime annual pension $35,978 2

3 Pensioner Portal Website Coming Soon! We have heard from many ESA retirees about gaining access to current pension and benefits information, at their convenience. In response, we are excited to launch our new Pensioner Portal Website in early 2016! Through this new site, ESA pensioners will have access to current pension and benefits information at their fingertips. Access to the website will be linked to the esasafe.com webpage where users will be registered to the secure site. Stay tuned in early 2016 for more details about the launch of our new Pensioner Self- Service Website! A Spotlight on a Recent ESA Retiree Jim Thomsen Jim Thomsen joined ESA in He spent the next 22 years working with us as an Inspector and Senior Inspector, until he retired in We recently reached out to Jim to talk to him about his retirement experience. Here are Jim s responses to some of the questions we asked. Question: Jim, when did you start thinking about retirement? The day after I started working. It s important to have a plan and to start thinking about what retirement means to you, well in advance of your actual retirement date. Question: How did you plan for retirement? Many years ago, I picked a date that I thought I would be able to retire and still maintain my standard of living. I researched on the internet to determine how much retirement income I would need to live comfortably, without having to make any major changes to my lifestyle. Then I created a plan, including a list of my retirement goals and dates for completion of each goal. I also supplemented my retirement savings by opening a personal RRSP and investing a little money each month. If you start young, it can really add up! Jim Thomsen enjoying retirement I also spoke to other ESA retirees that I knew to see if I could learn anything from their experiences. I was particularly interested in how they adjusted from a full-time job to having so much extra time in retirement. Some of the people I talked to were happy to just have more time at home for themselves and their families. Others found that they needed to find something more to do with their new-found freedom. Some people I talked to, fill their time by giving back to their community through volunteer activities or by joining a service club. Question: What internal support at ESA did you use to help with your retirement planning? I attended an ESA seminar offered to future retirees. The seminar was very helpful and it gave me the opportunity to ask questions directly to the experts. The online pension estimator tool is also a super tool to help with retirement planning and understanding what your future retirement income will be. You can run as many retirement estimates as you like, at any dates you choose. Question: How did you find the ESA retirement process? The retirement process at ESA is great and Terri Hughes was very helpful! There were a lot of decisions to make and a number of different payments options to choose from. Terri walked me and my spouse, Deb, through the whole process, step by step. She carefully explained all the options available to me, the decisions I had to make and she answered all our questions. Question: Do you have any advice for ESA employees considering retiring? Make sure that your spouse (or significant other) is OK with your decisions and involve them in the process. Discuss all your options with them so they understand what the future holds. Be sure to carefully consider all your options, determine if you need to alter your lifestyle, and take charge of your finances. 3

4 Your Pension Support & Resources Remember, there are a number of great resources and tools available to help you learn more about the ESA Pension Plan and find answers to your questions. Your Benefits Resources pension website Human Resources Department contact Terri Hughes at (905) or terri.hughes@electricalsafety.on.ca. ESA Pension Information Centre call , 8:30 AM to 5:00 PM, EST, Monday Friday. Pension Indexing 2016 Answering Your Questions How do I get a copy of my pension statement? You can find your most recent personal pension statement on the Your Benefits Resources pension website. Effective January 1, 2016, all ESA retirees will receive a 1.0% increase in their monthly pension. All active members of the ESA Pension Plan can access the Your Benefits Resources pension website at or you can access it by going into the ESA Intranet>Human Resources>Pension Information>Pension Website. You ll need your Employee Number and PIN to login. If you can t remember your PIN, just click on I Don t Remember My PIN and a new PIN will be ed to you at your ESA address. Login here Using your Employee Number and PIN. Forgot your PIN? Click here and a new PIN will be ed to you. 4

5 Once you have logged in, click on Pension Statement 2014 in the Your Secure Mailbox section. Welcome John Doe Click here to open your secure mailbox On the Your Secure Mailbox screen, click on the attachment icon and your most recent pension statement will open in PDF format. You can then print it or save it as required. Click here to open your pension statement Your most recent pension statement will open in PDF format. On this site you will also find a variety of useful information on the ESA Pension Plan, including information on how the Plan works, what pension benefits you are entitled to, and, if you are thinking about retiring, you can run as many pension estimates as you like. Your Feedback is Important! Pension Matters is designed to answer your questions and address the pension topics that matter most to you. If you have questions, feedback or ideas for future topics, we want to hear from you! Simply click here to send an to the Pension Matters mailbox. This newsletter does not create or confer any contractual or other rights. All rights and obligations with respect to the ESA Pension Plan will be governed solely by the official Plan documents, applicable pension legislation and the Canada Revenue Agency. If there are any discrepancies between this newsletter and the formal Plan provisions, the terms of the Plan and any legislated requirements will apply in all cases. 5