COMPENSATION, WAGES, BENEFITS

Transcription

1 Exhibit C Tab Schedule Page of 0 COMPENSATION, WAGES, BENEFITS.0 INTRODUCTION In earlier Distribution and Transmission decisions, the Board has expressed concerns regarding the size and growth of compensation at Hydro One. Hydro One understands these concerns and appropriate measures have been taken, where possible, to reduce compensation related items. The fact remains, though, that Hydro One employs a highly skilled workforce and coupled with an aging workforce and world wide demand for similar skills, compensation at Hydro One is appropriate and reasonable. Ultimately, the rate payers benefit from the quality, expertise and reliability of Hydro One employees. The two primary human resource issues at Hydro One are appropriate compensation levels and ensuring the right skills and mix of staff are available in the short and long term. The overall compensation package at Hydro One is a product of historical factors as well as current and future challenges. Hydro One is heavily unionized and the work force is comprised of highly skilled and trained employees. With the de-merger of Ontario Hydro in, Hydro One inherited collective agreements that already established terms and conditions of employment for represented employees. Since its formation, Hydro One has a history of managing collective bargaining in an effective manner by balancing the needs to reduce costs, increase productivity and settling collective agreements which the unions can support and ratify with its membership. Compensation at Hydro One is appropriate and reasonable given this history and context in which the Company operates.

2 Exhibit C Tab Schedule Page of 0.0 THE UNIONIZED ENVIRONMENT Approximately 0 % of the work force is unionized. By law, Hydro One must negotiate collective agreements with each of its bargaining agents. The collective agreements establish the terms and conditions of the employment relationship for a fixed period of time. Typical terms of the collective agreement include wages, benefits, vacation, hours of work, contracting out, grievance and arbitration procedure etc. It is noteworthy to highlight that Hydro One inherited collective agreements from Ontario Hydro which had already established many of these terms of employment. It is only through the bargaining process that these terms of employment could be altered. The ability of an employer in an unionized environment to successfully reduce compensation and benefits is limited. Organizations like Stelco Inc., Air Canada or the major North American auto manufacturers have negotiated some concessions but only when faced with bankruptcy protection or plant closures. Collective Agreements are legally enforceable contracts. In labour agreements, more so than commercial contracts, parties to this type of contract must also consider their longer term relationship. Hydro One practices sound and prudent labour relations by negotiating fair and reasonable collective agreements to foster and promote healthy union management relationships. Ultimately, the rate payer is a beneficiary of this relationship in the form of higher productivity and uninterrupted supply of power..0 LABOUR AGREEMENTS Hydro One has collective agreements with the Power Workers Union (PWU), The Society of Energy Professionals (The Society), the Canadian Union of Skilled Workers (CUSW), the Labourer s International Union of North America ( LIUNA) and each of the

3 Exhibit C Tab Schedule Page of 0 Building Trade Unions (BTU s) (via EPSCA). The key agreements are with the PWU and the Society. Hydro One s relationship with the PWU goes back to with the formation of the Employee s Association of Ontario Hydro. The PWU represent over 000 employees primarily in the successor companies to Ontario Hydro and other utilities in the Province. The PWU represent over 0% of Hydro One employees. The PWU is an industrial union that represents the trades, operators, technicians and clerical workers. They perform line work, forestry, electrical, mechanical, protection and control, meter reading, stock keeping, system operation, technical and clerical/administrative work. The majority of the PWU-represented employees in Hydro One have post-secondary education, predominately at the community college level. These include Hydro One electrical maintainers, line maintainers, mechanical maintainers, operators, technicians and administrative employees. Hydro One s relationship with the Society goes back over 0 years. Until, the Society represented various professional staff on a voluntary basis. In, Ontario Hydro voluntary recognized the Society as the legal bargaining agent for engineers, technical, administrative and supervisory staff. The first collective agreement was negotiated in. Society represented staff perform engineering, high level technical and administrative work as well as supervisory functions. The majority of the Society-represented employees in Hydro One have either post-secondary education (university degrees) and/or post-graduate education. These include graduate engineers, finance and telecommunication specialists.

4 Exhibit C Tab Schedule Page of 0 It is often perceived that unions are associated with high salaries, superior benefits and impeding management from being efficient. Hydro One s human resource philosophy is to work cooperatively and reasonably with all of its bargaining agents to ensure employee engagement is maximized while achieving business objectives. Input is sought from both bargaining agents and employees to develop ongoing programs and methods of reducing costs and increasing productivity. As in any union-management relationship, from time to time, the parties have disputes. Overall, Hydro One s relationships with all the bargaining agents can be described as mature and business like. The fact that Hydro One has made progress in both cost reduction and increased flexibility with its represented groups is an indicator of a positive and productive relationship. By operating in this manner, unionization at Hydro One can act as a positive influence for both the Hydro One and the ratepayer. It is also believed that unions have an impact on non represented staff by putting upward pressure on compensation and benefits. Historically, this may have been true at Ontario Hydro where it was stated policy that non represented staff would be treated as good or better than represented staff. As an example, non represented salaries were generally adjusted in line with increases negotiated with the bargaining agents. At Hydro One, compensation and benefits afforded to non represented staff are not impacted by negotiations with represented staff..0 COLLECTIVE BARGAINING With the break up of Ontario Hydro in, Hydro One inherited collective agreements with established terms and conditions. Since this time, Hydro One has been able to negotiate collective agreements that meet our business needs. Progress has been made in terms of reducing employee related costs and increasing flexibility.

5 Exhibit C Tab Schedule Page of 0. PWU The PWU contract has been reduced in size and complexity since it was inherited from Ontario Hydro in in order to provide Management with the flexibility to direct and effectively utilize the workforce. However, wage rates, pension entitlements, and benefit coverage are prescribed and can be changed only through negotiations. Compensation of PWU-represented employees is negotiated through the collective bargaining process. An aging workforce in technical and trades positions in the utility industry is likely to limit the supply of skilled staff in the future, putting upward pressure on wages. The common view is that an attempt by Hydro One to achieve significant cost reductions in wages, benefits and pension would likely result in a strike. The last PWU strike was in and lasted days. It was handled by placing management and Society-represented staff in key functions to maintain operations/service to the extent possible. However, as a result of numerous downsizing programs, and reorganization of work, there are far fewer management staff available today with the requisite skills and experience to occupy key PWU positions during a strike. Furthermore, unlike other industry s, Hydro One does not have a product that can be stockpiled. As a result, the Company would be unable to continue operations for a sustained period of time during a PWU strike. Rather than risk jeopardizing the supply of reliable electricity, the key focus with respect to the PWU has been to achieve increased management flexibility to run the operations, as opposed to wide scale reductions in wages, benefits and pensions.. SOCIETY The Society had mandatory mediation/arbitration since the formation of Hydro One until 00. Mandatory arbitration is another legacy issue, that entrenched terms and

6 Exhibit C Tab Schedule Page of 0 conditions into Society collective agreements that were inherited by Hydro One. Interest arbitrators are generally reluctant to award cost concessions. Recently, the C.D. Howe Institute issued a study that examined the impact on wages when declaring a service an essential service. [] Services that are deemed essential service do not have the ability to strike. Collective bargaining disputes are resolved using mandatory interest arbitration. This study concluded that essential service designation resulted in higher wage increases than would otherwise have occurred in traditional collective bargaining. Hydro One ended mandatory arbitration commencing with the 00 collective bargaining. The resultant settlement is more responsive to achieving compensation related cost reductions. Hydro One s goal is to compensate Society-represented staff at levels competitive in the market place in order to maintain the ability to attract, motivate and retain competent staff. For the utility industry, an aging workforce within operations management and specialist engineering positions is likely to limit the supply of skilled employees in the coming years, putting upward pressure on compensation. In establishing rates for Society-represented staff, Hydro One considers the average industrial wage settlements, Consumer Price Index, and survey results from the Ontario Society of Professional Engineers. This survey is used as a major data source since engineers are the single biggest classification within the Society. As an employer, Hydro One focuses on the marketplace more than on inflation. Hydro One s goal is to occupy a position in that marketplace in order to attract, motivate and retain the kind of talent required in the organization. Mandatory mediation/interest arbitration was eliminated prior to 00 collective bargaining. In the first set of negotiations without this dispute resolution tool, the Society [] The C.D.. Howe Institute. No Free ride:the Cost of Essential Services Designation Benjamin Dachis 00.

7 Exhibit C Tab Schedule Page of initiated a -week strike. The strike was primarily in response to Hydro One s desire to reduce wages and benefits and increase hours of work for new employees. Hydro One was requested by the Shareholder to enter into mediation arbitration to end the strike. The resulting arbitration award did result in some cost savings for future hires, highlighted with less costly pension provisions for new Society employees..0 OVERVIEW OF HYDRO ONE NEGOTIATIONS Collective bargaining is not a precise science. For every gain/concession in collective bargaining, there is not an exact corresponding gain/concession given. Rather, the aim of collective bargaining is for the bargainers to strike a balance so both parties feel their objectives have been satisfied and that overall, both parties can recommend to their constituents that the deal should be approved. The following tables highlight the significant changes achieved for PWU and Society negotiations since 00. Table PWU Negotiations Term April, 00 March, 00 Changes Modified Staff Reduction clause to allow for easier staff reduction Shortened the winter meal period by two months plus Summer student rates reduced to $ and $ per hour. List of province-wide automatic Purchase Service Agreements New Hiring Hall classification of General Helper at $. per hour. Renewed ability to have Lines staff on nd shift Agreement to allow Career Edge placements (develop skills for university /College students)

8 Exhibit C Tab Schedule Page of Term Changes April, 00 March, 00 New Temporary Work Headquarters process featuring travel allowances in place of Hydro vehicles, hotels and meals April, 00 March, 00 Generic Change of Employer clause to facilitate movement of employees from Hydro One to Inergi and future similar situations. Retain temporary employees for months (previously months) and months with Chief Steward agreement. 0% of Training Instructors can be temporary instead of regular. Made Linesperson second shift permanently available. New lower cost Meter Reader B classification Ability to invoke streamlined staff reduction process Can rehire Meter Reader B at lower rate without a -month break in service. PWU to provide Management with a list of Hiring Hall Meter Readers for direct call out to work by Management. Continue temporary work headquarters provisions. CMS shift work provisions continued at mid-term agreement rates. On-call established for Helicopter Pilots and Air Engineers. Joint team to review health and dental costs with the goal of finding ways to reduce the total cost. April, 00-March, 00 March, 00-March, 0 Eliminated the PWU annual incentive plan that would have paid up to % of base pay per year. Established a new three-day weekend shift in Lines. Established a new lower-paid Switching agent classification and midnight shift. Established full afternoon shift for Fleet Mechanics. Greater flexibility to employ University and College students Security clearances for new hires Pre hire assessment tool for apprentices

9 Exhibit C Tab Schedule Page of Term January, 00-December, 00 January, 00- March st 00 April, 00 March,00 (arbitrated settlement) April, 00 March, 0 (early negotiations) Table Society Negotiations Changes Generic Change of Employer clause to facilitate movement of employees from Hydro One to Inergi and future similar situations Reduction in temporary travel expenses upon a paid move Reduction in sick leave benefit Reduction in benefits Greater flexibility to extend temporary employees Incentive Pay not renewed Interest Arbitration not extended Increase ability to use shift workers New pension plan % less expensive Managements Rights Clause Elimination of % Performance Pay Upper end of salary schedules reduced New lower hiring rates Jurisdiction, Dependent Contractor, Contracting Out grievances withdrawn Contracting Out language suspended to provide greater flexibility to contract out work Security Clearances introduced for new hires Management Compensation Plan (MCP) In January 00, Hydro One introduced revised pension and benefit plans for new MCP staff hired. These new plans are approximately % less costly than the previous plans. In addition, in 00 all MCP staff had extra weekly hours added to their base hours of work..0 COMPENSATION STRATEGY Hydro One has experienced rapidly increasing transmission and distribution work programs since 00. Resourcing of these work programs must occur on the most cost effective basis possible within a highly competitive labour market.

10 Exhibit C Tab Schedule Page of Table provides a snapshot of year end compensation costs for Hydro One Networks (Transmission and Distribution) from 00 to 0. The Company believes that the upward trend in these costs is reasonable in light of the steadily increasing transmission and distribution work programs since 00, as well as the negotiated increases in labour rates. Table Year End Hydro One Networks Inc Payroll* (M$) ( Tx and DX) 0 Hydro One Networks Inc. Payroll* (M$) Year Total Wages Base Overtime Incentive Other** * This payroll reflects compensation costs associated with year-end headcounts for all EPSCA, PWU, Society and MCP Transmission and Distribution staff. ** Other includes travel time, vacation bonus, unused vacation days paid out, standby allowance, shift allowance, vacation pay on termination. Table does not reflect the revenue requirement for compensation for this Application. For the period 00-0, the total Networks (Transmission and Distribution) work program is expected to increase by over 0% whereas the regular staff increase is expected to increase by approximately %. Operating within a competitive labour market, Hydro One has faced, and continues to face, a number of challenges with respect to the establishment and maintenance of a more favourable cost structure. Most notably, more than 0% of the workforce is unionized, and came to Hydro One with pre-existing collective agreements. As noted earlier, because 0% of the workforce is represented by a single union, the PWU, the

11 Exhibit C Tab Schedule Page of 0 Corporation would be unable to continue operations in the event of a work stoppage by that union of any significant duration. Consequently, the focus in collective bargaining with the PWU has been on increasing productivity and on reducing staff levels relative to the work program, rather than on seeking compensation concessions. With respect to collective bargaining with the Society of Energy Professionals of Ontario ( Society ), Hydro One s view is that our goal of reducing overall wages, pension and benefits for future new hires reflects a reasonable balance between the need to attract and retain new staff while pursuing a more favourable cost structure. This is a difficult balance to achieve too much of a reduction in compensation and benefits will impact our ability to attract the new skills necessary to replenish our workforce. Following the Ontario Hydro demerger, Hydro One introduced a new MCP, which included base salary, benefits and variable pay. The MCP is designed around a structure comprised of broad band levels. Compensation adjustments are made as deemed necessary to attract, motivate and retain competent staff. The advantage of such a system is that it reduces the number of pay layers, simplifies administration, and provides increased opportunity for employees to progress as they gain skills and experience, without the frequent need to change positions. Each management position is assigned to a salary band according to the accountabilities, size and complexity of the job. Base salary within the pay band depends upon individual expertise relative to the requirements of the job. Base salary is reviewed annually. Hydro One establishes reference positions using Hay Methodology. All Hydro One MCP jobs are rated against these reference positions for scope and complexity. Base salary adjustments for MCP staff are tightly managed and have never been applied as across-the-board economic increases, but rather to reflect improved competency in a

12 Exhibit C Tab Schedule Page of 0 job. In 00 and 00, the Human Resources and Public Policy Committee of the Board made available.% and.% of base salary for increases. Base salary increases for 00 and 0 are projected to be.0%. The variable pay concept is another key component of the management compensation strategy. Each of the broad base salary bands has a maximum variable pay range associated with it. These maximums are percentages of the individual s base salary, and have been determined through an assessment of compensation practices in the target market. The program provides an incentive payment, based on an employee s performance against a specific set of annual performance criteria and factors in corporate performance. The incentive is re-earnable every year, so it is not built into the employee s ongoing compensation. In a year where performance is very strong, the incentive will be at the high end of the range. In years where performance is not as strong, a reduced incentive, or no incentive pay, will be provided. The re-earnable aspect of the program reflects a best practice approach since it minimizes the long-term compensation costs and allocates pay based solely on performance. It is important from an employee attraction, motivation and retention perspective that the management bands be competitive with the external market and that internal relativities be maintained. The compensation strategy for MCP is that Hydro One would target total cash compensation at the th percentile of the target market comparator group, which is the Hay All Industrial Component. The organizations in this study represent corporations which are in the electricity sector or related fields and with which we compete for talent. Hydro One s best performers are highly marketable, and several management staff have left the company in recent years. The Hydro One succession plan has facilitated internal

13 Exhibit C Tab Schedule Page of 0 promotion and a smooth transition in most cases, but our internal replacement capacity is now significantly diminished in key areas. External recruitment has proved challenging as our compensation levels and structures have fallen below the market for top people..0 COMPENSATION BENCHMARKING STUDY Hydro One has undertaken an independent benchmarking study on total compensation and productivity relative to the market in response to the Board s directive in the EB Decision With Reasons. Hydro One issued a Request for Proposal and ultimately engaged Mercer Canada Limited to conduct the total compensation benchmarking. Mercer subcontracted Oliver Wyman (a unit of Oliver Wyman Group) to conduct the productivity benchmarking study. The resulting benchmarking study is provided in Exhibit A, Tab, Schedule. Hydro One conducted four consultation sessions (see Exhibit A, Tab, Schedule) to seek stakeholder input and buy-in at key steps in the preparation and delivery of the compensation cost and productivity benchmarking studies. In October of 00, the first session was held to gain insight into stakeholder expectations for the benchmarking studies. The groups reviewed the Board directives with respect to those studies and provided input on the content for the terms of reference for the study. The second meeting held in December, allowed Hydro One to gain additional stakeholder input regarding key metrics and comparator selection criteria. This input was provided to Mercer and Oliver Wyman as a basis for developing their respective studies. In March 00, Mercer reviewed their approach to this benchmarking study and subsequently incorporated the stakeholder feedback into their survey. On September, 00, the Stakeholders reviewed the results of the compensation and productivity study prepared by Mercer and Oliver Wyman. A full report of the Stakeholder Consultation process can be found at Exhibit A, Tab, Schedule.

14 Exhibit C Tab Schedule Page of As summarized in Table, the results of the compensation benchmarking study show that Hydro One is currently between % below and % above the market median for total compensation for each of three employee groups. On an overall weighted average basis for the benchmarked positions, Hydro One is approximately % above the market median. Factors that can be attributed to Hydro One s position in the compensation market would include legacy collective agreement commitments, a need for competitive salaries and legacy pension and benefit programs. Table Transmission and Distribution Compensation Benchmarking Total Transmission and Distribution Compensation (Current) 0 The OEB s decision also directed Hydro One to include a productivity component in the benchmarking study that would provide empirical evidence that reveals the relative productivity of its workforce in comparison to other utilities. In developing this study, Oliver Wyman encountered a number of key challenges. There appears to be no standard industry wide measures for workforce productivity in the electric transmission and distribution industry. As well, there is no standard method of collecting and reporting

15 Exhibit C Tab Schedule Page of productivity measures across Canadian utilities. It was also a challenge to show how productivity can be measured across the entire workforce. Given the multi functions and discrete activities within an integrated utility, there is no single metric that is available. Most of the peer utilities who were contacted several times to participate in the survey were unwilling and/or unable to gather the detailed productivity survey data which was requested. Ultimately, Oliver Wyman simplified its original approach to deal with these challenges. Hydro One s productivity for transmission and distribution function and customer service function were measured along four indicators rather than specific metrics. As summarized in Table, the indicators measured for total transmission and distribution productivity Hydro One ranked better than the market median (meaning more productive) with the exception of one indicator which was slightly lower than median. Hydro One customer service productivity indicators (not shown in Table but discussed in the report) ranked the best among the peer group.

16 Exhibit C Tab Schedule Page of Table Transmission and Distribution Productivity Benchmarking Transmission and Distribution Productivity As stated by Mercer/ Oliver Wyman in their study report, examining the mix of [productivity] indicators leads to the conclusion that Hydro One requires less workforce compensation to generate various units of output. Therefore the positive Hydro One productivity results balance Hydro One s total compensation being above the market median. The benchmarking study results provide further support for Hydro One s position that its continued productivity accomplishments offset its relative compensation levels..0 ARNETT PANEL In the EB decision, the Board directed Hydro One to track any reduction in Executive salaries during 00 and 00. Hydro One has accepted the recommendations of the Arnett Panel regarding executive compensation. The top executive positions at Hydro One will have their compensation altered as the incumbents leave in order to

17 Exhibit C Tab Schedule Page of 0 follow the guidelines recommended by the Arnett Panel. To date, the positions of Chief Executive Officer and General Counsel have had their salaries reduced..0 SUMMARY Compensation levels at Hydro One are reasonable and appropriate given the environment in which we operate. Our staff are the most highly skilled and highly trained employees in the industry. Our staff performs more complex work than others in our industry. Hydro One s demographic challenge requires us to be active in the labour market place and with world wide competition for these skills, competitive compensation is a necessity. In addition, in a heavily unionized environment, there are significant constraints on an employer s ability to reduce compensation costs per employee. However, despite these constraints, the Corporation has made significant gains in the reduction of pension and benefits costs for MCP staff and pension costs for Society-represented staff. As well, over time, lower Society wage schedules should reduce overall compensation costs. Compensation at Hydro One is heavily influenced from the legacy of being part of Ontario Hydro. However, Hydro One has shown a track record of making progress on cost reduction and increase flexibility.

18 Exhibit C-- Appendix A Page of PENSION COSTS.0 PENSION COSTS Hydro One Networks is a participant in the Hydro One Pension Plan ( the Plan ). The Plan is a contributory, defined-benefit pension plan whose members comprise represented employees of the Power Workers Union ( PWU ), the Society of Energy Professionals ( Society ), MCP employees, pensioners who were employees, and pensioners who are beneficiaries of employees or pensioners. The Board has previously allowed cash payments related to pension obligations to be recorded in rates (RP--000). As well, in April 00, the OEB in its Decision with Reasons, approved full recovery of Distribution pension costs included in OM&A (RP /EB-00-0). Pension costs were similarly amortized for Transmission pension costs (EB-00-00); this treatment was continued in Hydro One Distribution s most recent rate application as well (EB-00-0). 0 Pursuant to the Inergi outsourcing agreement Hydro One Networks is also required to pay, directly to Inergi, a predetermined estimate of Inergi s annual current service pension cost in each year for each of the ten years of the outsourcing. The Hydro One pension cost allocated to Hydro One Networks is based on the ratio of base pensionable earnings for Hydro One Networks staff, as compared to the total base pensionable earnings for all of Hydro One employees. The method of allocation of the pension cost and the Inergi annual pension charge is consistent among all shared services costs, for operating and capital costs, and is consistent with the methodology reviewed during RP /EB-00-0, EB and EB-00-0.

19 Exhibit C-- Appendix A Page of For the Transmission business, the annual charge to be recovered through rates is estimated as follows: 00 Annual cash pension cost (millions) (may not add due to rounding) Corporate Pension Costs Transmission Distribution Other Total OM&A $ $ $ $ Capital $ $ $ - $ $ $ 0 $ $ Inergi Annual Pension Charge OM&A $ $ $ - $ 0 Corporate Pension Costs Transmission Distribution Other Total OM&A $ $ $ $ Capital $ $ $ - $ $ $ $ $ Inergi Annual Pension Charge OM&A $ $ $ - $.0 ACTUARIAL CALCULATION The most recent actuarial valuation for the Hydro One Plan was as at December, 00. In September 00, Hydro One filed this actuarial valuation with the Financial Services Commission of Ontario (FSCO). The valuation showed that the Plan had a deficit of $ million, on a going-concern basis. The required contribution for the Hydro One companies was set at $ million starting in 00 (actual contributions were about $ million), variable based on the level of base pensionable earnings. Of this amount, about $0 million represented annual current service costs, and the remaining portion represented special payments over years required toward the going-concern deficiency, and commuted value top-ups.

20 Exhibit C-- Appendix A Page of In accordance with applicable regulations, Hydro One makes all required contributions on a monthly basis. Hydro One s next actuarial valuation will be prepared as at December, 00 and will be filed with FSCO in September 0. The valuation will depend on investment returns, changes in benefits, and actuarial assumptions. The nominal discount rate used for the going-concern valuation in the 00 actuarial report was the same as 00. However, inflation was raised from.% to.0%, consistent with market conditions. This is based on the spread between the yield on longterm Government of Canada Bonds and Government of Canada Real Return Bonds. This spread increased by 0.% between December, 00 and December, 00. Increases in pensionable earnings assumption has increased to.% per year, plus an age/service dependent merit factor per year, from.00% in 00. Year s maximum pensionable earnings are assumed to increase by.0% per year from.% per year in 00. The staff growth reflected in the increase in current service cost supports the requirements of the work program. 0 During 00, actual contributions were about $ million. Actual contribution requirements in 00 and 0 may differ depending on the level of base pension earnings used to compute the monthly contribution. As well, actual contribution requirements in 0 may materially differ from the estimates provided depending on the results of the next actuarial funding valuation as at December, 00 which will be filed with FSCO in September 0. The difference between the estimated and actual pension costs will be tracked in a variance account (see Exhibit F, Tab, Schedule ).

21 Exhibit C-- Appendix A Page of.0 PENSION PLAN GOVERNANCE AND PERFORMANCE Hydro One is the Plan sponsor and administers the pension assets and obligations of the Plan. As of December, 00, the Plan had a reported net asset value of $, million and about, members. One-third of the Plan s members are active. The remaining Plan members are inactive, either retired or beneficiaries of retirees. The Plan governance was reviewed during RP /EB The Fund has consistently outperformed the benchmark made up of passive market indices. In the period from June, 00 (the Fund s inception) to December, 00, the Fund return was.% and the Fund outperformed its target benchmark return by 0.%. In addition, Fund performance has been favourable relative to that of other pension funds. Specifically, the Fund has a st percentile rank since inception (the st percentile is the top performing fund in Canada).