Manitoba Telecom Services Inc. and Participating Subsidiaries Employee Pension Plan

Transcription

1 Manitba Telecm Services Inc. and Participating Subsidiaries Emplyee Pensin Plan

2 Ari Kaplan, LLB, LLM Partner in the Pensin and Benefits Grup at the law firm f Kskie Minsky Hired jintly by all parties t help negtiate the implementatin prcess and prvide an pinin n fairness Authr f Canada s leading textbk n pensin law Acted as cunsel n sme f Canada's mst widely-knwn pensin cases Dan Mrrisn, FSA, FCIA, CFA Senir Retirement Cnsultant at the Pensin and Benefits Cnsulting firm f Twers Watsn 30 years experience as a pensin actuary Has served as the MTS Pensin Plan Actuary since

3 Initial lawsuit filed in 1999 Lawsuit cncerned $43.3M f surplus funds transferred t the Pensin Plan at the time f privatizatin f MTS in 1997 Supreme Curt f Canada n January 30, 2014 upheld the trial curt ruling requiring enhanced benefits t be prvided by the Pensin Plan in the amunt f $43.3 millin plus the Pensin Plan rate f return and requiring the Cmpany t negtiate an implementatin plan with the parties As f June 30, 2014, the distributable surplus had grwn t $140.0M 3

4 The Supreme Curt f Canada ruling required the Cmpany t negtiate an implementatin plan with the Unins and Retirees t determine what benefits wuld be prvided and t whm A curt hearing t ask the Curt t apprve the distributin plan is scheduled fr Nvember 3, 2014 The distributin plan is subject t Curt apprval The distributin plan is als subject t regulatry apprval N persn is legally entitled t any payment f surplus until all apprvals have been btained and any appeals are exhausted. 4

5 Negtiatins between: With the help f: MTS TEAM TRAM Unifr IBEW Alng with their legal and actuarial advisrs Ari Kaplan, as an independent legal cnsultant fr the grups Twers Watsn, the Pensin Plan s actuarial firm Negtiated Settlement Agreement 5

6 Categry f Membership August 31, 2014 Estimated % f $ Distributin Current emplyees 2,472 20% Retirees and beneficiaries in receipt f a pensin 2,941 59% Deferred members 582 2% Exited members: Deceased (payable t beneficiary r estate) 753 6% Cashed-Out members 2,041 13% Nn-Vested members 583 <1% TOTAL 9, % 6

7 $140.0M as f June 30, 2014 agreed t by parties Interest will be added at a rate f 2% per year until the curt apprval is btained Reduced by csts incurred t implement settlement (estimated t be $3.1M) Subject t curt apprval, an additinal $2.0M success fee payable t the law firm f D Arcy & Deacn LLP 7

8 Wn the trial and Supreme Curt f Canada appeal n behalf f Plan Members Agreed t cap fees with a prvisin that a special bnus fee be requested if successful If apprved, additinal $2.0M will reduce the distributins n a pr-rata basis fr all Members except uninized emplyees as f January 1, 2014 (subject t the minimum distributin f $1,000) and nn-vested members D&D will als receive $700,000 paid directly frm the unins and MTS The $700,000 will nt reduce the distributins cntemplated under the settlement 8

9 Pr-rata share f surplus based n the value f yur benefits earned in the Pensin Plan cmpared t the ttal f everyne else s earned benefit value Yur value depends n a number f factrs: Age Number f years f credited service Annual earnings And, if yu are retired member r a beneficiary in receipt f a mnthly pensin: Date f retirement Current pensin in payment Past pensin payments received t date 9

10 A chice f either: 1) A lump sum cash payment; r 2) Transfer t a persnal Registered Retirement Savings Plan (RRSP) r the MTS Grup RRSP; r 3) Transfer a prtin t a persnal RRSP r the MTS Grup RRSP with the balance paid as a lump sum cash payment. Nte: If yu elect a transfer t an RRSP, yu must return yur electin frm with a cpy f the part f yur 2013 Ntice f Assessment sent t yu by the Canada Revenue Agency shwing yur persnal RRSP Deductin Limit. If Emplyees d nt make their electin by Octber 27, 2014, they will receive the default ptin f a lump sum payment. 10

11 Unlcated members Reasnable effrts will be taken t lcate all members wh are eligible t receive a distributin amunt The Pensin Plan will retain surplus benefits fr Exited Members fr a perid f tw (2) years fllwing substantial distributin after which time Exited Members rights t any surplus distributin will be extinguished. Frfeited amunts will be re-distributed as agreed t by the parties in a fair and equitable manner Minimum payment $1,000 fr each member r frmer member wh was nt nn-vested member Nn-vested members Each nn-vested member is eligible t receive a maximum allcatin f $500 (ttal pl f $200,000) Must self-identify by January 2, 2015 All lump-sum payments are subject t withhlding taxes Lump-sum payments will be included n a T4A frm the Plan 11

12 Current emplyees will receive apprximately $28 millin* Funded directly by MTS The Pensin Plan will distribute the remaining surplus t all ther affected members $112 millin* Funded by MTS int the Pensin Plan in accrdance with applicable pensin legislatin Fr a ttal distributin f $140 millin* * Less curt-apprved expenses where applicable. NOTE: These are apprximate figures fr illustratin purpses nly. The actual ttal distributin and allcatins between the grups will depend n apprved expenses, curt & regulatry apprvals, final calculatins determined by the Plan s Actuary, and the timing f the settlement. 12

13 Review yur persnal statement. If yu have any questins please call r pensinsettlementquestins@mtsallstream.cm Review the Reprt fr mre infrmatin abut the distributin including if yu want t express any views abut the settlement. Speak t yur financial and/r legal advisr if yu need advice Cmplete and sign the Declaratin page f yur Statement f Estimated Benefits and return it in the self-addressed, stamped, envelpe included in yur package Deferred Members and Exited members will nt receive a payment unless the Declaratin page is returned If yu have an electin t make, yu must indicate yur electin n the Declaratin page and return it by Octber 27, 2014 Visit fr up-t-date infrmatin abut the settlement 13

14 Questins Phne Questins Feedback Yur feedback (uncensred) will be prvided directly t the Trial Judge prir t btaining any apprval. 14