Information Meeting - November 18, 2009

An information meeting of the Canada Life Canadian Pension Plan Members’ Rights Group (CLPENS) was held at The Royal Canadian Legion, 6 Spring Garden Avenue, Toronto, at 7:00 p.m. on Wednesday, November 18, 2009.

Attendance - In addition to 138 CLPENS members, 3 invited guests (Mark Zigler and Anthony Guindon of Koskie Minsky and Marcus Robertson of Robertson Eadie & Associates) were in attendance. Attendance was down this year since a major disruption occurred on the Yonge St. subway line.

Opening remarks – The President, Wib Antler, opened the meeting by noting that the meeting would not be conducted as a formal Annual General Meeting but as an “Information Meeting”.

President's Remarks - Mr. Antler provided a briefing on the history and current status of negotiations with Canada Life since our last meeting of November 5^th, 2008:

Last November, the Financial Services Commission of Ontario (FSCO) refused to approve a mutually agreed upon settlement between another plan sponsor (Montreal Trust) and its plan members. As a result, similar cases like ours were waiting for the result of an appeal launched by the Montreal Trust and its plan members. In December the appeal was settled by a Tribunal who ruled that these types of cases must be accepted.
A case conference was held with The Honourable Mr. Justice Perell on May 6^th, 2009. The Surplus Sharing Agreement was not completed and presented to him at that time. He set up another case conference for June 19^th to review progress. We received a revised copy of the SSA in June but did not have time to review it before the case conference. A new case conference date was set for September 24^th.
A meeting was held on July 15^th that included counsel for Canada Life, counsel for CLPENS, and representatives from the CLPENS Executive, where the few remaining issues under the draft Surplus Sharing Agreement were ironed out. Justice Perell was advised of the progress on September 24^th.
The next appearance before Justice Perell has been set for December 14^th when we hope to finalize the Surplus Sharing Agreement and ask for his agreement on a couple of technical issues related to the settlement.
The documentation of the Surplus Sharing Agreement is being revised to include Indago, Pelican Foods, and Adason.

December 31, 2008 Actuarial Valuation - Shriram Mulgund introduced CLPENS’ consulting actuary, Marcus Robertson. Mr. Robertson distributed and commented on an outline of the results of the December 31, 2008 actuarial valuation as compared to the actuarial valuation of December 31, 2005.

In summary, the surplus position of the partial wind-up portion of the fund dropped from $103 million at January 1, 2006 to $72 million at January 1, 2009. The major causes of this decline were investment experience (actual investment results being less than assumed investment results by $22.5 million) and changes in actuarial assumptions with respect to the percentage of plan members who would take their entitlement in the form of a pension as opposed to a commuted value (that is, as a lump sum transfer). This assumption results in a difference in valuation of $26.5 million.

Remarks from the Legal Team - Mr. Antler introduced Mark Zigler who provided further comments on the status of the settlement.

Mr. Zigler noted that, while action has been slow, the judge’s involvement has been very helpful “in moving things along” and that, while the reduction in surplus is regrettable, the payout to plan members (approximately, $50 million) is still “a very big number”.
Mr. Zigler outlined the next steps in the process. After the appearance before Justice Perell in December, we hope to quickly finalize the SSA. Once that is done, we will be arranging a meeting with FSCO to ensure that they are comfortable with the proposed settlement. After that, we will start working on a detailed communications package to send to all members of the class, to inform them of the details of the proposed settlement and invite them to information sessions we will be holding jointly with CL in those major centres across Canada where significant numbers of members live.
CL has also agreed that once the SSA is finalized, they will take steps to pay out basic benefits to members, including the necessary approval from FSCO to do so.

Following this update, Mr. Zigler invited questions from the floor.

Questions from the Floor – There were many questions from the floor for both Mr. Robertson and Mr. Zigler. In particular:

If plan members fail to vote, are they deemed to be in agreement with the proposed settlement? - “No. Quite the opposite.” Positive votes will be required at the specified percentage levels.
Do all participating groups (that is, Indago, Pelican Foods, and Adason) have to agree? - No. Each participating group’s treatment will be based on the unique votes of its membership.
How many people are in the residual group? - There are approximately 2,000 people in the partial wind-up group and 3,000 in the remaining group (which group includes pensioners, active employees, and deferred vested members).
Can I “conservatively” expect to receive a cheque by December of 2010? – No, that would be a “very liberal” expectation.
Is the $12 million figure for expenses a “to date” figure? Will this figure be increased by ongoing expenses)? – No. The $12 million amount includes anticipated future expenses. It is important to note that actual expenses could be greater or less than anticipated.
What happens if I die? Do my survivors lose out? – No. The surplus sharing agreement provides for payments to survivors of deceased plan members.
Who controls the investment policy? – The Company controls the investment policy and, in this regard, they have done a good job. They moved the vast majority of assets held on behalf of partial wind-up members to fixed income investments near the end of the first quarter of 2008.
Upon finalization of the surplus sharing agreement, how do you keep things moving? - There will be a mailing to all plan members; plan member meetings across the country; a website; and 1-800- telephone numbers. It is an extensive undertaking but Koskie Minsky been through this process many times. As an example, the wind-up of the Eatons pension plan involved 50,000 plan members.
What if the vote fails? - In theory, a failed vote means that we are back to the going-to-court option. However, so long as statutory consent levels are reached, Canada Life could say “okay, close enough” and proceed with a distribution as set out in the surplus sharing agreement.
What happens if only the partial wind-up group vote in favour? – The vote would still be a failed vote. All sub-groups must meet vote threshold levels.

Page Last Revised
18 Aug 2011