President's Update Fall 2018 Welcome to our 2018 Montreal English Meeting. I am pleased to be here to share a President’s Update with you.

Agenda Protecting your Pensions Risk Report Card 2017 Indexation Issue Update BPG Board of Directors Here is today’s agenda. The Bell Pensioners’ Group is here to Protect Your Pensions. Today I will share some updates with you on these 3 topics September 2018 President's Update 2

Risk Report Card Risk Rating 1 Plan Funding A 2 Bell’s Financial Health 3 Bankruptcy Legislation F 4 Pension Legislation D 5 Bell’s Investment Policy 6 The Economy B In the past BPG has talked about the 6 Risks that we routinely monitor. Here they are and how we would rate our position in each risk … On Plan Funding – the best protection for pensioners is a full funded plan – we are in pretty good shape! We are sharing the hot off the Press PIC Report with you today – so you will get to see this data. On Bell’s Financial Health – one read of the BCE Annual report or the quarterly media release and you see they are in strong financial condition and they have a solid plan for growth. Bankruptcy and Pension Legislation are really the concerns. This is where we concentrate our efforts and our funds. These are the 2 risks that I am going to talk about today. Bell’s Investment Policy continues to work well for us – 70% low risk (fixed income) and 30% higher risk (equities). We met with Bell in October and they are very focussed on ensuring there is as little risk in this plan as possible. It was a very reassuring discussion. And on the Economy - interest rates have been creeping upwards - this is good news for plan funding valuations (higher interest rates improve valuations).  This explains in part the excellent numbers for our plans. September 2018 President's Update 3

Risk #3 - Bankruptcy Legislation Canada’s current Bankruptcy regime does not protect pensioners Sears bankruptcy triggered wide public awareness Many parties have tabled private members bills BPG and others pressing the federal government Federal Consultation process promised Super-priority status for pensions proposed Risk #3 - Canada’s current Bankruptcy regime does not protect pensioners. The Bankruptcy and Insolvency Act, and the Companies’ Creditors Arrangement Act are the two acts that govern bankruptcy and insolvency and they provide little, if any, security for the underfunded portion of a pension plan. Those are the acts that need to change. Canada’s insolvency and bankruptcy regime is one that needs reform and that’s our focus. But reforming the bankruptcy rules and regulations is a daunting challenge. The Sears bankruptcy has triggered a broad awareness of the treatment of pensioners in cases of employer insolvency and bankruptcy, There is more support for pension protections right now. That support is welcome and helpful to our cause. There are now 5 Private Members Bills that have been introduced since last October focussed on pension. protection across many parties. Now private members bill’s don’t very often make a difference. But they get media attention and we will take that. Other advocacy groups like CARP are taking an interest in how pensioners are treated by the bankruptcy rules – it is their petition that we asked you all to support last fall. They also sponsored a Day of Action in February which some of you may have participated in by visiting or writing your MP. Thank you for that. Over 1000 individuals met with 80 MPs across Canada. We will participate in the federal consultation process promised in the federal budget: Let me remind you what was stated in the 27 February 2018 federal budget “… we will be looking to obtain feedback from pensioners, workers, and companies. We will take a whole-of- government, evidence-based approach towards addressing retirement security for all Canadians.” We had been told that this consultation process would be launched “in the summer”, but we are still waiting. I will talk about this a bit later. And at the Federal Liberal party policy convention in Halifax in April – the CFP President, Mike Powell, presented a resolution to give pensioners super-priority status in bankruptcy and insolvency situations and it was adopted as one of the top 5 policy proposals to guide Liberal work over the next 8 years. Currently underfunded pension plans are at the back of the line for obtaining funds from a bankrupt company Super priority would bump them to near the front of the line, ahead of most other creditors. Given that federal and provincial funding rules permit plans to be underfunded, it is only fair as a quid pro quo that pensioners be protected through the bankruptcy rules in those (fortunately) rare cases when companies go under. Overall, We remain cautiously optimistic September 2018 President's Update 4

Risk #4 – Pension Legislation Provincial 2013 – Quebec eliminated solvency measure 2017 – Ontario Reduced solvency target from 100% to 85% Increased ‘insurance fund’ from $1000 to $1500 2018 Nova Scotia and Manitoba consultations underway BC government taking steps to protect some pensioners Ontario now has a new government ... Risk #4 Pension Legislation BPG closely monitors pension-related activity at both the federal and provincial levels in Canada. Proposed changes may be – and often are – unfavorable to pensioners. What happens at the provincial level – may occur at the federal level. Just to remind you that our plans – except for BCE – are federally regulated. BCE is regulated by Ontario. Changes to the regulations in Quebec and Ontario, and current consultations in Manitoba and Nova Scotia illustrate that solvency funding based rules are under attack. Quebec totally eliminated the need for a solvency measure Ontario reduced the solvency funding target from 100 % to 85%. In other words, a plan will be considered to be “fully funded” if it has 85% of the required funds. I will add that there was something on the positive side for Ontario. They have a Pension Benefits Guarantee Fund – like an insurance policy – that was slightly enhanced, providing some protection that should cover some of the shortfall (i.e., the coverage increased from $1000 to the first $1500 of a monthly pension) And plan sponsors had to increase their financial support to this Guaranteed Fund. That’s good – it just did not go far enough. It needs to fully cover shortfalls. And now the Nova Scotia and Manitoba governments are examining options to reduce sponsor funding requirements, and are looking at introducing target benefit plans. We did respond to both consultations. Those Consultation processes in both those provinces completed over the summer; the next step will be for those governments to announce what changes, if any, they will make to their respective pension regimes. The BC government took the unusual step of requiring Catalyst Paper to top up its pension plan (which is underfunded by about 18%), if it sells any of its assets in BC or declares bankruptcy. This move is designed to preclude another Sears-like stripping of the company’s assets for the sole benefit of shareholders … which the company seems to be doing. In the case of bankruptcy, this appears to conflict with the federal bankruptcy laws so it may not survive a court challenge in that instance. Nevertheless, it is very positive to see the government take proactive steps to protect one of the pensions in its jurisdiction. And now Ontario has a new government – an unknown - and we are reaching out to start to build new relationships … September 2018 President's Update 5

Risk #4 – Pension Legislation Federal Bill C27 - Target Benefit Plans Filomena Tassi appointed Minister for Seniors Mandate: Consult stakeholders Coordinate the government’s work to strengthen the protection of workplace pensions Risk #4 Pension Legislation – continued Here is what’s happening at the federal level … Just in case you are wondering about the Federal Bill C27 that was about introducing Target Benefit Plans – the Labour unions and other CCRS members continue to voice a very loud opposition – and we believe that Bill will just be allowed to die a quiet death The good news is that a Federal Minister responsible for Seniors has been appointed over the summer– Filomina Tassi. Many of you may have supported the CARP initiative through the online petition. This is good news for all of us, as it promises to provide greater political leverage for issues that concern BPG and its members. The “mandate letter” for Ms Tassi was released at the end of August The highlight for us is this statement - : “In particular, I will expect you to work with your colleagues and through established legislative, regulatory, and Cabinet processes to deliver on your top priorities (and there are many). And - four government ministries are involved, but the new Minister of Seniors is to “coordinate the government’s work”.  The promised Federal Consultation that I mentioned earlier falls under this mandate – so we are expecting this will start soon ... September 2018 President's Update 6

Risk Report Card Risk Rating Plan Funding Bell’s Financial Health 1 Plan Funding A 2 Bell’s Financial Health 3 Bankruptcy Legislation F 4 Pension Legislation D 5 Bell’s Investment Policy 6 The Economy B Back to the Risk Report Card … thanks to all of the attention the issues are getting – we are cautiously optimistic that we may see some movement on bankruptcy legislation and that is key for each and everyone of us. And we have a new Seniors Minister - so that’s should provide some support – although that is still untested … And for Pension Legislation – at least at the Federal level, we remain at a 100% target for Solvency and we have the attention of the Feds – we remain very cautiously optimistic And the rest of the card is pretty solid! September 2018 President's Update 7

2017 Indexation Issue - Update Members questioned why the 2017 increase was only 1% BPG sought Legal advice January 16, 2018, a retiree initiated a class action suit on behalf of all Bell Canada DB pensioners seeking $150 million in damages The role that BPG has assumed in this case is just one of providing updates to our members. We are not involved in this case. Just to review the background on the Indexation issue … We heard from some Bell Canada members at the beginning of last year that they expected a 2% increase in 2017 rather than the 1% we all received. We considered it important to investigate and consult on your behalf with a legal firm. Our Legal Counsel advised that Bell’s interpretation would likely be upheld if legally challenged We were satisfied that no further action was warranted One of the Bell retirees decided differently and on January 16, 2018 initiated a class action suit on behalf of all Bell DB pensioners – seeking $150m in damages. Class actions proceed in two phases. First, the court must determine whether to certify the claim and the defined class of beneficiaries as the proper subjects of a class action. This has been scheduled for April 24-25, 2019. Second - Should the action be certified by the court, the lawsuit then proceeds on the merits to determine the validity of the claim. Should the suit ultimately be successful, all members of the class would be eligible to proceeds as determined by the court, after legal costs of course. Bell had filed a request to “stay” (ie, suspend) this proceeding so that the matter could be dealt with instead by the pension regulator, OSFI. Bell also asked that its request for a stay be heard prior to the certification hearing. On June 29, the court denied Bell’s procedural request and determined that Bell's request for a stay should be heard together with the certification motion next April. Next update likely when the certification motion is to be heard on April 24 and 25, 2019. ----------- The Bell Canada Pension Plan provides for an annual automatic indexation increase each January 1 based on the percentage increase in the Consumer Price Index (CPI) over the 12 month period ending October 31 of the year immediately before the increase, rounded to the nearest whole number, to a maximum of 2%. Notably, if the change in the CPI is negative in a given year, your pension will not be reduced. While Statistics Canada published the change in the CPI for that period as 1.5%, the actual CPI published by Statistics Canada was 129.1 for October 2016 and 127.2 for October 2015 This amounts to an annual increase of 1.49% which rounds to 1% as a whole number. September 2018 President's Update 8

2018-19 Board of Directors Chapter Chairs Executive & Officers Patte Seaton (President) Diane Holgate (VP Ontario /Atlantic) Denis Marquis (VP Québec) Lee-Anne Mackey (Treasurer) Gayle Duchene (Secretary) Directors at Large Carol Lacroix (Communications) Raynald Wilson (Benefits) Marg Eades (Pension Committee) Peter Dilworth (Audit & Finance) Dave Palmer (Pension Committee) Denis Henry (PC & CFP Rep) Vacant (Nominating) Chapter Chairs Marlyn Easterbrook (Ottawa) Carol Ann Cole (Ont. Central) Steve Longeway (SW Ontario) Lucie St-Arnault (Montréal) Marjolaine Gilbert (Québec) Roger Gauthier (Télébec) Bob Noseworthy (Aliant Atlantic) These are the Board Directors who represent you effective June 2018. The names in blue are all new Board Members. Your Chapter has a similar list of dedicated executives who support each Chapter. It warms my heart to work with such a talented and committed team of volunteers. We do this because it’s important work – and because it is great to be working for a purpose with people you have a lot of respect for. In addition to the Board members, today we have about 130 great volunteers working with us on a regular basis. If am hoping that I can entice some of you to volunteer to work with us at the National Level. We have an immediate opening for a Board Director and Chair for our Nominating Committee and we are looking to Quebec to fill this position. It is important for us to maintain a Quebec and Ontario balance. We are also looking for an assistant to the Communications Chair who would eventually take over that Board role. I just cant say enough how much I enjoy working with the Bell Pensioners” Group. Please join our team! September 2018 President's Update