CIA Annual Meeting Assemblée annuelle de l’ICA June 29 & 30, 2006 Ÿ Les 29 et 30 juin 2006 Ottawa, Ontario

Monsanto Status Report - The Regulator’s Views David Gordon Deputy Superintendent, Pensions Financial Services Commission of Ontario

Pension Benefits Act Section 70(6) “On the partial wind up of a pension plan, members, former members and other persons entitled to benefits under the pension plan shall have rights and benefits that are not less than the rights and benefits they would have on a full wind up of the pension plan on the effective date of the partial wind up.”

What did the SCC say? “A partial wind up requires a full wind up to notionally occur for the purposes of evaluating the pro rata share of the assets and liabilities related to the partial wind up, followed by the continuation of the remainder of the Plan.” “For wind ups in whole or in part, the main concern is severing the terminated part of the Plan and ensuring Affected Members receive their legal entitlements, if any, as beneficiaries through the distribution of assets related to the part of the Plan being wound up.”

Surplus Distribution Requirements Pension Benefits Act, Section 79(3) “the pension plan provides for the payment of surplus to the employer on the wind up of the pension plan” Regulation 909, Section 8 2/3 consent

What is FSCO asking for? Allocation of assets as of the partial wind up date pro rata to wind up liabilities Roll forward of the partial wind up assets to current date Reconciliation of partial wind up members Updated balance sheet for the partial wind up portion Timetable to address partial wind up surplus Surplus application that meets the requirements

Issues Use of surplus to pay expenses (Kerry decision impact?) Use of surplus for contribution holidays in continuing portion of plan Purchase of annuities Multiple events considered in sequence

Plans Impacted Plans affected: 215 Partial wind ups: 309 Closed 92 Outstanding 217 (185 plans)

Outstanding Challenges Asset allocations for multi-jurisdictional plans Retaining “employer” surplus in ongoing portion of plan Annuity purchases Small indexed pensions Deferred members Prior year credit balances

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