Bell Pensioners' Group Spring 2014 President's Report Presented by Dan Mc Donald

Agenda Bell Valuation report Overarching Goal Target Benefit plan BPG Areas of Investigation BPG Board of Directors 2 27 May

Solvency: 16% Deficit $ Million Year-End 2012 Year-End 2011 Year-End 2010 Year-End 2009 Market Value of Assets (Net of Wind-Up Expenses) 13, , , ,283.2 Liability, assuming Plan is wound up 15, , , ,357.0 Surplus/(Shortfall)(2,532.7)(3,134.6)(1,518.1)(2,073.8) Solvency Ratio84.0%79.7%88.5%83.2% Bell’s latest update on the Solvency as of May 2014 is 91% 3 27 May

Overarching Goal: Improve security of existing DB pensions Understand risks to pension security Business and Pension environment Legal counsel, actuarial consultation, discussions with Bell Understand working of government Political and bureaucracy: the key players and their motivations Government Relations consultation Be seen as well-informed, professional player on DB policy Garner support for pension rules that would reduce risk Politicians; political staff; government Bureaucrats 4 27 May

Overarching Goal: Improve security of existing DB pensions Leverage opportunities, proactively and reactively, to advocate for DB pensioners …some examples… BPG directly, or as part of Canadian Federation of Pensioners Ontario: recommendations for legislative reform Quebec: critique of harmful proposals from D’Amours New Brunswick: reinforce with Finance the need to honour promises made Federal: preparing brief on reform of insolvency legislation (BIA/CCAA) Federal: preparing a response to the Target Benefit Plan Consultation paper 5 27 May

Pension Innovation for Canadians: The Target Benefit Plan Consultation Paper Definition of 'Target-Benefit Plan' ** A benefit plan that is similar to a defined benefit plan since contributions are based on projected retirement benefits. However, unlike a defined benefit plan, the benefits provided to participants at retirement are based on the performance of the investments, and are therefore not guaranteed. ** The Investopedia.com definition 6 27 May

Pension Innovation for Canadians: The Target Benefit Plan Consultation Paper The government’s consultation paper presents proposals to incorporate Target Benefit Plans (TBPs) into pension legislation The government is seeking views on the approach and elements of a federal TBP framework that includes the conversion of existing Defined Benefit (DB) and Defined Contribution (DC) pension plans to TBPs We have a number of serious concerns about the proposal and the very negative impact it could have on DB plan members and will be actively involved in the consultation process. This will include submitting our comments on the proposal by the June 23 deadline 27 May

Pension Innovation for Canadians: The Target Benefit Plan Consultation Paper Observations For a company that does not already have a pension plan for its employees, this is an approach that might give that company an incentive to offer one But for companies that offer DB pension plans, there are compelling incentives to replace existing plans with target plans because they shift risks away from plan sponsors and place them squarely on the shoulders of pensioners The government plan would require consent from plan members for such a transfer but the means of obtaining consent and the manner of approval are not defined. This could pose a big problem Though it’s likely that Bell – like other DB plan sponsors - would support the target plan concept, we cannot know whether this is something that Bell might consider either now or in the future 8 27 May

Pension Innovation for Canadians: The Target Benefit Plan Consultation Paper Risks The relaxed funding rules the government is proposing for TBPs would mean higher funding shortfalls – in the order of 20-30% - and more of them. Reduced funding obligations mean targets are unlikely to be reached if a plan is terminated The average Bell DB pension is $22,000. In a windup situation under a hypothetical TBP, Bell pensioners could see their pensions drop considerably because the real windup deficit would not be adequately funded Even in a non-windup situation, should Bell’s DB plan be changed to a target benefit plan, your pension income could fluctuate year-to-year depending on the financial performance of the pension fund and employees’ willingness to make plan contributions 9 27 May

Pension Innovation for Canadians: The Target Benefit Plan Consultation Paper Bottom Line This proposal is a major attack on DB pension plans and should be considered a serious threat BPG considers this proposal a top priority and the Pension Committee and Government Relations Committee are working on this important project In our response to the consultation paper, BPG will urge the government to exclude the conversion of DB plans to TB plans from the proposal and to put in place a consent process that would give each retiree the option to retain his/her current DB pension plan A copy of our response will be posted on our website May

Pension Innovation for Canadians: The Target Benefit Plan Consultation Paper Bottom Line We need your support It’s important that you keep yourselves informed on Target Benefit Plans When ever possible, it’s important that you inform other pensioners, members or non members, about Target Benefit Plans and the threat to our pensions May

BPG Areas of Investigation Restructuring Indexation COLA versus indexation Pension vs Annuities Valuation Methods Investment Strategies Financial Health of Bell Bankruptcy May

BPG Board Changes Departures Frank Bible Chapter Chair Southwestern Ontario Bob Bartlett PC Chair & Nomination Committee Ron Hunt Director at Large Arrivals Bill Hollet Vice-President Yvan Dutrisac Director at Large & Benefit Prime Don Graham Chapter Chair Southwestern Ontario Marg EadesDirector Pension Patte Seaton Board Secretary

BPG Board Dan Mc Donald (President) Bill Hollett (Vice-President) Penny Gilray (Treasurer) Patte Seaton (Secretary) Roberte Cadieux Bob Farmer Yvan Dutrisac Marg Eades Jean-Luc Geha Michel Doyon Louise Touchette Sue Dawes Chapter Chairs Marlyn Easterbrook(Ottawa) Titus Ramkhalawansingh (Toronto) Don Graham (SW Ontario) Robert Guay (Montreal) Jean Lamer (Quebec City) Norm Kelly (Télébec) May

Q & A