1. PEBT CONFERENCE November 26 th and 27 th 2013

2. Today’s Program Schedule AM PM 9:00-10:00 10:00-11:00 11:30-12:15 12:15-1:15 1:15-2:15 2:15-2:45 PEBT Financial and LTD Overview with Rob Hewitt, PEBT Trustee and Ray Parker, Desjardins Guest Speaker Dr. Susan Biali: Wellness Expert, Medical Doctor and Life Coach Break JEIS Audit Review with Rob Hewitt, PEBT Trustee and Rochelle Morandini, Morneau Shepell Lunch Guest Speaker Rebecca Marino: Tennis Star, Speaker on Mental Health and Cyber Bullying Q & A and Conference Closing 11:00-11:30

3. FINANCIAL SUMMARY

4. Financial Summary Long Term Disability (LTD) Predominant benefit Funding for Core LTD - $19.4M PEBT must work within funding for Core LTD -excess of funds can increase benefit -shortage of funds must decrease benefit JEIS funding initially loaned by government Other Benefits

5. Long Term Disability 20,915 active members (December 31, 2012) Total number of active claims under 5 years increased marginally in 2012 to 578 compared to 567 claims in 2010 An additional 141 claims are being paid beyond 5 years (durational pooling limit) as of December 2012 LTD Program costs have increased in 2012

6. Financial Summary $10.0 $11.9 $11.2 $16.2 $20.8 $16.5 $14.6 $13.9 $14.8 LTD Program Costs MILLIONS OF DOLLARS

7. Financial Summary $1.2 $3.0 $4.7 $6.2 $7.2 $7.3 $7.5 $7.3 LTD Benefit Payments MILLIONS OF DOLLARS

8. Financial Summary $0.5 $0.6 $0.7 $0.9 $1.1 $1.3 $1.1 $1.2 $1.3 JEIS Program Costs MILLIONS OF DOLLARS

9. Financial Summary PEBT Causes of Disability – Full Benefit Claims Nervous system and sensory organs 8% 14% 28% 19% 13% 5% Accidental fractures – bones and skeletal muscles Diseases of the skin – bones and skeletal muscles Neoplasms Mental disorders Heart and circulatory system diseases

10. Other Benefits Plan design and funding in accordance with Collective Agreements Economies of scale Reduced expense charges Managing risk to reduce benefit costs Shared services approach (common administration system) = efficiencies/savings

11. Other Benefits Basic Group Life Pooled with other Districts Paid $2.7M in claims in 2012 Premium is based on overall Plan claims experience

12. Other Benefits AD&D (including optional) Pooled with “similar block of business” Paid claims in 2012: - No Basic AD&D claims - One Optional AD&D claim totalling $200,000

13. Other Benefits Extended Health Care (EHC) ASO with Stop-Loss for large claims - Stop-Loss coverage for large claims transfers risk to insurer Small Districts initially had opportunity to enter into a pooled arrangement

14. Other Benefits Extended Health Coverage Approximately 20,980 covered members $19.9M claims paid in 2012 3.7% increase in extended health claims from 2011 to 2012 Number of members increased slightly from 2011 Primary cost drivers: drugs and paramedical services

15. Other Benefits PEBT EHC Claims – 2012 Medical supplies/ equipment 2% 22% 60% 9% 7% Paramedicals Vision Care Drugs Other

16. Other Benefits Top 5 Drugs by Category as a Percentage of Total Drug Claims JANUARY-DECEMBER 2012 25% 17% 7% 6% Central Nervous System Cardio- vascular Gastro- intestinal Anti- infective agents Anti- diabetic

17. Other Benefits Approximately 21,000 covered members $23.1M claims paid in 2012 2.6% increase in Dental claims from 2011 to 2012 Number of members increased slightly from 2011 Primary cost drivers: new and expensive treatments, aggressive marketing by dental community Dental Coverage

18. Other Benefits PEBT Dental Claims – 2012 22% 70% 8% Major Basic Ortho

19. Investment Summary Investment strategy – actively managed Funds distributed between two investment managers: - bcIMC - Mawer Mawer replaced McLean Budden June 2012 - Performance was consistently below benchmark - Ownership changes Investment Committee continuously reviews investment diversification This led to a search for another investment manager

20. Investment Summary Market fluctuations impact PEBT ability to support the fund PEBT Fund Returns Investment returns 20082009201020112012 -10.2%14.3%8.1%1.9%8.4%

21. Annual Reports 2011 annual report as well as previous reports are available on the PEBT website Includes audited financial statements 2012 annual report will be available on the website in mid-December Available at: www.pebt.ca

22. Questions?

23. Up Next LTD Overview Ray Parker, Manager Disability Claims, Desjardins Financial Services

24. Long Term Disability Benefit For Members who are regular employees working 15 hours or more per week with the Employer 66.67% of monthly earnings from the Employer $50 per month minimum benefit $10,000 per month maximum 120 calendar days elimination period

25. First 24 Months Elimination period Regular duties 'No surprises' approach Change of definition Any occupation 60% Transferrable skills analysis

26. Limitations and Exclusions Pre-existing conditions Layoff Committing or attempting to commit a criminal offence Riot, insurrection or civil commotion Alcohol and drug abuse Driving while impaired by drugs or alcohol

27. Offsets Paid Sick Leave WorkSafe BC Canada Pension Plan ICBC Part VII Benefits

28. Third Party Claims Types of claims Reimbursement Agreement Settlement follow-up Repayment Net Settlement

29. Termination of LTD Benefits No longer disabled Neglects or refuses to provide proof of disability or undergo a medical examination Outside of Canada for more than 2 weeks; 2 months Death or retirement 55 years of age and 35 years of pensionable service Fails to comply with third party claim requirements Not under continuing medical care Refuses to participate in disability management program

30. Appeals Encouraged to provide within 60 days Supervisor review If there is additional information Medical Appeal - 60 days/One year - Medical grounds only - Three physicians - Final If there is no additional information

31. Questions?