1. Changes to Worker Benefit Plans 2010 All Church Workers Conference

2. AGENDA Introduction Introduction Why are benefits changing? Why are benefits changing? Consultation Process Consultation Process Details of Pension and PRB Financial Challenges Details of Pension and PRB Financial Challenges Overview of plan changes Overview of plan changes Questions Questions

3. Consultation and Change Process Process to date: Process to date: Survey of employers and employees Survey of employers and employees Strategic Planning session with representative stakeholders Strategic Planning session with representative stakeholders Focus groups held with members and employers across Canada Focus groups held with members and employers across Canada Announcement of changes in July Announcement of changes in July

4. Why are the benefits changing? Employers’ concerns regarding increasing pension and benefit costs and costs for part- time members benefits Employers’ concerns regarding increasing pension and benefit costs and costs for part- time members benefits Increasing post-retirement benefit plan costs Increasing post-retirement benefit plan costs Substantial increases in Pension costs because of: Substantial increases in Pension costs because of: Lower investment returns than expected Lower investment returns than expected Historically low interest rates resulting in pension plan liabilities being dramatically increased Historically low interest rates resulting in pension plan liabilities being dramatically increased

5. DB Pension Plan Cost Details Financial Position – (000’s) Dec 31, 2009Dec 31, 2006 Going Concern Basis  Assets$ 65,684$ 63,530  Liability 78,995 65,418  Surplus (deficit)$ (13,311)$ ( 1,888)  Funded Ratio 83% 97% Solvency Basis  Assets$ 65,255$ 67,248  Liability 87,166 70,049  Surplus (deficit)$( 21,911)$ ( 2,891)  Funded Ratio 75% 96%

6. Post-Retirement Benefits Plan Estimated Future Cash Costs Estimated Future Costs - Current and Future Retirees - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 20082009201020112012201320142015201620172018201920202021202220232024202520262027202820292030

7. Reasons for Post Retirement Benefits Increases Medical and Dental increases above inflation Medical and Dental increases above inflation Increase in utilization Increase in utilization Government cost shifting to private plans Government cost shifting to private plans Increasing number of retirees Increasing number of retirees We are all living longer We are all living longer

8. Summary of Changes Employer Match on DC pension suspended Employer Match on DC pension suspended Post-retirement benefits discontinued Post-retirement benefits discontinued Long Term Disability to be paid by members Long Term Disability to be paid by members Least Cost Alternative required on drugs Least Cost Alternative required on drugs Minimum hours increased for benefits eligibility Minimum hours increased for benefits eligibility

9. 9 Pension Plan Changes Defined Contribution (DC) Effective January 1, 2011 employer match to the DC Plan suspended Effective January 1, 2011 employer match to the DC Plan suspended Member Contributions - % of earnings LCC Contributions as a % of member contributions 0-1%75% 1-2%25% 2-3%0% 3-4%0%

10. Pension Plan Changes Defined Benefit (DB) No immediate changes to the DB Pension Plan No immediate changes to the DB Pension Plan Alternatives being reviewed (could be either DB or DC) Alternatives being reviewed (could be either DB or DC) Will be contributory in the future Will be contributory in the future

11. Changes to Post-Retirement Benefits (PRB) PRB consist of Health, Dental and Death Benefit PRB consist of Health, Dental and Death Benefit No longer offered to future retirees except: No longer offered to future retirees except: Eligible members who retire before July 1, 2012 Eligible members who retire before July 1, 2012 Anyone age 60 with 15 years at July 1, 2010 Anyone age 60 with 15 years at July 1, 2010 All retirees will be required to pay a premium for PRB (most will pay $11.70 - single; $24,03 - family) All retirees will be required to pay a premium for PRB (most will pay $11.70 - single; $24,03 - family)

12. Changes to Post-Retirement Benefits (PRB ) Extended Health Extended Health Deductible added Deductible added Least Cost Alternative Drugs added Least Cost Alternative Drugs added Dispensing fee cap of $ 7 per prescription Dispensing fee cap of $ 7 per prescription Private Nursing coverage capped at $10,000 per year Private Nursing coverage capped at $10,000 per year Dental Dental Check ups, x-rays, now once every nine months Check ups, x-rays, now once every nine months

13. Long-Term Disability (LTD) Effective January 1, 2011 members will be required to pay the cost of LTD Effective January 1, 2011 members will be required to pay the cost of LTD Costs increase for members but so do benefits Costs increase for members but so do benefits When members pay the premium, benefits at the time of claim are non-taxable When members pay the premium, benefits at the time of claim are non-taxable

14. Long-Term Disability (LTD) – 60% option

15. Long-Term Disability (LTD Members will be able to elect coverage under the following non-taxable LTD options: Members will be able to elect coverage under the following non-taxable LTD options: 50% non- taxable 50% non- taxable 60% non- taxable 60% non- taxable 60% non- taxable with a 2% per year cost of living adjustment (COLA) 60% non- taxable with a 2% per year cost of living adjustment (COLA)

16. Long-Term Disability (LTD Costs

17. Least Cost Alternative Drugs Several provinces enacted legislation to lower the price of generic drugs Several provinces enacted legislation to lower the price of generic drugs When a generic is available we will pay for the least cost alternative (brand name or generic) When a generic is available we will pay for the least cost alternative (brand name or generic) Generic has same active ingredient but filler, binder or dye maybe different Generic has same active ingredient but filler, binder or dye maybe different Will pay for brand name if medically required Will pay for brand name if medically required

18. Least Cost Alternative Drugs Example : Lipitor Brand Lipitor Generic Atorvastin Cost Saving 3 month supply $ 231.29$ 114.95$ 116.34 Information from Manulife Financial

19. Least Cost Alternative Drugs Example : 20% Coinsurance Member buys brand name: Member buys brand name: Brand Lipitor Generic Atorvastin Drug cost$ 231.29$ 114.95 Plan member cost $ 139.33$ 22.99 Plan Cost$ 91.96 Information from Manulife Financial

20. Eligibility for Permanent Part-time (PPT) Benefits Employers concerned with providing full active benefits to PPT Employers concerned with providing full active benefits to PPT Benefits significant part of compensation Benefits significant part of compensation Pension legislation specifies pension eligibility; no legislation for benefits except Saskatchewan Pension legislation specifies pension eligibility; no legislation for benefits except Saskatchewan Eligibility generous compared to other Canadian employers. Eligibility generous compared to other Canadian employers.

21. Eligibility for Permanent Part-time (PPT) Benefits Eligibility: 24 hours per week Eligibility: 24 hours per week Current PPT employees will continue to be covered under current benefits plan until January 1, 2011; thereafter coverage depends on hours worked. Current PPT employees will continue to be covered under current benefits plan until January 1, 2011; thereafter coverage depends on hours worked. Membership in pension continues regardless if hours are less than 24 hours per week. Membership in pension continues regardless if hours are less than 24 hours per week.

22. Questions

23. Thank-you for listening! Thank-you for listening!