Canadian Commercial Workers Industry Pension Plan

RESTRUCTURED PLAN

Question #1: Will there be a restructured Plan going forward?

Answer: Yes. The Plan will be restructured for benefits accruing on or after July 1, 2015.

Question #2: What is the restructured Plan?

Answer: The restructured Plan will provide benefits under new scales of benefit. Under the new scales, subject to certain modifications, accrual rates depend on a Member’s period of continuous service. The scale that will apply to you depends on whether you are required to make Member contributions and whether your employer is required to make additional contributions.

The Plan is a type that aims to provide certain benefits but is funded by way of fixed contributions. This means that your accrued benefit may change in the future – up or down – depending on the funding level of the Plan and other legal and regulatory requirements.

ADDITIONAL EMPLOYER CONTRIBUTIONS

Question #3: How much additional employer contribution will be required?

Answer: As part of the restructuring of the Plan, in most cases, 20¢ per hour of additional employer contributions will be required over and above the amount your employer is paying to the Plan as at June 30, 2015. In most cases, your employer will not be required to make these additional contributions unless your bargaining unit agrees to make Member contributions. For some employers, the required additional employer contributions will be 40% of their contribution rate as at June 30, 2015 to a maximum of 20¢ per hour.

NEW MEMBER CONTRIBUTIONS

Question #4: If your bargaining unit agrees to make Member contributions, how much will you have to contribute?

Answer: Starting July 1, 2015, the amount of your Member contributions will depend on the number of years of continuous service you have in the Plan.

PERIOD OF CONTINUOUS SERVICE	MEMBER CONTRIBUTION RATE
*Less than 2 years	0¢/hour
2 years but less than 8 years	22¢/hour
8 or more years	40¢/hour

*If you become a Plan Member before 2 years of continuous service, Member contributions will commence when you become a Plan Member at the rate of 22¢ per hour until you have 8 years of continuous service.

If your employer's contribution rate is less than 50¢ per hour (not including additional employer contributions) as at July 1, 2015, your required Member contributions will be lower and will be prorated.

Question #5: How will you know how much you are paying to the Plan?

Answer: The amount you pay to the Plan will be recorded on your pay stub.

Question #6: Will you be able to deduct the amount you pay from your income for tax purposes?

Answer: Yes, as reported on your T4 Slip.

BENEFIT REDUCTIONS

Question #7: Will the amount of your benefit that has accrued in the past be reduced?

Answer: Yes (as permitted by applicable law), your pre-July 1, 2015 benefit will be reduced.

Question #8: By how much will your benefit be reduced?

Answer:

• Pensioners (including spouses and beneficiaries) receiving a monthly pension
  = 10% reduction.

• Active Members who have not reached their membership termination date on July 1, 2015 for their current period of continuous service
  = 20% reduction.

• Deferred Vested Members who have not taken their pension
  = 25% reduction.

Question #9: Under what circumstances might your benefits not be reduced as stated above?

Answer: This could happen in various circumstances. Larger reductions than those described in Question 8 will apply to you if your bargaining unit (or last bargaining unit) does not negotiate or ratify the new Member contributions described in Question 4 and/or your employer is not required to make the required additional employer contributions as described in Question 3. For more details, see Question 13.

If your benefits have already been reduced, the reductions outlined above may not fully apply to you.

If your accrued benefit has already been reduced to the transfer ratio, the amount of your monthly payment or accrued benefit will not change.

Further, the portion of your benefit earned under certain pension plans transferred to the CCWIPP may not be reduced. It will depend on the terms of the transfer.

Question #10: What is meant by the “transfer ratio”?

Answer: In simple terms, the transfer ratio refers to the percentage by which a plan is funded on a wind-up basis. On a wind-up basis the Plan was 31% funded as at December 31, 2012, meaning that, if the Plan had been wound up on that date, accrued benefits for Active Members, Deferred Vested Members and Pensioners (including spouses and beneficiaries) would have had to be reduced by 69%. The transfer ratio is subject to change and updated annually.

There is no intention to wind-up the Plan.

Question #11: How will you know how these changes affect your benefit?

Answer: You will receive a letter from the administrator, as soon as reasonably possible, describing how these changes affect your benefit.

NEW SCALES OF BENEFIT

Question #12: What are the new scales of benefit effective from July 1, 2015?

Answer: Under the new scales of benefit, subject to certain modifications, accrual rates depend on a Member’s period of continuous service. The scale that will apply to you depends on whether you are required to make Member contributions as described in Question 4 and whether your employer is required to make the additional employer contributions as described in Question 3.

If the required Member contributions, employer contributions and additional employer contributions are paid on 2,000 hours in a calendar year, the benefit accrual rate will be in accordance with the following scale.

If more than or less than 2,000 hours are reported in a calendar year, the benefit accrual rate will be prorated over 2,000 hours.

PERIOD OF CONTINUOUS SERVICE	MONTHLY BENEFIT ACCRUAL RATE
*Less than 2 years	$0.00
2 years but less than 8 years	$18.00
8 or more years	$30.00

*If you become a Plan Member before 2 years of continuous service, you will begin to accrue a monthly benefit of $18 until you have 8 years of continuous service.

If your employer's contribution rate is less than 50¢ per hour (not including additional employer contributions) your benefit accrual rate and required Member contributions will be lower and will be prorated.  If your employer’s contribution rate (not including additional employer contributions) is more than $1.25 per hour, your benefit accrual rate will be higher.

Question #13: What happens if current contributions continue but the required Member and/or required additional employer contributions are not negotiated or are not ratified by a bargaining unit of the union?

Answer: Accrued benefits to June 30, 2015, for Active and Deferred Vested Members, will be further reduced such that the total reduction applicable to those benefits for Active and Deferred Vested Members will be 30%. The reduction applicable to Pensioners will remain at 10%.

In addition, benefits from July 1, 2015 will be determined by using lower scales of benefit (different than the one in Question 12) as follows, based on 2,000 reported hours in a calendar year.

If more than or less than 2,000 hours are reported in a calendar year, the benefit accrual rate will be prorated over 2,000 hours.

Scenario 1

If both the Member contributions and additional employer contributions (each as described in Questions 3 and 4) are not negotiated, the benefit accrual rate will be in accordance with the following scale.

PERIOD OF CONTINUOUS SERVICE	MONTHLY BENEFIT ACCRUAL RATE
*Less than 2 years	$0.00
2 or more years	$10.00

*If you become a Plan Member before 2 years of continuous service, you will begin to accrue benefits when you become a Plan Member.

If your employer's contribution rate is more than or less than $1.00 per hour, your benefit accrual rate will be higher or lower and will be prorated.

Scenario 2

If the Member contributions as described in Question 4 are negotiated but the additional employer contributions as described in Question 3 are not negotiated, the benefit accrual rate will be in accordance with the following scale.

PERIOD OF CONTINUOUS SERVICE	MONTHLY BENEFIT ACCRUAL RATE
*Less than 2 years	$0.00
2 years but less than 8 years	$14.00
8 or more years	$20.00

*If you become a Plan Member before 2 years of continuous service, you will begin to accrue a monthly benefit of $14 until you have 8 years of continuous service.

If your employer's contribution rate is less than 50¢ per hour, your benefit accrual rate and the required Member contributions will be lower and will be prorated.

Scenario 3

If the additional employer contributions as described in Question 3 are negotiated but Member contributions as described in Question 4 are not negotiated, the benefit accrual rate will be in accordance with the following scale.

PERIOD OF CONTINUOUS SERVICE	MONTHLY BENEFIT ACCRUAL RATE
*Less than 2 years	$0.00
8 or more years	$18.00

*If you become a Plan Member before 2 years of continuous service, you will begin to accrue benefits when you become a Plan Member.

If your employer's contribution rate is more than or less than $1.00 per hour (not including additional employer contributions), your benefit accrual rate will be higher or lower and will be prorated.

INDIVIDUAL PLAN MEMBERSHIP TERMINATION

Question #14: As an individual Member, can you choose to opt out of the Plan?

Answer: No.

Question #15: What happens if you are no longer employed by a Participating Employer and reach your membership termination date in the Plan?

Answer: Where permitted by applicable law, if you are not eligible for an immediate pension (under age 50), the amount of the benefit that you have accrued to June 30, 2015 will be reduced to reflect the greater of the Plan’s transfer ratio at the time of the event and any prior benefit reduction.

If a portion of your benefit has already been reduced, that reduction will be taken into account in determining the reduction applicable to you.  For example, where permitted byapplicable law, the maximum reduction will be to the Plan’s transfer ratio at the relevant time, regardless of whether or not you are entitled to a transfer or lump sum payment or decide to leave the benefit in the Plan and take a pension at a future date.

The portion of your benefit earned under certain pension plans transferred to the CCWIPP may not be reduced.  It will depend on the terms of the transfer.

These are the rules for individual terminations.  Different rules apply if you terminate membership as a result of the withdrawal of your employer or bargaining unit from the Plan.

PARTICIPATING EMPLOYER WITHDRAWALS

Question #16: What is a Withdrawal Event?

Answer: A Withdrawal Event is when an employer or bargaining unit of the union ceases to participate in the Plan.

Question #17: What happens in the case of a Withdrawal Event?

Answer: Where permitted by applicable law, accrued benefits to June 30, 2015 for all Active and Deferred Vested Members, regardless of age, who are affected by a Withdrawal Event on or after July 1, 2015 will be reduced to reflect the Plan’s transfer ratio, indicated in the most recent actuarial valuation report filed with the pension regulator before the Withdrawal Event and any prior benefit reductions.  Payments, in respect of accrued benefits to June 30, 2015 for Pensioners (including spouses and beneficiaries) who are affected by a Withdrawal Event, will be reduced by 10%.  The Trustees reserve the right to review this provision annually and impose greater reductions, if necessary.

If a portion of your benefit has already been reduced that reduction will be taken into account in determining the reduction applicable to you.  For example, the maximum reduction will be to the Plan’s transfer ratio at the relevant time, regardless of whether or not you are entitled to a transfer or lump sum payment or decide to leave the benefit in the Plan and take a pension at a future date.

The portion of your benefit earned under certain pension plans transferred to the CCWIPP may not be reduced.  It will depend on the terms of the transfer.

Question #18: Are withdrawing employers permitted to pay an amount to eliminate or mitigate the above noted reductions?

Answer: A withdrawing employer will be permitted to pay an amount, as determined by the Board of Trustees of the Plan, to eliminate or mitigate the reduction to Pensioners (including spouses and beneficiaries), Active Members and Deferred Vested Members.

LEAVES OF ABSENCE

Question #19: What happens if I am disabled as at June 30, 2015?

Answer: Provided you have applied for, and submitted, within the applicable timeframe, the required evidence of your disability to the Administrator, you will continue to accrue benefits in accordance with the scale of benefits applicable to your bargaining unit.

Question #20: What happens if I become disabled on or after July 1, 2015?

Answer: Provided you apply for, and submit, within the applicable timeframe, the required evidence of your disability (inability to perform your own occupation and not working) to the Administrator, you will accrue benefits to the earlier of:  age 65; recovery; the date pension accruals are credited under applicable workers compensation legislation; or, three (3) years of disability (where permitted by applicable law), in accordance with the scale of benefits applicable to your bargaining unit.  Member contributions will not be required.

Question #21: What happens if I am on maternity/adoption or parental leaves of absence?

Answer: There will be no change to the provisions governing maternity/adoption or parental leaves of absence.  Provided you make the required application through the Administrator you will accrue benefits in accordance with the scale of benefits applicable to your bargaining unit.  Member contributions will not be required during such leaves.

FUTURE CHANGES

Question #22: Can my accrued benefits be reduced in the future?

Answer: The Trustees will review the funding status of the Plan annually and will decide if further adjustments up or down are required.

REGULATORY APPROVAL

Question #23: Have the changes to the Plan been approved by the pension regulators?

Answer: The input of, and approval by, various provincial pension regulators is being sought.  The process of obtaining these approvals is not yet complete.  This may delay the implementation of certain changes described in this summary.

QUESTIONS ABOUT THE CHANGES

Question #24: What if you have questions about how the changes to the Plan affect your benefit entitlement?

Answer: If you have questions about the effect of the changes on your benefit entitlement, you may contact the Plan administrator.

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