The CWA/ITU Pension Plan (Canada), or "the Plan," is a collectively bargained, multi-employer pension plan (MEPP). The Plan's participants are employees of the printing, publishing, and media industry. As unionized employees, the participants are represented in collective bargaining by Canadian union locals affiliated with the Printing, Publishing, and Media Workers Sector of the Communications Workers of America, AFL-CIO, CLC.

The nature of a MEPP means that plan participation is not tied to a single employer - once an employee becomes a participant, he or she can move between contributing employers without ending his or her participation in the Plan (subject to conditions under the plan rules).

As of December 31, 2012, the Plan had 28 separate bargaining groups at the Plan's participating employers, with approximately:

• 350 active participants,
• 1,804 retirees and survivors, and
• 1,694 deferred participants (who are no longer earning new pension benefits but who retain the right to a pension at age 65).

Participating employers make contributions to the Plan on behalf of active participants, based on the plan rules and on rates set by collective bargaining. Participants do not contribute directly. The Plan's assets are pooled in a single fund that is held in trust for the benefit of participants.

The Plan's financial status is evaluated by professional actuaries and audited by chartered accountants on an annual basis. Costs for professional fees and for Plan administration are paid out of the trust.

A Board of Trustees, or the "Board," is responsible for governing the Plan. The five Trustees are nominated to represent the various unions and the participating employers. The Board establishes the Plan's current benefit formula and oversees the investment policies and procedures, in accordance with the terms of the CWA/ITU Pension Plan (Canada) Agreement and Declaration of Trust and applicable legislation.

The largest number of the Plan's participants work in the province of Alberta. As a result, the Plan is registered in Alberta (registration number 0554717) and must follow Alberta's pension plan regulations as well as those in the federal Income Tax Act. For participants in other provinces, minimum pension standards in their applicable province of employment apply.

The Board determines the Plan's benefit formula that is used to calculate a normal pension benefit, based on actuarial valuation results for the Plan (see Question 10 for more on valuations). The benefit formula is established as a "target" that can be changed up or down to reflect the Plan funding.

If there is more than enough money in the fund (a "surplus"), the Board can improve the benefit formula, subject to pension legislation. In 1998 and 2001, the Plan provided such improvements to eligible participants, increasing their pension benefits. On the other hand, if there is not enough money in the fund (a "shortfall") the Board may decide to reduce the benefit formula for future service or even reduce accumulated benefits for past service, subject to applicable pension legislation.

To contend with the current financial situation of the Plan, the Board has worked with its actuaries and other advisors to determine the best course of action to improve the shortfall ratios. As outlined in the notice letter you received, the Board is making amendments to the Plan, including reducing benefits for active participants, deferred participants, pensioners, and beneficiaries.

The Plan's participating employers make contributions based on the amount set out in the applicable collective bargaining agreements. Employees do not contribute directly to the Plan.

No. Contributions are deposited in a pooled fund for the benefit of all participants within 30 days following the month they are due.

All contributions made to the pooled pension fund are held in trust. The fund is invested based on the Plan's Statement of Investment Policies and Procedures (SIP&P). This document acts as a "rule book" for investing the contributions - it outlines the Plan's investment objectives, strategy, and philosophy, as well as the overall approach to risk and return.

It also describes the role of those involved in the investment process, including how investment managers will be chosen, paid, and replaced. It also sets out the categories of investments that may or may not be considered, the desired diversification of the investment portfolio, the liquidity of investments, and related guidelines.

The Board of Trustees selects professional investment managers to manage the fund. The Board meets regularly to discuss the Plan's investments and asset allocation in accordance with the SIP&P and applicable legislation.

The fund is invested in a diversified portfolio that includes a range of investments of varying asset types and expected rates of return. Broad diversification helps to minimize risk. Any interested Plan participants may review the annually audited records of the Plan at any time to read the details about the investments and their performance.

For questions such as this on the Plan, contact FAS, the Plan administrator.

If an employer is contributing to the Plan on an active employee's behalf, that employee is an active participant. A person may also be called "active" if no contributions have been made on their behalf recently, but the non-contributory period is shorter than two fiscal years (this allows for participants to be "between employers" for a short time without leaving the Plan).

Deferred participants are people who were once active but for whom no contributions have been made for 24 consecutive months or more and who retain a right to a pension from the Plan. They have not started receiving a monthly pension from the Plan.

Retired participants are receiving a monthly pension from the Plan. If a retiree has an eligible spouse (or "pension partner" as defined by the Plan) on the date the first pension payment is paid, then the spouse has a right to a continuing pension on the retiree's death, unless the spouse signs a waiver.

Common causes for a pension plan to have a funding shortfall can be investment losses and/or other adverse changes in the financial markets.

Also, "mature" plans are more likely to experience shortfalls. A pension plan can be called mature when the majority of a plan's participants are deferred or already retired. This is the case of our Plan.

The fewer active participants there are, the smaller the amount of contributions flowing into the fund. And, the more retired participants there are, the more money flows out of the fund as pension payments. In addition, it is more difficult to manage the investments of a mature plan because a large portion of the fund must be held in relatively "liquid" investments (easily converted to cash) so that pensions can be paid from the fund. Both of these factors create a smaller pool of funds for investing and earning interest.

The Plan's actuary completes a periodic review called an actuarial valuation. This professional assessment determines the Plan's liabilities (what the Plan "owes") and compares that amount to the Plan's assets (what the Plan "owns").

Pension legislation requires that an actuarial valuation be performed at least every three years to determine the CWA/ITU Pension Plan (Canada)'s financial situation. Currently, though, the Board has been carrying out valuations more frequently to stay on top of the volatile economic situation.

The valuation examines the Plan's financial situation in two ways:

• On a "going concern" funding basis, as if the Plan will continue indefinitely with pension benefits paid from the Plan over the course of all the participants' lifetimes.
  
  
  • As of the last valuation at December 31, 2012, before the Plan changes described in the notice letter you received, the Plan was 93.5% funded on a going concern basis. Obviously, the Plan did not end on December 31, 2012 - it is intended to be a long-term, continuing pension plan. The going concern basis looks at the Plan through this long-term lens. (After reflecting the changes, the Plan is more than 100% funded on a going concern basis at December 31, 2012.)
  
  
• On a "solvency" basis, to determine if the Plan would have been in a position to pay all benefits earned by plan participants immediately as of the valuation date by purchasing annuities from an insurance company.
  
  
  • As of the last valuation at December 31, 2012, before the Plan changes described in the notice letter you received, the Plan was 68.4% funded on a solvency basis. A solvency test answers the question, "If the pension plan were ended now, would the fund have 100% of the money needed to pay all benefits earned to date?" This is a "worst case" test or temporary yardstick of the Plan's health - as mentioned above, the Plan is intended to continue into the long term.

Pension legislation calls for deficits or shortfalls to be amortized over a period of time. In recent years, due to the challenges facing all pension plans, it has been possible to get a waiver from making these payments for solvency deficits. This was done for our Plan in 2010 (see the sidebar in the notice letter you received for more information). On the other hand, though, it is not possible to get a waiver from funding the going concern shortfall.

As at December 31, 2012 - before any of the new Plan changes were brought in - it was estimated that 99.5% of contributions going into the Plan would be needed just to cover the payments for the going concern shortfall. That would have left us with just 0.5% to cover the new benefits being built up under the Plan by active participants and the fees needed to administer or run the Plan.

As such, the Board has had to make some tough decisions. The going concern shortfall payments need to be reduced or eliminated. The benefit reductions will eliminate the going concern shortfall and return the Plan to a surplus position.

There are no plans to wind up the Plan. It is an ongoing pension plan. However, the Board can make amendments to the Plan, including termination (called a "wind-up"), subject to regulatory approval. If this happened, the Board would provide plan participants with advance notice, as required by applicable pension legislation.

It is difficult to predict the future with certainty.

There could be increases or decreases in interest rates and investment returns (which could lead to future surpluses or deficits/shortfalls). There could be shifts in the Plan membership. For example, if many newspapers close in the future, and this causes the Plan to have fewer participants, it could have a negative effect on the Plan. Of course, the Trustees are working to make the Plan sustainable regardless of the number of active participants.

Any participants who are concerned about the future of the Plan may wish to talk to a professional and reputable financial adviser to help them to set realistic retirement goals and create a plan to achieve them.

However, it should be noted that, while there was a going concern shortfall (before the January 1, 2014 changes), the Plan is not running out of money. Plan assets totaled approximately $100 million as of December 31, 2012. The changes described in the notice letter you received "spread the pain" among all participants - but are intended to help sustain the Plan for the long term.

An Employee becomes a "Participant" as of the end of the first day of the month following the month when Contributions total $250 provided those Contributions were made during each of 12 or more calendar months, or, has completed two consecutive calendar years of employment for a Contributing Employer with at least 350 hours in each year or has earned at least 25% of the Maximum Pensionable Earnings.

Quebec Employees shall become a Participant at the end of one calendar year of employment for a Contributing Employer in which he has either worked 700 hours or earned at least 35% of the Maximum Pensionable Earnings.

Quitting a job or changing Contributing Employers has no direct impact on your pension entitlement unless it leads to a Break in Service.

If you are not Vested at the time you incur a Break in Service, you are not entitled to any benefits from the Plan. If you are Vested and incur a Break in Service prior to age 55, you will be entitled to a Deferred Pension. With a Deferred Pension, you can commence receipt of monthly pension payments anytime after age 55. If you are Vested and incur a Break in Service prior to age 55, you may have the ability to exercise the Portability Option. For more information on the portability option please refer to the Plan Booklet under "Forms & Documents", or you can contact FAS directly using the toll free number 1-800-770-2998 or by e-mail at questions@fasadmin.com.

If you choose to have your accrued benefit transferred to another plan under the Plan's "portability option", you will not be entitled to any further benefits from the Plan for the period of service over which the transferred benefits were originally earned. Should you return to active employment after previously transferring benefits using the portability option, your prior service will not count in any way when determining any future entitlements arising from the new period of active Covered Employment.

You are Vested after you have been a Participant in the Plan for 24 months or after you have completed 10 years of employment with the same Employer, whichever is earlier.

No. If you are age 55 or older, your benefit must be used to provide you with a monthly pension upon retirement. However, if your benefits are Vested and you have not yet reached age 55, you may be eligible to choose the portability option and transfer the commuted value of your pension to another registered pension plan; a locked-in RRSP to provide a pension no earlier than age 55; or you may purchase a life annuity contract. Please refer to the Plan Booklet under "Forms & Documents" for exceptions to this rule and full details regarding the portability option, or you can contact FAS directly using the toll free number 1-800-770-2998 or by e-mail at questions@fasadmin.com.

In the event of your death prior to retirement your spouse may also elect the portability option instead of receiving a monthly payment.

The date your monthly pension will begin depends on the type of pension and some other factors, which are outlined below. There are three types of retirement benefits available under the Plan:

• Normal retirement – A Participant who qualifies for a Vested Benefit may apply for a normal retirement on the later of the month following or coincident with the month in which he attained 65 years of age, or the month following the month he last worked.
• Early retirement – A Participant may apply for early retirement once he has reached at least age 55 and qualifies for a Vested Benefit. Early retirement benefits are determined using the same basic formula as normal retirement benefits. However, early retirement benefits are then reduced, based on the formula in effect at the time employment ends or a Break in Service occurs, to reflect the fact that payments will be made over a longer period of time.
• Disability retirement – A Participant may apply for a disability benefit if he qualifies for a Vested Benefit, has not attained age 65, has at least 10 years of Service Credit, has had Employer contributions remitted on his behalf within the immediately preceding 5 years and is in receipt of a Canada Pension Plan (or QPP) disability benefit.

Note, a participant must start receiving a retirement income no later than December of the year in which you turn 71 years of age.

For more details on each of the retirement types identified above or on the benefit formula used, consult the Plan Booklet which is located under "Forms & Documents", or you can contact FAS directly by using the toll free number 1-800-770-2998 or by e-mail at questions@fasadmin.com.

The Retirement Application is available under "Forms & Documents".If you have any questions you can contact FAS directly using the toll-free telephone number 1-800-770-2998 or by e-mail at questions@fasadmin.com.

Once you complete the application and have attached the required proof of age documents for both yourself and your spouse (if needed) and any additional information, you should sign the application and return it to FAS. Only original signatures will be accepted. Proof of age documents can be photocopies but must meet the requirements, as set out on the "Acceptable Proof of Age Documents" available under "Forms & Documents" or mailed to you in your retirement package. If you do not have a spouse, you must include a Statutory Declaration of Marital Status form with your application. A spousal waiver form must be signed and included with your application if you have a spouse and he or she has waived their right to receive the joint and survivor benefit.

FAS will acknowledge their receipt of your application, provide you with the retirement options that are available to you and will notify you if they require any additional information.

A "Notice of Change" form is available under "Forms & Documents". If you have any questions you can contact FAS directly using the toll-free telephone number 1-800-770-2998 or by e-mail at questions@fasadmin.com.

The Notice of Change form may be used to change your address, marital status, spouse or beneficiary. Once you have completed the form you can return the signed form to FAS for processing. Mailing information for FAS is available under "Contact Us" or, as indicated at the bottom of the form.

The Spouse of a Participant who has attained Vested Status is eligible for a Death Benefit if the date of death is after January 1, 1990. For earlier dates of death, contact FAS through the toll-free telephone number 1-800-770-2998 or by e-mail at questions@fasadmin.com. In the absence of a Spouse (or someone who meets the Legal Definition of Spouse for the Province of Entitlement), the death benefit would be payable to a Designated Beneficiary. In the absence of a Designated Beneficiary, the death benefit would be payable to the Estate of the late Participant.

A "Declaration of Marital Status" form, which identifies the Legal Definition of Spouse in each jurisdiction, is available under "Forms & Documents" as part of the Application Package. If you have any questions you can contact FAS directly using the toll-free telephone number 1-800-770-2998 or by e-mail at questions@fasadmin.com.

If a Participant is receiving a monthly, quarterly or semi-annual pension benefit, the Spouse at the time of retirement or the Designated Beneficiary should contact FAS through the toll-free telephone number 1-800-770-2998 or by e-mail at questions@fasadmin.com. Delay in contacting FAS may result in an overpayment that would have to be repaid to the pension plan.

No, you will only be affected by either the one-time 7.5% pension reduction (if you retire/start collecting your pension on or after January 1, 2014) or the annual 1% pension reduction between 2014 and 2018 (if you retire/start collecting your pension before January 1, 2014). Participants will not experience both types of reductions.