FAQ Questions Benefit Changes 2013
1. Why were we given such short notice about these Plan changes?
This was certainly not the Fund’s choice.We could not make any announcement until the Financial Services Commission of Ontario (FSCO, the regulator) approved both the change and our communications material.
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MPF Canada Notice of Plan Changes
We wish to inform you of some changes to the Plan that will come into effect
on January 1, 2013 in order to comply with recent changes in provincial
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How will these changes affect me?
These changes only affect contributions on a goforward basis.
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Notice to Pensioners
Dear Pensioners and Beneficiaries:
We wish to inform you that some changes to the Plan will come into effect on January 1, 2013.
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March 15, 2012
Kinross Class Action – Summary of the Action
The Trustees of the Musicians’ Pension Fund of Canada are the plaintiffs in a shareholder class action
commenced on March 12, 2012 in the Ontario Superior Court of Justice against Kinross Gold Corporation
and several members of its senior management.
Read more... .
October 25, 2010
Plan changes are being made effective January 1, 2011. Please refer to the Fall 2010 Newsletter for changes.
Announcement by US Fund - rehabilitation plan
January 9, 2009
SOMEPP Election Notice
We wish to inform you that the Trustees have filed an election with the Superintendent of the Financial Services Commission of Ontario (FSCO) to have the American Federation of Musicians’ and Employers’ Pension Welfare Fund (Canada) (Registration #0215145) designated as a Specified Ontario Multi-Employer Pension Plan (SOMEPP).
What is a SOMEPP?
Our Plan is already recognized as a Multi-Employer Pension Plan (MEPP) under the Pension Benefits Act of Ontario. The SOMEPP designation is a new category of MEPP designed to provide temporary relief from the current solvency funding requirements while the Province develops a more permanent solution for solvency funding.
January 1, 2008 actuarial valuation
An Actuarial Valuation of the Plan was performed as of January 1,
2008. It showed the Plan is more than fully funded on a “going-concern”
basis. This means that as of January 1, 2008, the Plan’s assets
more than cover the costs of accrued benefits, based on the assumption
that the Plan will keep operating indefinitely.
Under pension law, the Actuary must also do a solvency valuation on a “wind-up” basis as of January 1, 2008. This valuation assumes the Plan ceases to operate, liquidates all its investments and pays out all benefits as of the valuation date. Measured this way, the Plan’s assets would cover 92% (the transfer ratio) of the benefit costs. Please note that this situation is purely hypothetical – in actual fact, the Plan was not wound up. Rather, we expect it to keep operating for many years in the future as it has done for over 40 years.
Temporary relief from solvency funding
Normally, the Province would require some action to address the
solvency shortfall, and for a MEPP like ours this might entail benefit
reductions. However, with the SOMEPP designation, the Plan will
not need to address the solvency shortfall for three years (2008-2010).
This three-year exemption will have no impact on your pension benefit
except in the very unlikely event that the Plan terminates and the
assets are not sufficient to fund all accrued benefits at that time.
In that very unlikely event, benefits would have to be reduced.
Please visit our website at www.mpfcanada.ca where we have included a comprehensive SOMEPP Q&A with this Notice. Alternately, you may also contact the Fund office for a copy of the SOMEPP Q&A.
BOARD OF TRUSTEES
Musicians' Pension Fund of Canada
2255 Sheppard Avenue East, Suite A110
Toronto, ON M2J 4Y1
Toll Free 1-888-462-6666
SOMEPP Notice: Some Background Information
What's a valuation?
It's a financial check-up of the pension plan. As a registered pension
plan providing defined benefits, our Plan must file a valuation
with the Ontario pension authority (FSCO) at least every three years.
The most recent one was effective 1/1/08.
Valuations are done by actuaries, independent professionals with special expertise in this area. They use commonly accepted methods and assumptions to assess whether the plan's assets are sufficient to meet its obligations to pay benefits, both now and in the future. They consider information already known for certain (e.g., members' ages and accrued benefits, the plan's benefit formula, the fund's assets, and employers' current contribution rates). They also make very long-term, conservative assumptions about what will happen in the future (e.g., at what age will members retire? how long will they live after they retire? how much investment income will the fund earn, on average, while members are building up and eventually receiving their benefits?)
What's a going-concern valuation?
This kind of valuation assumes the pension plan will keep operating indefinitely. It takes a long-term view, recognizing that pension benefits are typically earned, funded and paid out over many years. For example, a member may earn benefits over 30-40 years and receive a pension for another 25+ years. Similarly, the plan's assets are expected to have many years in which to accumulate and earn investment income. On this basis, short-term fluctuations in investment results are not very important - it's the overall long-term rate of return that matters.
What's a wind-up/solvency valuation?
A solvency valuation looks at what would happen if the plan were
wound up immediately. As required by provincial law, it takes a
very short-term approach and measures the level of benefit security
in case a plan is suddenly terminated (e.g., if the employer cancels
the plan or goes out of business). This could be a real concern
with a single-employer plan, but is less likely in a multi-employer
pension plan like ours where many employers are involved and contribution
rates are set out in negotiated agreements.
Should we be concerned about the shortfall?
It's not unusual for pension plans to have a solvency shortfall. In fact, over 3 out of 4 pension plans that filed valuations in Ontario from July 2004 to June 2007 reported ratios below 1.00, and about half were below 0.90. With a solvency ratio of 0.92 at 1/1/08, our Plan is actually healthier than many others. (The valuation dates in this comparison are not the same - if all plans were valued when ours was, they would likely have lower ratios and bigger shortfalls.)
The solvency valuation is just one measure of a pension plan's financial health, and doesn't actually fit the situation of a multi-employer pension plan. The reality is, our Plan didn't terminate on 1/1/08 - rather, it's expected to continue to operate for many more years.
How healthy is our Plan?
Based on the going-concern valuation, our Plan is fully funded as of 1/1/08 and actually has some excess assets. Of course, these results do not reflect the market declines of the last few months. Still, the excess assets provide a cushion that helps soften the impact of recent declines.
Pension Fund is invested for the long term, so time is on our side.
It's diversified among various asset classes, designed to withstand
short-term market fluctuation. Over the last 40 years, the Fund
has come through many cycles of market volatility.
What happens after three years?
Ontario has introduced the SOMEPP designation on a temporary basis
while it continues to examine the funding issues. This happened
after many MEPP trustees and their advisors, faced with growing
concerns about solvency funding, called for the Province to review
the rules. They pointed out that the regular standards didn't fit
the multi-employer plan situation - particularly since MEPPs are
less likely to be terminated suddenly.
Hopefully, the Province will introduce permanent changes in funding requirements
in the near future that are more suitable for plans like ours. As
we move forward, the Trustees will continue to closely monitor the
Plan's financial health with a view to protecting the health and
security of the Pension Fund for many years to come.
Volatility in the Stock Markets
Our fund, along with many pension funds, has seen many "ups
and downs" in the markets since inception. Right now, the markets
seem particularly volatile, but history tells us that this type
of volatility does not last forever. Please know that we are monitoring
the situation closely. And remember that we're "in for the
Whenever we consider making any changes, we do so with a view to
the long-term health and security of the fund's pension promise.
We'll continue to watch as local and global events unfold, and consult
with our advisors as necessary. We will keep you posted in the event
there is any significant long-term impact on the fund.
Please keep in mind the Fund is a Defined Benefit Fund- this is
explained in our FAQ section (#s 1 and 7).
Plan members who apply for a disability pension on and after January 1, 2008 will be ineligible to receive a disability pension if they are eligible to receive disability benefits from their employer or under an insurance programme provided by their employer.
Pensioners who are in receipt of a disability pension on December 31, 2007 are not affected by this rule.
Please contact the Fund office if further information is required.
Employee Trustee Bobby Herriot, after many years of dedicated service to the Federation (including his tenure as a Trustee of the Fund) announced his retirement effective July 31, 2007. We thank Bobby for his service to the Fund and extend best wishes to both Bobby and Etta for a long, happy and healthy retirement.
We welcome Bill Skolnik, newly elected Vice President from Canada, AFM, to the position of Employee Trustee.
NOTICE TO PENSIONERS
In answer to enquiries about an increase for 2007 we advise that there are no changes to pensions in pay at this time.
Although the Trustees have on many occasions in the past provided ad hoc increases to pensions in pay, the Plan rules do not provide for any automatic increases (i.e. cost of living increases).
The Fund continues to be financially sound and the Trustees will
again in the future consider further ad hoc increases.
The AFM-EPW Fund (Canada) is pleased to welcome our new Employee Trustee, Charles Barbeau. Mr. Barbeau is the Vice President of the Quebec Musicians' Guild.