Annual General Assembly 2013 Agenda Opening of the Meeting - PowerPoint PPT Presentation

Annual General Assembly 2013

Agenda • Opening of the Meeting • Word of Welcome from the Retirement Committee President – FNPSPP Profile and Presentation of Members • Approval of the Minutes of the Meeting (August 29, 2012) and Follow-up • Presentation of Financial Statements, Salient Facts and the Financial Situation of the Plan • Ratification of Action Taken by the Retirement Committee in 2012 • Varia • Election of one employee representative • Adjournment of the Meeting

Word of Welcome Profile of the FNPSPP Presentation of Committee Members by Mr. Floyd McBride President of the Retirement Committee

First Nations Public Security Pension Plan (FNPSPP) • The FNPSPP is part of the largest Aboriginal defined benefits pension fund in Canada – Registered with the Office of the Superintendent of Financial Institutions and the Canada Revenue Agency – Meets the requirements of federal Pension Benefits Standards Act and the Income Tax Act • The FNPSPP is intended specifically for employees such as police officers, firemen and security agents working in fields deemed more at risk. The Plan provides these employees with fringe benefits equivalent to those prevalent on the market for these types of jobs • The Retirement Committee serves as the Board of Directors and is made up of 7 members, 3 of which are elected by and from among employees, employers members and retirees. • The FNPSPP had 197 members as at December 31, 2012

Retirement Committee Floyd McBride, President Éric Cloutier, vice-president Régis Flamand, director Johanne Castonguay, director Jean-Marie Gagnon, Ph.D., director Danielle Gill, director Angèle Petiquay, director

Approval of the Minutes of the Meeting Held on August 29, 2012 by M e Jacques Beaudet Gagné, Letarte, s.e.n.c.

Presentation of Financial Statements, Salient Facts 2012 and the State of Financial Soundness (Solvency and Capitalization) by Mr. Sylvain Picard, CPA, CA, CGA, ASC. Adm.A. General Manager

Financial Statements – Statements of Net Assets of the Fund Available for the Provision of Benefits – December 31, 2012 2012 2011 Assets $ $ Units held in the global trust 17,460,313 20,386,156 Accounts receivable Contributions receivable Employees 49,805 127,306 Employers 99,609 254,611 Additional contributions 36,331 250,118 Related party – Native Benefits Plan 42,753 1,694 Accrued interest and dividends 61,080 35,701 Sales taxes receivable 10,992 34,455 Prepaid expenses - 6,300 Cash 1,779,327 592,851 19,540,210 Total assets 21,689,192

Financial Statements Statements of Net Assets of the Fund (continued) Available for the Provision of Benefits – December 31, 2012 2011 2012 $ $ Liabilities Accounts payable Accounts payable and accrued liabilities 29,047 39,809 Related party – RBA Financial Group 125,000 18,227 154,047 Total liabilities 58,036 19,386,163 Net assets available for benefits 21,631,156

Financial Statements Statements of Changes in Net Assets of the Fund Available for the Provision of benefits – December 31, 2012 2011 2012 $ $ Increase in assets Investment income from the units held in the global trust 61,559 1,594,055 Other revenues 5,555 12,692 Contributions Employees 360,611 409,790 Employers 1,032,101 1,130,423 Redemption of past services 3,858 3,858 Transfers from other plans 89,396 144,703 1,553,080 Increase in assets 3,295,521

Financial Statements Statements of Changes in net Assets in the fund (continued) Available for the provision of the Benefits - December 31, 2012 2011 2012 $ $ Decrease in assets Administrative expenses Management expenses 125,000 131,250 Management fees on investments 52,726 63,499 Professional fees - Actuaries 119,872 77,782 Professional fees – Audit 2,861 11,004 Professional fees - Others 21,946 5,844 Cost of meetings 56,942 84,353 Marketing and development 13,206 8,749 392,553 Decrease in assets 382,481

Financial Statements Statements of Changes in net Assets in the fund (continued) Available for the provision of the Benefits - December 31, 2012 2011 2012 $ $ Decrease in assets (continued) Benefits paid 530,107 547,283 Refunds and transfers Refunds of contributions 1,949 76,210 Transfers to other plans 147,889 44,554 1,072,498 Decrease in assets 1,050,528 480,582 Increase in net assets 2,244,993 Net assets available for benefits, beginning of year 18,905,581 19,386,163 19,386,163 Net assets available for benefits, end of year 21,631,156

Financial Statements Investment revenues of units held in the global trust December 31, 2012 2011 2012 $ $ Interest 189,493 201,899 Dividends 334,747 428,639 Gain on sale of investments (580,606) 198,332 Distribution from real estate company 39,241 16,563 Current period change in market of investments 78,684 748,622 61,559 1,594,055

Salient Facts – Evolution in Net Assets For fiscal year ended December 31 (in Canadian Dollars) Period Increase Net cumulative assets (Decrease) 2012 2,244,993 21,631,156 2011 480,582 19,386,163 2010 1,384,450 18,905,581 2009 2,410,349 17,521,581 2008 (2,327,675) 15,110,782

Salient Facts – Changes in Net Assets For fiscal years ended December 31 (in Canadian Dollars) Millions $ 18 Increase 2012 : 2,244,993 $ 14 Cumulative : 21,631,156 $ 10 6 2 2008 2009 2010 2011 2012 -2 Change (blue and red) Cumulative

Financial Statements – Composition of investment- Units held in the global trust and other investment December 31, 2012 2011 2012 $ $ Money market Short-term maturity 0.33% 75,416 66,979 Asset-Backed commercial paper (ABCP) 0.00% 12,008 - Canadian bonds (yield between 1 % à 11 %) 35.80% 6,760,227 7,299,589 Canadian shares 22.64% 4,239,997 4,615,144 American shares 0.00% 8,485 - Foreign investments funds International shares funds 30.08% 5,036,145 6,131,910 Real estate funds Real estate companies 7.9% 652,265 1,613,090 Infrastructure funds 3.25% 675,770 659,444 100.00% 17,460,313 20,386,156

Salient Facts Breakdown of the Portfolio by Category of Asset Direct Real Estate and Infrastructure 10% Emerging Market Equities 3% Cash and Canadian Bonds 37% Global Equities 27% Canadian Equities 23%

Salient Facts - Contributions Period Annual Contributions 2012 $ 1,540,213 2011 $ 1,392,712 2010 $ 939,927 2009 $ 1,208,908 2008 $ 1,019,354

Salient Facts – Benefits Paid to retirees Period Benefits paid Retirees December 31 2012 $ 547,283 33 2011 $ 530,107 33 2010 $ 456,068 32 2009 $ 367,179 28 2008 $ 325,202 25

Salient Facts 2012 • To adapt to new realities to ensure the sustainability of your plan we dealt with three realities as early as 2012 – First reality • Addressing the solvency deficit of defined benefit pension plans such as yours – Second reality • Addressing the economic context and changes in world markets – Third reality • Responding to members’ growing needs

First reality: “Addressing the solvency deficit of defined benefit pension plans such as yours”

Action Taken to Re-establish the Financial Health of the FNPSPP - Dealings with the Superior Court to confirm the right of the Retirement Committee to implement amendments reducing benefits. This request was accepted regarding the RBA. - Follow-up on the acceptance by the OSFI of the amendments reducing benefits; multiple discussions - The amendments reducing benefits implemented will allow the FNPSPP to comply with the financing framework already established - Determination of employers under federal and provincial jurisdiction. For the FNPSPP, all employees are under federal jurisdiction.

Actuarial Valuation: Capitalization and Solvency Review The financial soundness of a defined benefit plan such as the FNPSPP is measured primarily in two different ways: • Capitalization review – The evaluation on the basis of capitalization serves to assess the financial situation of the Plan at the time of evaluation based on the premise that the Plan will continue to exist indefinitely • A rate exceeding 100%: sufficient financing • Rate under 100%: action must be taken to remedy the situation. • Solvency review – The evaluation on the basis of solvency serves to assess the financial situation of the Plan at a given date, based on the premise that the Plan will be terminated on this time. Using hypotheses prescribed by law, the aim is to determine the capacity of the Plan to fulfil its obligations to its members on the evaluation date • A rate exceeding 100%: sufficient financing • Rate under 100%: action must be taken to remedy the situation.

Solvency Review As at December 31, As at December 31, As at December 31, As at December 31, 2011 2011 2012 2012 Hypothetical wind- Solvency Hypothetical wind- Solvency up ($) ($) up ($) ($) Value of assets (1) 19,286,200 24,603,800 21,531,200 24,540,900 Current value of liabilities - Active participants & disabled 9,367,100 9,367,100 9,556,000 9,556,000 - Retirees and beneficiaries 11,750,900 11,750,900 12,220,600 12,220,600 - Deferred pensions and cases pending 3,911,300 3,911,300 4,275,300 4,275,300 Total liabilities 25,029,300 25,029,300 26,051,900 26,051,900 Surplus (deficit) on the basis of solvency (5,743,100) (425,500) (4,520,700) (1,511,000) Solvency ratio 77.1% 98.3% 82.6% 94.2%