Leading change Responding to Challenges in a Changing World Gord - PowerPoint PPT Presentation

Leading change Responding to Challenges in a Changing World Gord Graham, Executive Director

Meeting Outline • Review asrTrust and The Trustees’ Role • Some Plan Stats • 2016 Financial Results • 2017 Actuarial Valuation • Benefit Plan Upgrades • Answer Your Questions 2 2

What is a Trust? A trust is a legal relationship in which one party, ( GMCL) , gives another party, (the Trustee) , property or assets to hold in trust for the benefit of a third party, the beneficiary ( Retirees ). Trustees have a strict legal obligation to always act in the best interests of the beneficiaries. About protecting the promise for all beneficiaries, current and future. A 60+ year commitment. Building your Trust 3 3

The structure of the trust • 5 Trustees appointed by Unifor Board of Trustees • 5 independent Trustees Executive Director Manager, Administration and Strategic Relations Green Shield Canada Independent Investment Custodian Manages eligibility for benefits Managers and adjudicates claims 4

Membership Statistics 2016 2017 Members in Canada 31,209 31,833 Non-resident Members 56 56 Total 31,265 31,889 Total with Dependents 55,435 55,471 Average Age 70.73 70.33 Paid Claims in Canada $84,352,405 $88,454,691(E) Paid Non-resident Claims $633,837 $700,209 (E) Total $84,986,241 $89,154,900 (E) Per Member Claims - Canada $2,702 $2,778 (E) Per Non-Resident Member Claims $11,318 $12,503 (E) 5

Benefit Costs: 2016 $M, %, Before Taxes and Fees Vision, 4, 5% Dental, 17.1, 20% Drug, 39.3, 47% Travel, 2.2, 2% LTC, 12, 14% EHS, 7.3, 9% Audio, 2.4, 3% Drug Audio EHS LTC Travel Dental Vision 6

Investment Snapshot Type of Investment Managers Amount Invested Fixed Income TDAM $759M Canadian Equity TDAM $437M QV Financial Global Equity TDAM $648M Burgundy T. Rowe Price Fiera Canadian Real Estate Crestpoint CC&L $92M Great West Life Canadian Mortgages Philips, Hagar and $101M North 7

Comparative 2016 Returns Plan 2016 Returns asrTrust (CCI Retiree Plan) 7.6% Ontario Teachers’ Pension Plan 4.2%* Average Pension Plan 6.8%* * Andrew Willis, Globe and Mail, Wednesday, Mar. 29, 2017 8

2016 Financial Snapshot Very Strong Five Year Results 2016 2015 2014 2013 2012 Total Income $161M $86M $192M $142M $117M Total Expenses $105M $110M $109M $105M $118M Surplus/Deficit $56M ($24M) $83M $36M ($1M) Cumulative Surplus $150M $94M 118M $35M ($1M) Total Assets $ 2,040M $1,984M $2,008M $1,924M $1,887M Total Assets : 2012 - 2016 $2,040M In spite of spending more than 500 million dollars $1,887M on health benefits for members, your Trust has more money than what it started with! 9

How was the money spent in 2016? Out of every hundred dollars spent…. • $94.97 or health care • $4.28 for investment management fees • $0.35 for professional fees and consulting • $0.19 for salaries, benefits • $0.13 for board expenses • $0.08 for rent, insurance, phones, computers, etc. Audited financial statements is available at asrtrust.com 10

INVESTMENT EXCELLENCE AT A LOW COST The average management fee charged by a mutual fund in Canada is more than 2.4%* of your investment portfolio. That means, you pay $2.40 for every $100 you have invested. asrTrust’s investment management costs were a fraction of that – just 0.24% of net assets in 2015, or 24 cents on every $100 to manage over Two Billion Dollars in assets. * Morningstar Canada Cost of an asrTrust Average Investment Costs Mutual Fund asrtrust.com 11

Managing for the Future: 2017 Actuarial Valuation An actuary looks at…. • The people – how many, how old, how healthy, how long they are living • Financial markets – how will the Trust`s investments are likely to do in future • Health care cost trends – future drug costs and other significant healthcare expense To estimate whether the Trust is on track to meet its long-term obligations 12

2017 Valuation Valuation Date Funded Status Original GMCL Plan, January 2011 78.3% New GMCL Plan, April 2012 (Projected) 100.6% January 1, 2014 103.9% January 1, 2017 116.8% ➢ Very Strong Investment Returns ➢ Build up of Surplus Cash ➢ 2012 Plan Design Effective in Reducing Expenses The Plan has $116.80 in assets for every $100 in liabilities 13

Important Contributors Contributor Impact Risk Investment Results Another “great +++ recession” New drugs, changes to Claims Results ++ government plans Members living longer, Membership - actives retiring earlier 14

2018 Benefit Plan Enhancements ➢ Increase PSA test reimbursement from $15 to $35 ➢ Add coverage for dental implants at 50% reimbursement ➢ Increase eye exam reimbursement from $85 to $120 ➢ Increase vision care maximum from $300 every 24 months to $350 ➢ Increase hearing aid per ear limit from $1000 every three years to $1500 ➢ Increase reimbursement rate on medical supplies from 80% to 90% ➢ Reduce annual indexing of monthly contributions from 5% to 1.5% 15

Clarify Travel Requirements 90-Day Travel Stability Clause – Coming June 1, 2018 • Clearly states when you shouldn’t travel because of changes to your medical condition • Addresses the Number One concern people have when about to travel • Avoids misunderstandings and problems when a claim is made for emergency medical coverage 16

Conclusions… A very successful year and a solid first five years. This allowed the Trustees to begin to put something back into the plan. The next valuation will be January 1, 2020. 17

Questions asrtrust.com 18