Other Related Documents

DATE:  November 2001

Attached is a copy of the report of the Board of Trustees on the operations and financial results of the Plan during 2000.

Please ensure that this report is made available to employees who participate in the Plan.

For additional information on the PSMIP, Chiefs of Compensation at the corporate level may call Karen MacGregor at (613) 957-7189

Board of Trustees of the Public Service Management Insurance Plan (PSMIP) - Report to Members on the Financial Results of the Plan - 2000

Who is covered by the Plan?

As of December 2000, the PSMIP included 3 separate sub-plans. The Main Plan provides optional, employee-paid Life, Accidental Death and Dismemberment and Dependants' Insurance for excluded employees and certain designated groups. It also provides Long-term Disability Insurance for all plan members other than Judges. The Executive and Parliamentarians Plans provide government-paid Life, Accidental Death and Dismemberment, Dependants' and Post-retirement Life Insurance for eligible members.

Board of Trustees

A Board of Trustees, appointed by the President of the Treasury Board, monitors the operations of the Plan to ensure that the benefits are paid at the least possible cost to the membership. The current members of the Board are:

Scope of the Plan

Since its inception in 1968, the Plan has paid $446.1 million in cash benefits under the various classes of insurance to 10,255 members and their beneficiaries. As of December 31, 2000, approximately 40,000 members were covered under the Plan. In 'Insurance, members were insured as estimated below:

Premiums and Benefits

Premiums paid into the Plan during 2000 are shown in the following table and are compared with the amount paid out to claimants or set aside as reserves. This table does not include interest earnings or plan operation expenses. It should be noted that due to administrative variations, only 11 months of premiums were received between January 1, and December 31, 2000.

Reserves and Surplus

Plan members who become totally disabled may be eligible for benefits until they reach their 65^th  birthday. To ensure that sufficient funds will be available to pay all future benefits to members and their beneficiaries, a lump sum amount is set aside each time a disability claim is approved. These funds are referred to as "reserves". As of December 31, 2000, plan reserves totaled $141 million. In addition, most of the lines of insurance under the Plan held an accumulated surplus. Total plan surplus at the end of 2000 was $41.8 million.

Plan Disbursements

The total amount paid out of the plan during the year was $32.1 million. Of this amount, 92.5% was paid in the form of benefits to plan members and their families, 5.6% was for expenses and 1.9% was for premium taxes.

Recommendations Approved By Treasury Board

The Treasury Board approved the Trustees' recommendations for the following changes effective April 1, 2001.

• A 9-month premium holiday for Basic Life Insurance under the Main Plan
• A 9-month premium holiday for Basic Life, Accidental Death and Dismemberment, and Dependants' Insurance under the Parliamentarians Plan
• A 33% decrease in the monthly premium rate for Long-term Disability Insurance.

Further Information

If you have questions about your coverage under the Plan or need general information about the benefits available, please contact your compensation advisor or visit the TBS web site.