The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.
At the recent annual general meeting of the Healthcare Employees' Pension Plan of Manitoba (HEPP), the chair of the Board of Trustees announced a reduction in pension benefits, effective July 1, 2005. "Our first priority is to protect the interests of our members by ensuring the plan has adequate funds available to pay for all benefits," said Gary McIntosh, chair of the HEPP Board of Trustees. "For almost two years we have been warning our signatory boards and unions that all pension plans have been negatively impacted by falling stock markets, and that we have not been immune." The December 2002 actuarial valuation of HEPP revealed that current contribution levels are insufficient to fund basic plan benefits, and do not make provisions for unexpected unfunded liabilities. That left the HEPP Board of Trustees with two options: request a rate increase from the signatory boards and unions or reduce benefits. The Board of Trustees undertook a review of HEPP benefits and contribution rates compared to other Manitoba and Canadian pension plans, and found that while benefits were comparable, HEPP's contribution rates were lower. In September 2003, the Board of Trustees requested approval from the HEPP signatory boards and unions to increase contribution rates to meet expected future obligations. All but two approved the recommended rate adjustments; however, without unanimous agreement, the request was denied. In the event that a contribution rate increase, sufficient to solve the funding issue, is not approved and implemented by the signatory boards and unions, the following benefit changes will be implemented, effective July 1, 2005: Magic 80 remains in place, subject to a minimum age 55 - All members under age 55 who will achieve Magic 80 on or before June 30, 2005 will be grandfathered - Members who achieve Magic 80 on or after July 1, 2005 will be eligible to retire as early as the first of the month following age 55 For members terminating on or after July 1, 2005: - Credited service on or before June 30, 2005: the current termination benefit will be grandfathered (i.e. accrued pension deferred to age 65, subject to a 3% per year reduction for pension starting as early as age 55). - Credited service rendered on or after July 1, 2005: the termination benefit will be the accrued pension deferred to age 65, subject to a 6% per year reduction for pension starting as early as age 55. - The commuted lump sum value payable upon termination would reflect the benefits described above. Since inception in 1997 until 2002, the financial position of the plan enabled the Board of Trustees to approve ad hoc cost of living adjustments (COLAs) for retirees, disabled, and deferred vested members. In 2003 and 2004, the financial position of the plan did not allow for COLAs, and even with benefit changes announced yesterday, COLAs will not be paid for 2005 or the foreseeable future. With over 44,000 members and $2 billion in assets, the Healthcare Employees' Pension Plan (HEPP) is one of the largest pension plans in Manitoba. The plan is governed by an independent Board of Trustees comprised of both union and employer participants. Some of the Hepp signatory boards and unions include: Signatory Boards: St. Boniface General Hospital Winnipeg Regional Health Authority Regional Health Authority (RHA) Stakeholders, including the NOR-MAN RHA. Signatory Unions: Manitoba Nurses' Union Canadian Union of Public Employees Manitoba Government & General Employees' Union Manitoba Association of Health Care Professionals International Union of Operating Engineers Service Employees International Union Public Service Alliance of Canada Professional Institute of the Public Service of Canada United Food and Commercial Workers Union Canada - Local 832.
