Update No. 190 - December 2014

To: Active and Inactive Plan Participants on August 31, 2014
From: Howard Van Mersbergen, Executive Secretary-Treasurer

Status Report

The enclosed report shows your status with the Plan as of August 31, 2014. Be sure to check the information carefully and contact us promptly if it is incorrect or incomplete, or if your records do not agree with ours. Please check that your designated beneficiary is current. If you need to add or change your beneficiary, you can obtain the Change of Beneficiary form from the Employee Benefits section of our website (www.CSIonline.org), under Canada Pension, then Forms.

Final Average Earnings (FAE)

Beginning September 1, 2014 the time period through which FAE is calculated was extended from August 31, 2011 to August 31, 2015. Since the enclosed status report is as of August 31, 2014 the FAE is calculated based on earnings up to August 31, 2011.

Earliest Unreduced Retirement Date

 As described in the December 2013 Your Pension Update, the early retirement subsidies are being phased out beginning September 1, 2016. The enclosed status report reflects this change.

Retirement Calculations Online

The status report contains a projection of your pension at retirement. However, you can go online and create your own projections. Instructions are in the status report. The information you receive will help you plan and prepare for retirement.

Of course, we are more than happy to do the calculations for you and project your benefit to your retirement date. We can do these calculations for more than one retirement date. Just call us at 877-274-8796, ext. 231 or e-mail us at CSIPensionPlan@CSIonline.org and provide potential retirement dates.

Retirement Checklist

The enclosed checklist suggests steps you can take regarding your participation in the Pension Plan to prepare for retirement. Choose the checklist that is applicable to you and complete the steps to work towards your retirement goals.

Interest Rate

The Trustees confirmed 1.45% as the interest rate to be credited to the participant’s contribution account for 2014/2015.

Investments

At the Plan’s year end on August 31, 2014, the Trust Fund's net equity consisted of investments having market values in excess of $279 million. The asset composition was 3% cash or cash equivalents, 30% Canadian fixed-income securities, 30% Canadian equities, and 37% international equities. The total investment portfolio’s time-weighted annual rate of return through September 30, 2014, was 16.1% for the past year, 12.4% for the past three years and 8.7% for the past five years. The actuarially assumed interest rate is 6.75%.

Funding Status

As explained in the April, 2014 Pension Funding Update the last valuation as of August 31, 2013, showed the Plan to be funded at 88%. The next valuation is as of August 31, 2014, and is being prepared.

Plan Book and Summary Plan Description

To stay current with the Plan, you may always request an updated copy be sent to you or you may view the most recent version of both documents on the website at www.CSIonline.org/benefits, under Canada Pension, Publications.

Longevity

Defined contribution accounts (like a RRSP) are based on estimating an individual’s retirement needs. However, it is impossible to accurately predict how long any one person will live and therefore any plan will either over save or under provide. Saving too much for retirement puts an excessive financial burden on both the employee and the employer during employment. Excessive income is deferred and this decreases pre-retirement income. Not saving enough for any one individual’s actual retirement will mean that the retiree will be faced with the challenge of returning to work or relying on others for financial support.

Define benefit retirement plans (like the CSI Pension Plan) have the advantage of providing retirement resources for a group of people. Although individuals in the group may have unique longevity characteristics, the group’s longevity can be accurately predicted. With an accurate prediction of need, defined benefit plans do not need to over save and will not end up under providing for member retirement needs.

Contacting Us for Support

More information about our benefit plans and past Updates are located on our website at www.CSIonline.org. Select Employee Benefits and the appropriate plan. As always, if you have questions, please contact Marcy Sterken or Amy Slachter at 877-274-8796, extension 231 or 616-284-3231, or by e-mail at csipensionplan@CSIonline.org.