Canada's Top 100 Employers - 2009

Canada's Top 100 Employers - 2009

March 13, 2009 18:40 ET

A Statement by Canada Post Regarding Inaccuracies and Misconceptions Made During Public Consultations on Pension Reform

OTTAWA, ONTARIO--(Marketwire - March 13, 2009) - Canada Post feels compelled to respond to inaccuracies and misconceptions put forward today during public consultations on pension reform in Ottawa. Moreover, Canada Post wants to assure employees and pensioners that the company's pension plan, one of the largest defined benefits pension plans in Canada with approximately $12-billion in assets as of December 31, 2008, is sound and well managed.

Canada Post manages its pension plan with the aid of external professional advisors to ensure it remains viable and amply funded for the benefit of past, present and future members. The plan is governed by the federal Pension Benefits Standards Act and regulated by the Office of the Superintendent of Financial Institutions Canada. In accordance with best governance practices, the plan, investments and funding are also overseen by the pension committee of the Company's board of directors as well as a pension advisory council that includes representatives of all employees and retirees.

Based on the surplus position of Canada Post's pension plan on both a solvency and going concern basis as at December 31, 2006, the company began a contribution holiday in July 2007. That decision was discussed with and communicated to the company's largest union, the Canadian Union of Postal Workers beforehand. Both parties signed a letter, dated February 10, 2007, confirming Canada Post's legal right to take a contribution holiday.

The decision was communicated to all plan members on August 2, 2007. In addition, through their membership on Canada Post's Pension Advisory Council, all of our unions have been kept informed of the status of the pension plan at all times. The pension fund remained in surplus well into 2008.

The last quarter of 2008 saw a precipitous decline in global capital markets. In November 2008, Canada Post resumed contributions. It should also be noted that Canada Post has made special solvency payments totalling approximately $700-million since 2003.

As of December 31, 2008, according to Canada Post's actuary, Mercer, the Company's pension plan had an estimated going-concern surplus of approximately $700-million and a solvency deficit of approximately $1.2-billion.. Put another way, this solvency deficit means the pension plan was 91% funded compared to its long-term obligations, significantly higher than most large Canadian pension funds during this period of high volatility on capital markets.

Canada Post is among a group of federally regulated institutions that have made representations to public consultations related to the federal government's discussion paper, Strengthening the Legislative and Regulatory Framework for Pension Plans Subject to the Pension Benefits Standards Act, 1985.

About Canada Post

Canada Post is one of the largest Crown Corporations in Canada, with fiscal 2008 revenue of $7.5-billion and 72,000 employees. The company maintains the largest retail network in Canada and was recently recognized as one of Canada's top 100 employers.

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