MTS DB to DC Pension Questions November 2nd 2009



MTS begins its DC pension plan information sessions today.  It is reasonable to assume that the ultimate goal of these sessions is to cause some employees to cease paying into their Defined Benefit Pension plan and to switch to the Defined Contribution Pension plan as soon as possible.


It continues to be TEAM’s view that the best opportunity for you to make fully informed decisions about your retirement plans will be after we have Justice Bryk’s decision, and have reached a full and final resolution of the pension lawsuit.  Our memo of October 9th dealt with this in much greater detail.


Listed below are a number of questions around the Company’s DB to DC initiative.  You may find them useful in formulating your own questions for the MTS DC information sessions:


  1. At the last MTS AGM, Mr. Blouin stated that MTS’ DB Plan is “sound” and had performed better than most other DB plans in 2008.  Also, that the key to a strong pension plan is a strong company, and that MTS is a strong company with a strong foundation; “safer than a bank”.

    What is the Company’s rationale for closing a sound and secure DB pension plan to all new employees, only to replace it with a riskier DC plan?


  1. MTS has stated that “[it] is committed to providing its employees with competitive choices...” and that “more choices will be offered in terms of pension plans” to Manitoba employees.

    So why is it that new employees are not being given the choice of the better plan; the DB?


  1. Why didn’t MTS tell the joint Pension Committee that they were going to take the unilateral action of introducing the DC pension plan?


  1. If an employee switches from the DB to the DC, why are they not allowed to switch back if things don’t work out as forecasted or suggested?


  1. Research shows that people enrolled in DB plans expect to retire, on average between 8 to 16 months earlier than people enrolled in DC plans! (Manchester, 2007)

    Why do you think this is the case?


  1. Will all new VPs, our next CEO and President be forced to go into a DC plan, AND be excluded from going into any form of DB plan?


  1. Which type of plan, the DB, or DC, has the likelihood of providing the most secure retirement benefits possible?


  1. Does a member of a DC plan assume all the risk if the DC plan does poorly or loses money?


  1. In case of a future catastrophic stock market crash, like those of 1929, 1987, and 2008, will the Company do anything to help pensioners whose DC pension investment portfolios might be destroyed?


  1. Why is the company introducing such a major change to the pension plan so quickly, without waiting for the court ruling on the current pension lawsuit?


  1. Does the company acknowledge that, pending the result of the current lawsuit, the governance of the pension plan may revert to the pre-1997 arrangement, in which employees had significant governance power?  Does the company acknowledge, specifically, that the decision of the court may result in maintenance of and protection for the Defined Benefit plan for all members including new hires?