MTS DC Pension Sessions - Answers December 8th 2009


To:         TEAM-IFPTE Local 161 Members

From:   Erin Spencer, Labour Relations Analyst

Date:    December 2, 2009

Re:         MTS DC Pension Sessions - Answers


A member of the TEAM office staff attended one of the Company’s DC pension plan information sessions to ask the presenters a number of questions.  Five of the six questions asked were from TEAM’s memo of November 2nd MTS DB to DC Pension Questions.  Here are the answers we received:


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

    A.  Michelle Vermette (Great West Life) conceded that yes, all of the risk in a DC plan is assumed by the employee.



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

    A.  Vermette said she could not answer that question as she deals primarily with DC plans.



  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?

    A.  Vermette commented that she hadn’t seen that particular study but thought it could possibly be attributed to the investment choices made by DC plan participants.



  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?

    A.  Gord McKie (MTS Allstream) responded that the existing joint Pension Committee is for the DB plan and that another committee will be struck to deal with the administration of the new DC plan.



  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?

    A.  Shelley Litke (MTS Allstream) advised that yes, all new hires to MTS Allstream after January 1, 2010, including executives and the next CEO, will not be eligible to join a DB plan, and instead will be automatically enrolled in the new DC plan.



  1. What happens if a person is a few months from retirement and there’s another stock market crash that devastates their DC plan retirement savings’?

    A.  McKie stated that the retirement would likely need to be postponed.



We would like to hear from you if you used the Company sponsored pension modeller, and it indicated that you would be better off switching to the DC plan.



TEAM-IFPTE Local 161

Tel       (204) 984-9470 or 1-877-984-9470

Fax:     (204) 231-2809