TEAM MEMO
To: TEAM-IFPTE Local 161 Members
From: TEAM Office
Date: September 8, 2017
Re: MTS ESOP to Bell ESP Transition
Members have enquired about the move from the MTS Employee Share Ownership Plan (ESOP) to the Bell Employees’ Savings Plan (ESP). In this memo we answer a number of questions not covered by the ESP Q&A provided by the Company.
1. Did TEAM know this change was coming into effect? We knew that Bell had its own employee share ownership plan, but we had no prior warning of its introduction on August 18th. It was as big a surprise to us as it was for our members. We learned of the change from members first.
2. Can the Company make this change? Yes. Under the MTS ESOP, the Company retained the right to alter and/or terminate the Plan. Our legal counsel has advised that the Company has fulfilled its obligations under the ESOP.
3. Is the ESP better than the ESOP? Each plan has its pros and cons, and whether one design is better than the other can depend on your specific circumstances. The ability in the ESOP to have your investment in the form of a registered plan i.e. TFSA, RRSP or Spousal RRSP was a big plus for those who took advantage of that feature. However, the ESP does have a higher company match ratio, but the two-year vesting requirement would be a negative if you were to resign from theCompany. Although, where an employee retires from the Company, or leaves through a voluntary departure program, there is no loss of the most recent two years company match.
4. Is this a good investment? Providing specific advice on investment matters goes well beyond TEAM’s scope, however, on a general point, it is widely recommended that the risks of investing in any stock and poor diversification (all your money in just one stock) are fully understood before making the investment and certainly before the investment becomes a significant amount.
5. What should I do with the ESOP Spousal RRSP? From the Q&A it appears the shares can remain in Computershare indefinitely (no time limit was specified), however, the $120 per year administration fee is on the high side. It would be worth learning about what other institutions can provide and how the shares or cash can be transferred without incurring a tax liability. Note that taking cash out of a Spousal RRSP too soon after the most recent contribution [to any Spousal RRSP] will, in almost all cases, generate a tax liability for the individual that was making the contributions.
If you have further questions, please contact the TEAM office.
TEAM-IFPTE Local 161
204-984-9470 or 1-877-984-9470
[email protected]
www.teamunion.mb.ca
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