Dipac

You will have received a one page Interim Progress Report from INVISTA which communicates the status of our pension plan and progress under provisions of the 10 Year Amortization of the   $238 million unfunded liability (as reported in the February 2010 actuarial report to the Financial Services Commission of Ontario). You will recall that in the fall of 2010 INVISTA sought and obtained a non-objection to implementation of this special funding relief arrangement.

This latest report indicates that as of February 2011 the status of our pension plan is largely unchanged (transfer ratio remains at 0.65) despite INVISTA having met its obligations under the provisions of the Temporary Solvency Funding Relief arrangement. The information INVISTA has provided, despite the fact that it meets reporting requirements as defined by the Pension Benefits Act & Regulations, is virtually one year out of date. A more up-to-date picture will be calculated as at   February 26, 2012 and again need only be filed nine months later.

This is an excellent example of an area of the Pension Benefits Act & Regulations that is sadly in need of Pension Reform. Companies today are able to accurately report quarterly (every three months) earnings to shareholders but apparently are incapable of a timely issuing of an Actuarial Report on a pension fund. Current regulations allow for a nine month period from the time the report is prepared to the time it is filed with FSCO, and additional time elapses before FSCO makes the report available to the public.

The ten months since February 2011 have not been encouraging with regard to the performance of investments such as the funds associated with pension plans combined  with low interest rates. Thus when the content of the upcoming actuarial report finally becomes available we expect the news will not be especially heart-warming. Hopefully as 2012 unfolds the economic picture world-wide will show some improvement. Meanwhile all we can do (you, I & all other DIPAC members) is to continue our efforts to have legislation reformed where it negatively impacts on the security of pension plans.

For additional comments regarding Solvency Relief please revisit the Communiqué of Nov 2011 which is available once you log in as a registered DIPAC (web site) member.