Plan Text

5.08  Annual Pension Increase

(a) On January 1 of each year, pensions in pay from the Plan are increased utilizing the pensioner reserve method as described below:

The percentage of increase shall be the lesser of:

(i) the percentage by which the Average Annual Rate of Return determined by the following formula exceeds 4.5%,

Average Annual Rate of Return = (Sum of the Annual Rates of Return for each of the previous 5 Plan Years) / 5

where,

     Annual Rate of Return =                     Net Income                      
                                           ½ (Market Value of Fund at beginning
                                           of Plan Year plus Market Value at end
                                           of Plan Year less Net Income)

and,

“Net Income” equals the sum of interest, dividends, net realized gains and net unrealized gains during the Plan Year less the sum of actuarial, investment, investment counsellor, trustee, audit and other administrative expenses applicable to the Plan or Fund.

(ii) the percentage annual increase in the average Consumer Price Index during the twelve (12) month period that ended on the immediately preceding June 30.

(b) Pensions in pay on January 1 of each year shall be increased by the percentage determined in Section 5.08(a) multiplied by a fraction, the numerator of which is the number of months (maximum 12) the pension was in pay during the previous Plan Year and the denominator of which is twelve (12).

(c) Notwithstanding the provisions of Sections 5.08(a) and 5.08(b), the increase to pensions in pay effective January 1, 2003 will be calculated using the same method but using 50% of the percentage determined in Section 5.08(a)(i) and using the percentage increase in the average Consumer Price Index between the periods:

(i) January 1, 2001 to December 31, 2001, and

(ii) July 1, 2001 to June 30, 2002.

5.09  Supplementary Pension Increase

(d) If in any year after 1996 the percentage calculated in Section 5.08(a)(i) (the “Excess Interest Formula”) exceeds the percentage calculated in Section 5.08(a)(ii) (the “CPI Formula”), such excess will be used to provide a supplementary increase to the annual amount of those pensions in pay from the Plan which had their annual pension increase (as calculated in Section 5.08) in any of the three previous years based on the Excess Interest Formula.  The supplementary increase will be applied after the annual pension increase as provided in Section 5.08.

(e) The supplementary increase shall be the lesser of:

(i) the percentage increase described in Section 5.09(a) by dividing (1 + the Excess Interest Formula) by (1 + the CPI Formula); and

(ii) the increase necessary to produce an annual pension that would result from granting increases based on the CPI Formula in each of the three previous years (starting with the year three years previous) in which a lower increase (including any previous supplementary increases) has been provided.