2003 Annual Report of the Board of Trustees of the Public Service Management Insurance Plan (PSMIP) - Information Notices

November 17, 2004

2003 Annual Report of the Board of Trustees of the Public Service Management Insurance Plan (PSMIP)

Please find attached the Annual Report of the Board of Trustees of the Public Service Management Insurance Plan (PSMIP) for 2003.

The Board of Trustees monitors the financial operations of the Plan and oversees its administration. Current members of the Board are:

The annual report is an important document that should be made available to all Plan members. Accordingly, departments are expected to make every effort to ensure that members are notified and encouraged to access a copy of this report.

For additional information on the PSMIP, chiefs of compensation at the corporate level may call
Terry Ranger at (613) 941-4463.

Board of Trustees of the Public Service Management Insurance Plan (PSMIP) - 2003 Annual Report to Members

What is the PSMIP?

The PSMIP is a group insurance plan established by the Treasury Board of Canada. It provides Long-term Disability (LTD), Life, Accidental Death and Dismemberment (AD&D), and Dependants' Insurance for federal employees who are excluded from collective bargaining because they are working in managerial or confidential capacities. Executives, parliamentarians, and judges are also covered by the Plan and have distinct benefits. The PSMIP is insured through National Life of Canada.

Board of Trustees

A Board of Trustees, appointed by the President of the Treasury Board, monitors the financial operations of the Plan and oversees its administration. The current members of the Board are:

Scope of the Plan

Since its inception in 1968, the Plan has paid $557.1 million in cash benefits under the various classes of insurance to 11,505 members and their beneficiaries. As of December 31, 2003, just over 45,000 members were covered under the Plan. In addition to Dependants' Insurance, members were insured as estimated below:

Premiums and Benefits

Premiums paid into the Plan during 2003 are shown in the following table and are compared with the amount paid out to claimants or set aside as reserves.

Reserves

When a disability claim is received, sufficient funds are set aside to pay all future monthly benefit installments to the claimant. These funds are referred to as "reserves". As of December 31, 2003, plan reserves totaled $169.2 million.

Surplus/Deficit

Most of the lines of insurance under the Plan were in a surplus position at year end. As anticipated, the LTD premium rate increase that went into effect on January 1, 2003, returned the benefit line to a surplus position. The Plan, as a whole, had a surplus of $22 million at year end.

Plan Disbursements

The total amount paid out of the plan during the year was $45.1 million. Of this amount, 92.2% was paid in the form of benefits to plan members and their families, 4.6% was for expenses, and 3.2% was for premium taxes.

Premium Rate Changes

The Treasury Board approved the Board of Trustees' recommendation that there be no change to existing rate levels in effect as of January 1, 2003.

Further Information

If you have questions about your coverage under the Plan or need general information about the benefits available, please contact your compensation advisor or visit the Treasury Board of Canada Secretariat's Web site. 

If you would like to have further information on the general experience and operations of the Plan, please contact:

Terry Ranger, Secretary
Board of Trustees
Public Service Management Insurance Plan
6^th floor, West Tower
300 Laurier Avenue West
Ottawa, Ontario K1A 0R5
e-mail: Ranger.Terry@tbs-sct.gc.ca