DATE: November 2001
Attached is a copy of the report of the Board of Trustees on the operations
and financial results of the Plan during 2000.
Please ensure that this report is made available to employees who participate
in the Plan.
For additional information on the PSMIP, Chiefs of Compensation at the
corporate level may call Karen MacGregor at (613) 957-7189
Board of Trustees of the Public Service Management Insurance Plan (PSMIP) -
Report to Members on the Financial Results of the Plan - 2000
Who is covered by the Plan?
As of December 2000, the PSMIP included 3 separate sub-plans. The Main Plan
provides optional, employee-paid Life, Accidental Death and Dismemberment and
Dependants' Insurance for excluded employees and certain designated groups. It
also provides Long-term Disability Insurance for all plan members other than
Judges. The Executive and Parliamentarians Plans provide government-paid Life,
Accidental Death and Dismemberment, Dependants' and Post-retirement Life
Insurance for eligible members.
Board of Trustees
A Board of Trustees, appointed by the President of the Treasury Board,
monitors the operations of the Plan to ensure that the benefits are paid at the
least possible cost to the membership. The current members of the Board are:
The Chairperson, Scott Serson, President, Public Service Commission
Jane, Roszell, Chief Executive Officer, Canadian Forces Housing Agency
Nicole Jauvin, Deputy Solicitor General
Bill Baker, Assistant Commissioner, Canada Customs and Revenue Agency
Larry Murray, Deputy Minister, Veterans Affairs Canada
Judith LaRocque, Associate Deputy Minister, Canadian Heritage
Scope of the Plan
Since its inception in 1968, the Plan has paid $446.1 million in cash
benefits under the various classes of insurance to 10,255 members and their
beneficiaries. As of December 31, 2000, approximately 40,000 members were
covered under the Plan. In 'Insurance, members were insured as estimated below:
Line of Insurance
|
Amount
|
Basic Life
|
$2,402,037,000
|
Supplementary Life
|
$1,312,195,000
|
Accidental Death and Dismemberment (AD&D)
|
$5,708,438,000
|
Long-term Disability (LTD)
|
$2,265,764,000
|
Post-Retirement Life (PRLIP)
|
$95,053,000
|
Premiums and Benefits
Premiums paid into the Plan during 2000 are shown in the following table and
are compared with the amount paid out to claimants or set aside as reserves.
This table does not include interest earnings or plan operation expenses. It
should be noted that due to administrative variations, only 11 months of
premiums were received between January 1, and December 31, 2000.
Line of Insurance
|
Premiums
|
Claims (& Increases to Reserves)
|
Ratio of Claims to Premiums
|
Basic Life
|
$5,885,053
|
$4,767,982
|
81.1%
|
Supplementary Life
|
$2,349,500
|
$1,330,050
|
56.6%
|
'AD & D |
$536,129
|
$615,355
|
114.8%
|
'Life and AD & D |
$265,737
|
$163,710
|
61.6%
|
LTD
|
$26,664,136
|
$36,290,396
|
136.1%
|
PRLIP
|
$1,748,243
|
$432,855
|
24.8%
|
TOTAL
|
$37,448,798
|
$43,600,350
|
116.4%
|
Reserves and Surplus
Plan members who become totally disabled may be eligible for benefits until
they reach their 65th birthday. To ensure that sufficient funds
will be available to pay all future benefits to members and their beneficiaries,
a lump sum amount is set aside each time a disability claim is approved. These
funds are referred to as "reserves". As of December 31, 2000, plan
reserves totaled $141 million. In addition, most of the lines of insurance under
the Plan held an accumulated surplus. Total plan surplus at the end of 2000 was
$41.8 million.
Plan Disbursements
The total amount paid out of the plan during the year was $32.1 million. Of
this amount, 92.5% was paid in the form of benefits to plan members and their
families, 5.6% was for expenses and 1.9% was for premium taxes.
Recommendations Approved By Treasury Board
The Treasury Board approved the Trustees' recommendations for the following
changes effective April 1, 2001.
- A 9-month premium holiday for Basic Life Insurance under the Main Plan
- A 9-month premium holiday for Basic Life, Accidental Death and
Dismemberment, and Dependants' Insurance under the Parliamentarians Plan
- A 33% decrease in the monthly premium rate for Long-term Disability
Insurance.
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 TBS web site.
|