BOARD OF TRUSTEES OF THE PUBLIC SERVICE
MANAGEMENT INSURANCE PLAN
(PSMIP)
2002 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 National Life
Assurance Company of Canada is the principal insurer ("the Insurer")
for the Plan.
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:
The Chairperson, Scott Serson, President, Public Service Commission
Jane Roszell, Chief Executive Officer, Canadian Forces Housing Agency
Nicole Jauvin, Deputy Solicitor General
Bill Baker, Commissioner of Firearms, Canada Firearms Centre
Larry Murray, Deputy Minister, Fisheries and Oceans Canada
Judith LaRocque, Deputy Minister, Canadian Heritage
Scope of the Plan
Since its inception in 1968, the Plan has paid $517.4 million in cash
benefits under the various classes of insurance to 11,068 members and their
beneficiaries. As of December 31, 2002, approximately 44,000 members were
covered under the Plan. In addition to Dependants' Insurance, members were
insured as estimated below:
|
Line of Insurance
|
Amount
|
|
Basic Life
|
$3,168,147,000
|
|
Supplementary Life
|
$1,545,599,000
|
|
Accidental Death and Dismemberment (AD&D)
|
$6,318,590,000
|
|
Long-term Disability (LTD)
|
$2,771,644,000
|
|
Post-Retirement Life (PRLIP)
|
$111,306,000
|
Premiums and Benefits
Premiums paid into the Plan during 2002 are shown in the following table and
are compared with the amount paid out to claimants or set aside as reserves.
|
Line of Insurance
|
Premiums
|
Claims (& Increases to Reserves)
|
Ratio of Claims to Premiums
|
|
Basic Life
|
$11,429,286
|
$7,328,042
|
64.1%
|
|
Supplementary Life
|
$2,353,621
|
$2,553,840
|
108.5%
|
|
Members' AD & D
|
$812,031
|
$179,895
|
22.2%
|
|
Dependants' Life and AD & D
|
$307,112
|
$166,728
|
54.3%
|
|
LTD
|
$23,698,432
|
$42,979,234
|
181.4%
|
|
PRLIP
|
$2,060,627
|
$918,065
|
44.6%
|
|
TOTAL
|
$40,661,109
|
$54,126,344
|
133.1%
|
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, 2002, plan
reserves totaled $170.4 million.
Surplus/Deficit
While most of the lines of insurance under the Plan were in a surplus
position at year-end, the LTD portion experienced a deficit. It is
anticipated that this situation will be addressed by the premium rate increase
that went into effect on January 1, 2003. The plan, as a whole, had a
surplus of $9.5 million at year-end.
Plan Disbursements
The total amount paid out of the plan during the year was $43.1 million. Of
this amount, 92.9% was paid in the form of benefits to plan members and their
families and 7.1% was for expenses, including premium taxes.
Premium rate Changes
The Treasury Board approved the Board of Trustees' recommendation that the
monthly LTD premium be increased from $0.70 to $1.12 per $1,000 of insured
salary, effective January 1, 2003. The employer will continue to pay 85%
of the premium for excluded employees and the full premium for members of the
Executive group and other senior managers entitled to employer-paid coverage.
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 at http://www.tbs-sct.gc.ca/hr-rh/bp-rasp/benefits-avantages/mip-racg/mip-racg_e.asp
If you would like to have further information on the general experience and
operations of the Plan, please contact
Beverly Bell, Secretary
Board of Trustees
Public Service Management Insurance Plan
5th floor, West Tower
300 Laurier Avenue West
Ottawa, Ontario, K1A OR5
Bell.Bev@tbs-sct.gc.ca
|
