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2004 Annual Report of the Board of Trustees of the Public Service Management Insurance Plan (PSMIP)


Date: December 12, 2005

To: Heads of Human Resources

Subject: 2004 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 2004. 

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

The Chairperson, Judith LaRocque, Deputy Minister, Canadian Heritage

Bill Baker, Commissioner of Firearms, Canada Firearms Centre

Larry Murray, Deputy Minister, Fisheries and Oceans Canada

Maria Barrados, President, Public Service Commission of Canada

Alain Jolicoeur, President, Canada Border Services Agency

Michael Wernick, Deputy Secretary to the Cabinet, Privy Council Office

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.

 

Phil Charko

Assistant Secretary
Pensions and Benefits Sector


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

2004 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 the Industrial Alliance Group of Companies (formerly National Life Assurance Company 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:

  • The Chairperson, Judith LaRocque, Deputy Minister, Canadian Heritage
  • Bill Baker, Commissioner of Firearms, Canada Firearms Centre
  • Larry Murray, Deputy Minister, Fisheries and Oceans Canada
  • Maria Barrados, President, Public Service Commission of Canada
  • Alain Jolicoeur, President, Canada Border Services Agency
  • Michael Wernick, Deputy Secretary to the Cabinet, Privy Council Office

Scope of the Plan

Since its inception in 1968, the Plan has paid $600 million in cash benefits under the various classes of insurance to 11,997 members and their beneficiaries. As of December 31, 2004, just under 46,000 members were covered under the Plan. In addition to Dependants' Insurance, members were insured as estimated below:

Line of Insurance

Amount

Basic Life

$3,526,908,000

Supplementary Life

$1,665,496,000

Accidental Death and Dismemberment (AD&D)

$6,567,762,000

Long-term Disability (LTD)

$3,205,712,000

Post-retirement Life (PRLIP)

$158,841,000

Premiums and Benefits

Premiums paid into the Plan during 2004 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 (and 
Increases to Reserves)

Ratio of Claims 
to Premiums

Basic Life

$12,918,035

$8,607,279

66.6%

Supplementary Life

$2,543,454

$2,990,334

117.6%

Members' AD&D

$864,930

$378,337

43.7%

Dependants' Life and AD&D

$323,105

$285,725

88.4%

LTD

$42,951,347

$51,743,102

120.5%

PRLIP

$3,239,402

$1,685,216

52.0%

Total

$62,840,273

$65,689,993

104.5%

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, 2004, plan reserves totaled $186.9 million.

Surplus/Deficit

Most of the lines of insurance under the Plan were in a surplus position at year end. The Plan, as a whole, had a surplus of $26.8 million at year end.

Plan Disbursements

The total amount paid out of the plan during the year was $48.6 million. Of this amount, 93.7% was paid in the form of benefits to plan members and their families, 4.1% was for expenses, and 2.2% was for premium taxes.

Recommendations Approved By Treasury Board

The Treasury Board approved the Board of Trustees' recommendations for the following premium decisions to be effective January 1, 2005.

  • 12-month premium holiday for Basic Life under the Main Plan.
  • 12-month premium holiday for Accidental Death & Dismemberment under the Main Plan.
  • 12-month premium holiday for Basic Life under the Executive Plan.
  • 12-month premium holiday for Accidental Death & Dismemberment under the Executive Plan.
  • 12-month premium holiday for Dependants' insurance under the Executive Plan.
  • 12-month premium holiday for Accidental Death & Dismemberment under the Members' of Parliament Plan.

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
6th floor, West Tower
300 Laurier Avenue West
Ottawa, Ontario  K1A 0R5
e-mail: Ranger.Terry@tbs-sct.gc.ca