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Description of the Pension PlanThe following general description of the Pension Plan for Clergy and Lay Workers of the Evangelical Lutheran Church in Canada [the “Pension Plan”] is a summary only. For more complete information, reference should be made to the Registered Pension Plan document below. GeneralThe Pension Plan is a defined contribution plan for active clergy and lay workers of the Evangelical Lutheran Church in Canada [“ELCIC”], its congregations, related institutions and agencies. It is registered with Canada Revenue Agency and as a Multi-Unit Pension Plan under the Alberta Employment Pensions Plan Act. The Pension Plan is a Registered Pension Trust as defined in Section 149(1)(o) of the Income Tax Act, Canada.AdministrationELCIC Group Services Inc [“GSI”] is the Administrator of the Pension Plan. GSI is managed by a Board of ten Directors. GSI has engaged an Executive Director and support staff to handle day-to-day administrative matters. GSI has also engaged the services of investment fund managers, as well as a trustee and custodian.Members’ Accumulation AccountA portion of the Pension Plan’s assets is held in the Members’ Accumulation Account [“MAA”] for the credit of the individual members’ accounts. At any point in time, the aggregate individual members’ account balances equal the value of the assets in the MAA. Pension contributions [both member and employer contributions] are recorded as they are received for each active member.The assets of the MAA are held in Balanced Fund (by default) and / or the Retirement Transition Fund (starting January 2010), based on the investment decision made by the member. The assets of these funds are held in trust by the Pension Plan’s custodian. Investment management firms have been hired to invest the assets in each of these funds based on the Pension Plan’s Statement of Investment Policies and Procedures (“SIP&P”). The SIP&P includes a benchmark for each fund, which is a model portfolio intended to achieve the stated objectives with the appropriate risk and is used to measure the performance of the investment managers. The performance monitoring is contracted to an independent consulting firm that provides quarterly reporting to the plan administrator. Investment income (loss) earned is allocated to members’ accounts based on the actual dollar weighted rate of return, net of fees, expenses and charges on the combined investments for each month. Retired Benefit AccountThe Retired Benefit Account [“RBA”] holds the remaining assets of the Pension Plan. Prior to July 1, 2003, the Pension Plan entered into annuity contracts with plan members upon their retirement to provide the retirees with a fixed monthly pension income. An actuarial valuation is carried out to determine the required reserve for the retirees’ annuity commitments.Funding Policy - MAABoth Pension Plan active members and their respective employers contribute to the members’ pension account at a specified contribution rate applied to the member’s ‘salary basis’ (defined in the registered Pension Plan document).Member contribution rate is 5%. Employer contribution rate is 5%. The member (but not the employer) may make voluntary contributions. Both required and voluntary pension contributions from the member must be made by means of payroll deduction. The combined contributions of a member and the employer cannot exceed the maximum as defined under the Income Tax Act from time to time. Member contributions to the Pension Plan are tax deductible, subject to the limitations in the Income Tax Act. Funding Policy - RBAEach employer remits an additional contribution, which is allocated to the RBA. The contribution is required to settle the unfunded liability as determined by the Pension Plan’s actuary for the retirees’ annuity commitments.Employer contribution rate is 6% of ‘salary basis’ for active Pension Plan members and 6% of salary or wages (including supply services) paid to clergy who are not active Pension Plan members. VestingMembers are entitled to the entire accumulated balance in their account in the event of termination, retirement or death. This amount includes member contributions, employer’s allocated contributions plus investment income (loss) allocated to that date.TransfersMembers may apply to transfer the balance accumulated in their account when they cease to be employed by a participating employer and in the case of clergy, the roster status is retired or removed. However, such transfers are subject to lock-in provisions [i.e. amount that cannot be received in cash].Death benefitIf a member dies before retirement, the account balance could be transferred on a locked-in basis or used to purchase a life annuity for the pension partner from an authorized financial institution. Either an immediate or deferred annuity may be chosen, but if deferred then payment must commence no later than December 31 of the year in which the pension partner attains age 71. The value of voluntary contributions may be used as described above, or paid to the pension partner in a lump sum. If the member does not have a pension partner, the value of the account will be paid in a lump sum to the named beneficiary, if any, and otherwise to the estate of the deceased.RetirementAt retirement, the accumulated account balance is available to purchase a retirement income payable from outside the Pension Plan fund. There are a number of retirement income options available, which vary based on the pension jurisdiction in which the member last worked.Retirement income options describedThe following is a brief description of various types of options. The availability varies by jurisdiction. LIF – A Life Income Fund (LIF) is a type of RRIF under which the owner of the LIF must withdraw, each year, a minimum amount up to a maximum amount prescribed by the pension legislation. Depending of the province of employment, the owner may have to use the balance of the funds when he/she reaches the age of 80 to purchase a life annuity. LIRA –A Locked-In Retirement Account (LIRA) is a type of RRSP where the funds are subject to pension legislation. These funds must be used to purchase a life annuity or be transferred to a LIF or an LRIF by the end of the year during which the owner of the LIRA reaches age 71, at the latest. Locked-in RRSP– A locked-in Registered Retirement Savings Plan is a type of RRSP where the funds are subject to pension legislation. These funds must be used to purchase a life annuity or be transferred to a LIF by the end of the year during which the owner of the locked-in RRSP reached age 71, at the latest. LRIF – A Locked-in Retirement Income Fund (LRIF) is a type of RRIF under which the owner of the LRIF must withdraw each year a minimum amount up to a maximum amount prescribed by the pension legislation. As opposed to a LIF, the purchase of an annuity at age 80 is not required. RRIF – A Registered Retirement Income Fund (RRIF) is an arrangement under which the owner of the RRIF must withdraw each year, a minimum amount prescribed by the Income Tax Act (Canada).
The attached document below is the complete pension text: ELCIC Pension Plan text Jan 1 2008 Statement of Investment Policies and Procedures
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