Welcome to 2008. As we move into yet another year we may have some trepidation as to what the new year will have in store for us.

Firstly, I would like to wish all of the McMaster pensioner community a very happy and healthy year, a year that will see our various dreams fulfilled. I personally do not find a lot of time to spend dreaming. Hopefully most of you have found fulfillment in perhaps hobbies, volunteering or, maybe in the warmer days, spending time in the garden or on the beach or in the park.

For any of these things to be possible, we all rely on our pensions which we all see shrinking in respect of our daily living expenses. From experience I have watched particularly our hourly pension remain static for the last five years due to the poor rate of returns on our pension plan investments. However, despite my pessimism of a year ago, the plan has done relatively well and due to this we are able to receive a 1.24% increase in our pensions.

This only equates to an added few dollars to our monthly cheques. At this time however, being positive, we can only hope that the investment plan may continue in a growth mode permitting the plan to produce added benefits for us all in the years ahead. Our pension plan has an indexing formula tied to the C.P.I. (Consumer Price Index). This formula is selected as a preferred method of determining the escalation of our cost of living, on a general basis, but not including many of our everyday needs. Due to this, even if we are able to attain full C.P.I. indexing it will leave us lagging behind, so go into the new year with joy and hopes for another successful year in the life of your pension plan, that you may see enhanced benefits in the years to come.

Clifford Andrews

A NOTE TO THE HOURLY McMASTER PENSIONERS
(May 2007)
from Cliff Andrews
MURA Observer on the Hourly Pension Plan Retirement Committee

There not being a huge turnout of the hourly ranks at the recent MURA annual general meeting, it was considered prudent that we put a few lines in the Newsletter and on the MURA website regarding your pension plan. Pensions of course are one of our main concerns during this part of our lives.
One of the biggest concerns is “will my pension plan remain in place for me?” Whilst one might get struck by lightning it would be most unlikely that our pensions and benefits would fail. While realizing we sometimes read of difficulties with some plans, this should not happen to our plan because pension and benefit plans are highly regulated in Ontario with many controls in place.
Your plan is held by McMaster University (being the plan holder). This is overseen by a committee of university members, and union representatives selected by the union members. This committee meets a minimum of four times per year to review the plan and its financial results. This committee is responsible for the plan’s well being, which due to recent declines in the investment market has left the plan quite short in its planned well being. This has meant that there have been no surplus funds to provide members with any improved benefits such as indexing, bridging or any other desirable improvements. This has also caused the University to invest much larger sums into the plan to keep it adequately funded. We are hoping to see a turnaround in the markets in the near future to reverse these matters. In conjunction with the committee, the plan uses the services of an actuary. This is a company that specializes in the statistical aspects of the pension, giving advice on such things as pension laws and financial planning and investments.

As well as this the plan has regulation and control from a number of bodies including the Canada Revenue Agency, The Financial Services Commission of Ontario, plus legal oversight.

With all of this looking after your pension plan, I hope that you may rest assured that your pension plan will remain safe, providing some well deserved income as we enjoy our Golden years.

With this said, I would urge you to read your MURA newsletters and perhaps enjoy some of the events that are provided for all of the former staff of McMaster. By keeping in touch we can better serve you all.

Potential Pension Increase Formula
The pension increase formula takes into consideration the five-year average rate of return earned on the assets of the Plan over 6%, subject to a maximum of the average consumer price index. This year's five-year average rate of return was 4.35% as of June 30,2006. As the average was less than 6%, the formula did not result in a pension increase for January 1, 2007.

Employee Contributions
Employee contributions earn interest based on the Pension Fund's five-year average rate of return. The interest formula is calculated in accordance with the Plan text, and reviewed by our external auditors. For the period ending June 30, 2006, these contributions earned 4.35%.

Calculation of Five Year Average

For your information, the rate of return for the past five years, and the five-year average rate of return calculation as of June 30, 2006, are as follows:

2006 Rate of Return 2.99%

2005 Rate of Return 11.09%

2004 Rate of Return 13.04%

2003 Rate of Return (2.94)%

2002 Rate of Return - 6 months (Jan. 1, 2002, to June 30, 2002) (5.05)%

2001 Rate of Return - 6 months (July 1, 2001, to Dec. 31, 2001) 2.64%

Total Return for Last Five Years 21.77%

Five Year Annual Average Return 4.35°%