Submitted January 2007 (originally published in MURAnews)
We are seeing an ongoing struggle to reach a point at which any
improvements to pensioners can be made. Since changing to the new fund
managers of Jarislowsky Fraser Limited, the fund had started to show
some gains that had been promising; however the recent slump in stock
market gains has caused reversals that have necessitated higher costs
and may possibly require some plan changes. The cost formula and return
calculations can be found in the following sections.
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 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
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
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°%