August 22, 2019
On July 9th, 2019, Morneau Shepell Ltd., in its capacity as Plan Administrator, purchased buy-in annuity contracts for the Stelco Inc. Retirement Plan for Salaried Employees at Hamilton Works (the “Plan”) in order to secure 100% of the pension benefit entitlements of all Plan participants (i.e., retirees, beneficiaries, deferred vested members and the accrued benefits for active/transferred participants up until 12.31.2018). The buy-in annuity contracts also protect the benefits of beneficiaries and surviving spouses in the event of the death of the original pensioner where a death benefit is payable based on the form of benefit elected at retirement.
The buy-in annuity contracts* were purchased with 4 reputable, highly rated, Canadian insurers:
- The Canada Life Assurance Company,
- Sun Life Assurance Company of Canada,
- BMO Life Assurance Company, and
- Co-operators Life Insurance Company.
The buy-in annuity contracts are purely a de-risking investment decision of the Plan and the Plan is not being wound up at this time. The decision to wind up the Plan rests with the Financial Services Regulatory Authority of Ontario (known prior to June 8, 2019 as the Financial Services Commission of Ontario). Morneau Shepell will advise all Plan participants when the Plan is being wound up.
The administration of the Plan and its payroll will not change until such time as the Plan is wound-up. As such, for the time being, Morneau Shepell remains the single point of contact and all payments, communication, and any other day-to-day functions related to the administration of the Plan.
What this change means for participants:
- There will be no change to the amount of pension that participants receive or are entitled to receive — Morneau Shepell will continue to administer the Plan and pension payments
- Participants do not need to do anything – Morneau Shepell is taking care of this transition
- The transition will be seamless – there will be no break or interruption in participants’ monthly pension, if they are currently receiving one
- The Plan is not wound up — if the Financial Services Regulatory Authority of Ontario decides to wind up the Plan, Morneau Shepell will be in contact with Plan participants
For questions that are not covered in the Q&A, and in particular member specific questions, you can contact the Stelco Pension Service Centre at Morneau Shepell as follows:
In writing: Morneau Shepell Ltd.
895 Don Mills Road
Tower One, Suite 700
Toronto, ON M3C 1W3
Attn: Stelco Pension Service Centre
* A buy‑in annuity contract is an investment vehicle. Specifically, it’s when an insurance company agrees to cover the pension benefits for a group of participants for the rest of their life in exchange for a premium paid from the Plan’s assets.
To view the Morneau Shepell press release regarding the transaction please click here.