The PPMP at a Glance

The PPMP at a Glance

RETURN OF THE PPMPMEMBERS’ FUND IN 2012The PPMP members’ fund generated a return of 9.2%in 2012, which is more than the 6.25% anticipated in themost recent actuarial valuation of the PPMP. The funds areinvested in the Caisse de dépôt et placement du Québec(CDP) in 12 different asset classes such as bonds, realestate investments, Canadian equity funds, etc.

Each of these categories generated a positive returnin 2012. The stock markets obtained the best results lastyear; for example, the United States stocks, with a returnof 13.5%, and the emerging markets’ stocks, whichincreased to 15.8%. The return on the fixed-interestsecurity was more modest, the bonds having returned4.3% in 2012.

Return of the PPMP members’ fund over thelast 10 yearsFrom 2003 to 2012, the PPMP members’ fund generated anaverage return of 6.7% per year. It was an important factorin the growth of the fund, increasing from 4.9 billionin 2003 to 7.8 billion in 2012.

Evolution of return from 2003 to 2012(percentage)

Evolution of fund 302 – PPMP(billions of dollars)

TO CONTACT USOn Internetwww.carra.gouv.qc.ca

By phone418 643-4881 (Québec area)1 800 463-5533 (toll free)

Persons with a hearing impairment418 644-8947 (Québec area)1 855 317-4076 (toll free)

By fax418 644-8659

In person or by mailIf you wish to meet with a staff member, we recommend that youphone to make an appointment. You can also write us or come tothe reception desk at the following address:

Commission administrative des régimesde retraite et d’assurances475, rue Saint-AmableQuébec (Québec) G1R 5X3

You can also see your employer who will guide you through theprocess.

The information contained in this newsletter is of a general natureand does not supersede the legal provisions of the act that governsyour plan or its regulations.

© Gouvernement du Québec, 2013

Printed on Rolland Enviro 100, contains 100% of post consumer fiber, certified EcoLogo andmanufactured using biogas energy.

SUBSCRIBE TO CARRA’SELECTRONIC MAILING LIST

Subscribe to CARRA’s electronic mailing list to receive newsregarding the various pension plans. The mailing list isavailable on our website under “Mailing list” at the followingaddress: www.carra.gouv.qc.ca/liste.

Mr. Jacques Racine Président

Mr. Patrick Bessette Ministère de la Santéet des Services sociaux

Mrs. Anne-Marie Chiquette APER santé et services sociauxMrs. Nadyne Daigle Regroupement des associations

de cadres en matière d’assuranceet de retraite

Mr. Réda Diouri Secrétariat du Conseil du trésor

Mrs. Carole Doré Association des cadres supérieursde la santé et des services sociaux

Mr. Guy Émond Ministère des Financeset de l’Économie

Mrs. Marie-Pier Gagnon Secrétariat du Conseil du trésorMr. Gérard Grégoire Représentant des retraitésMr. François Jean Association des gestionnaires

des établissements de santéet de services sociaux

Mrs. Josée Lamontagne Coalition de l’encadrement enmatière de retraite et d’assurance

Mrs. Christiane Laroche Secrétariat du Conseil du trésorMrs. Isabelle Marcotte Secrétariat du Conseil du trésorMr. Michel Montour Secrétariat du Conseil du trésorMrs. Line Pineau Association des cadres

des collèges du QuébecMrs. Carole Roberge Alliance des cadres de l’ÉtatVacant position

MEMBERS OF THE PPMPPENSION COMMITTEE

A newsletter for the members and pensioners of thePension Plan of Management Personnel (PPMP)

March 2013

Bulletin_coup_oeil_2013-04-02_v1.0_ang:Bulletin Coup d'oeil RRPE 02/04/13 14:28 Page 1

IMPLEMENTATION OFA COMPENSATION FORTHE CONTRIBUTION RATEOnce assented, this law introduced the payment of an annualcompensation by employers. For employers who do not paycontributions, the compensation is assumed by the government.

This measure was implemented in order to limit the increase ofthe contribution rate while avoiding the PPMP’s underfunding. Inaddition to its usual commitments, the government will thus payan annual compensation directly in the PPMP members’ fund inorder to make up the difference between the contributions paidby the members and the contributions needed to finance theplan, according to the most recent actuarial valuation, and this,since 2012, until 2016 inclusively.

Therefore, if this measure had not been implemented, thecontribution rate of 12.30% applied since 2012, would be of12.84%.

THE REDUCTION PERCENTAGEOF THE ANTICIPATED DEFERREDPENSIONFollowing a regulatory amendment consecutive to the assent ofthe L.Q. 2012, c.6, a reduction of 0.33% per anticipated month(4% per year) will be applied to all anticipated deferred pensionsthat will be paid starting on July 1, 2013.

MEMBER’S ANNUAL STATEMENTMore than two-thirds of PPMP members have received this newstatement, which is a precious source of information to help youadequately plan your retirement. The document shows thedetails of your participation in the PPMP and informs you of thebenefits to which you could be entitled when you retire or whenyour employment ends.

If you did not receive your annual statement, CARRA can offeryou a Statement of Contributions, or a Pension Estimate if youare less than 14 months away from the date you plan to retire.The future mailing of the statements should be in 2014.

If you wish to know more about the member’s statement,consult CARRA’s website under Documentation → Publicationpour les participants.

Evolution of the number of members in relation to the numberof beneficiaries:

The PPMP’s demographic profile changes rapidly. It is notsurprising, and this evolution had been predicted by actuarialvaluations which serve to establish the members’ contributionrate. The demographic profile is more of a challenge when itconcerns the variation of the contribution rate, since the earningsand losses must be absorbed by an ever decreasing proportionof active members.

The funding policy and the investment policy of the PPMP havebeen developed taking into account this phenomenon and theywill continue to adapt.

INVESTMENT POLICYDuring these last years, the PPMP at a Glance has informed youthat major projects linked to the investment policy are underway. These projects led to the adoption of a new investmentpolicy by the PPMP Pension Committee in June 2012.

Summary of the ProjectsThe Pension Committee is pursuing the objective to stabilize thePPMP’s financial situation and decrease the variation of thecontribution rate for the plan’s active members. The completedprojects have demonstrated that, in order to reach this objective,the return of fund for the members of the plan (asset) should befurther linked to the PPMP’s engagement under theresponsibility of these people (liability). It is what the PensionCommittee calls management of the asset linked to liability.

As the work progressed, the Pension Committee made the2 following findings:

1. For the PPMP’s asset to be linked to its liability, the plan’smembers’ fund should be further invested in long-term bonds.

2. The period is not appropriate to invest in long-term bonds,since the bond rates have reached historical lows. If thoserates were to increase rapidly, the return (based on themarket value) of long-term bonds would be highly negative.

The new investment policyFollowing those findings, the Pension Committee adopted a newinvestment policy, which provides that most of the short andlong-term bonds held by the PPMP will be replaced by long-termbonds. However, this operation will only take place when thebond rates are higher. An implementation schedule of thosechanges was created with the CDP and those changes will applyautomatically when certain conditions are met.

These last years have shown us that the economy and financialmarkets change rapidly and are difficult to predict. That is whythe Pension Committee will revalue at least once a year thestrategy chosen, the conditions needed for its deployment aswell as the pace of the implementation schedule.

The PPMP’s investment policy regroups the instructions theCDP must follow in its management of the PPMP members’fund. The main element is the reference portfolio, whichpresents the target asset between the various categories ofassets offered by the CDP. The fund investment policy isdetermined both by the Pension Committee and the CDP.

WHAT IS THE PPMP’SINVESTMENT POLICY?

The Act to Amend the Act Respecting the Pension Plan of Management Personnel and other legislative provisions was assented onMay 3, 2012. The principal amendments are as follows:

• Introduction of an additional membership period for a qualified member of the PPMP (5 more years).• Change in eligibility requirements to a pension (factor 88 (55 years old minimum) changes to factor 90 (age + years of service,

while keeping the 55 years old minimum) and the requirement of 35 years of service with no minimum age is eliminated).• Increase of the reduction rate from 3% to 4% per year of anticipation for an immediate pension without reduction.• Addition of special provisions for compassionate care leave taken under the Act Respecting Labour Standards.• Increase of the maximum age for membership in the plan to 71 years old.• Amendment to the rules governing a return to work by a pensioner.

For more informationFor more information on the legislative modifications, consult the Communiqués-retraite, Volume 36, Numéro 1 (available inFrench only), available on CARRA’s website.

L.Q. 2012, C.6, LEGISLATIVE CHANGES

In 2012, 1 726 PPMP members have retired at an average ageof 58.8. Their average annual pension is $49 600.

RETIREMENTS IN 2012

8 active members 1 beneficiary

2 active members 1 beneficiary

1 active member 1 beneficiary

The PPMP at a Glance The PPMP at a Glance

32

Bulletin_coup_oeil_2013-04-02_v1.0_ang:Bulletin Coup d'oeil RRPE 02/04/13 14:28 Page 2

IMPLEMENTATION OFA COMPENSATION FORTHE CONTRIBUTION RATEOnce assented, this law introduced the payment of an annualcompensation by employers. For employers who do not paycontributions, the compensation is assumed by the government.

This measure was implemented in order to limit the increase ofthe contribution rate while avoiding the PPMP’s underfunding. Inaddition to its usual commitments, the government will thus payan annual compensation directly in the PPMP members’ fund inorder to make up the difference between the contributions paidby the members and the contributions needed to finance theplan, according to the most recent actuarial valuation, and this,since 2012, until 2016 inclusively.

Therefore, if this measure had not been implemented, thecontribution rate of 12.30% applied since 2012, would be of12.84%.

THE REDUCTION PERCENTAGEOF THE ANTICIPATED DEFERREDPENSIONFollowing a regulatory amendment consecutive to the assent ofthe L.Q. 2012, c.6, a reduction of 0.33% per anticipated month(4% per year) will be applied to all anticipated deferred pensionsthat will be paid starting on July 1, 2013.

MEMBER’S ANNUAL STATEMENTMore than two-thirds of PPMP members have received this newstatement, which is a precious source of information to help youadequately plan your retirement. The document shows thedetails of your participation in the PPMP and informs you of thebenefits to which you could be entitled when you retire or whenyour employment ends.

If you did not receive your annual statement, CARRA can offeryou a Statement of Contributions, or a Pension Estimate if youare less than 14 months away from the date you plan to retire.The future mailing of the statements should be in 2014.

If you wish to know more about the member’s statement,consult CARRA’s website under Documentation → Publicationpour les participants.

Evolution of the number of members in relation to the numberof beneficiaries:

The PPMP’s demographic profile changes rapidly. It is notsurprising, and this evolution had been predicted by actuarialvaluations which serve to establish the members’ contributionrate. The demographic profile is more of a challenge when itconcerns the variation of the contribution rate, since the earningsand losses must be absorbed by an ever decreasing proportionof active members.

The funding policy and the investment policy of the PPMP havebeen developed taking into account this phenomenon and theywill continue to adapt.

INVESTMENT POLICYDuring these last years, the PPMP at a Glance has informed youthat major projects linked to the investment policy are underway. These projects led to the adoption of a new investmentpolicy by the PPMP Pension Committee in June 2012.

Summary of the ProjectsThe Pension Committee is pursuing the objective to stabilize thePPMP’s financial situation and decrease the variation of thecontribution rate for the plan’s active members. The completedprojects have demonstrated that, in order to reach this objective,the return of fund for the members of the plan (asset) should befurther linked to the PPMP’s engagement under theresponsibility of these people (liability). It is what the PensionCommittee calls management of the asset linked to liability.

As the work progressed, the Pension Committee made the2 following findings:

1. For the PPMP’s asset to be linked to its liability, the plan’smembers’ fund should be further invested in long-term bonds.

2. The period is not appropriate to invest in long-term bonds,since the bond rates have reached historical lows. If thoserates were to increase rapidly, the return (based on themarket value) of long-term bonds would be highly negative.

The new investment policyFollowing those findings, the Pension Committee adopted a newinvestment policy, which provides that most of the short andlong-term bonds held by the PPMP will be replaced by long-termbonds. However, this operation will only take place when thebond rates are higher. An implementation schedule of thosechanges was created with the CDP and those changes will applyautomatically when certain conditions are met.

These last years have shown us that the economy and financialmarkets change rapidly and are difficult to predict. That is whythe Pension Committee will revalue at least once a year thestrategy chosen, the conditions needed for its deployment aswell as the pace of the implementation schedule.

The PPMP’s investment policy regroups the instructions theCDP must follow in its management of the PPMP members’fund. The main element is the reference portfolio, whichpresents the target asset between the various categories ofassets offered by the CDP. The fund investment policy isdetermined both by the Pension Committee and the CDP.

WHAT IS THE PPMP’SINVESTMENT POLICY?

The Act to Amend the Act Respecting the Pension Plan of Management Personnel and other legislative provisions was assented onMay 3, 2012. The principal amendments are as follows:

• Introduction of an additional membership period for a qualified member of the PPMP (5 more years).• Change in eligibility requirements to a pension (factor 88 (55 years old minimum) changes to factor 90 (age + years of service,

while keeping the 55 years old minimum) and the requirement of 35 years of service with no minimum age is eliminated).• Increase of the reduction rate from 3% to 4% per year of anticipation for an immediate pension without reduction.• Addition of special provisions for compassionate care leave taken under the Act Respecting Labour Standards.• Increase of the maximum age for membership in the plan to 71 years old.• Amendment to the rules governing a return to work by a pensioner.

For more informationFor more information on the legislative modifications, consult the Communiqués-retraite, Volume 36, Numéro 1 (available inFrench only), available on CARRA’s website.

L.Q. 2012, C.6, LEGISLATIVE CHANGES

In 2012, 1 726 PPMP members have retired at an average ageof 58.8. Their average annual pension is $49 600.

RETIREMENTS IN 2012

8 active members 1 beneficiary

2 active members 1 beneficiary

1 active member 1 beneficiary

The PPMP at a Glance The PPMP at a Glance

32

Bulletin_coup_oeil_2013-04-02_v1.0_ang:Bulletin Coup d'oeil RRPE 02/04/13 14:28 Page 2

The PPMP at a Glance

The PPMP at a Glance

RETURN OF THE PPMPMEMBERS’ FUND IN 2012The PPMP members’ fund generated a return of 9.2%in 2012, which is more than the 6.25% anticipated in themost recent actuarial valuation of the PPMP. The funds areinvested in the Caisse de dépôt et placement du Québec(CDP) in 12 different asset classes such as bonds, realestate investments, Canadian equity funds, etc.

Each of these categories generated a positive returnin 2012. The stock markets obtained the best results lastyear; for example, the United States stocks, with a returnof 13.5%, and the emerging markets’ stocks, whichincreased to 15.8%. The return on the fixed-interestsecurity was more modest, the bonds having returned4.3% in 2012.

Return of the PPMP members’ fund over thelast 10 yearsFrom 2003 to 2012, the PPMP members’ fund generated anaverage return of 6.7% per year. It was an important factorin the growth of the fund, increasing from 4.9 billionin 2003 to 7.8 billion in 2012.

Evolution of return from 2003 to 2012(percentage)

Evolution of fund 302 – PPMP(billions of dollars)

TO CONTACT USOn Internetwww.carra.gouv.qc.ca

By phone418 643-4881 (Québec area)1 800 463-5533 (toll free)

Persons with a hearing impairment418 644-8947 (Québec area)1 855 317-4076 (toll free)

By fax418 644-8659

In person or by mailIf you wish to meet with a staff member, we recommend that youphone to make an appointment. You can also write us or come tothe reception desk at the following address:

Commission administrative des régimesde retraite et d’assurances475, rue Saint-AmableQuébec (Québec) G1R 5X3

You can also see your employer who will guide you through theprocess.

The information contained in this newsletter is of a general natureand does not supersede the legal provisions of the act that governsyour plan or its regulations.

© Gouvernement du Québec, 2013

Printed on Rolland Enviro 100, contains 100% of post consumer fiber, certified EcoLogo andmanufactured using biogas energy.

SUBSCRIBE TO CARRA’SELECTRONIC MAILING LIST

Subscribe to CARRA’s electronic mailing list to receive newsregarding the various pension plans. The mailing list isavailable on our website under “Mailing list” at the followingaddress: www.carra.gouv.qc.ca/liste.

Mr. Jacques Racine Président

Mr. Patrick Bessette Ministère de la Santéet des Services sociaux

Mrs. Anne-Marie Chiquette APER santé et services sociauxMrs. Nadyne Daigle Regroupement des associations

de cadres en matière d’assuranceet de retraite

Mr. Réda Diouri Secrétariat du Conseil du trésor

Mrs. Carole Doré Association des cadres supérieursde la santé et des services sociaux

Mr. Guy Émond Ministère des Financeset de l’Économie

Mrs. Marie-Pier Gagnon Secrétariat du Conseil du trésorMr. Gérard Grégoire Représentant des retraitésMr. François Jean Association des gestionnaires

des établissements de santéet de services sociaux

Mrs. Josée Lamontagne Coalition de l’encadrement enmatière de retraite et d’assurance

Mrs. Christiane Laroche Secrétariat du Conseil du trésorMrs. Isabelle Marcotte Secrétariat du Conseil du trésorMr. Michel Montour Secrétariat du Conseil du trésorMrs. Line Pineau Association des cadres

des collèges du QuébecMrs. Carole Roberge Alliance des cadres de l’ÉtatVacant position

MEMBERS OF THE PPMPPENSION COMMITTEE

A newsletter for the members and pensioners of thePension Plan of Management Personnel (PPMP)

March 2013

Bulletin_coup_oeil_2013-04-02_v1.0_ang:Bulletin Coup d'oeil RRPE 02/04/13 14:28 Page 1