Below is the communication posted on IO by CBC/ Radio-Canada today, December 15, 2023
Following my November message on this topic, I’m sharing another update on the Pension Plan surplus to let you know where we stand and to clarify a few points in response to comments and questions raised since then.
Where do the surplus assets reside?
To begin, the surplus assets available for distribution as per the 2009 Memorandum of Agreement (MOA) are entirely within the CBC Pension Plan. The surplus consists of contributions made over the years by CBC/Radio-Canada and its employees, as well as the growth and returns earned on those contributions. Pension Plan funds are completely separate from the funds used to finance CBC/Radio-Canada’s business operations budget, and, therefore, it is not possible to transfer any portion of this surplus to alleviate the financial pressures that we are facing.
However, the employer pension contribution holiday that was required under the Income Tax Act has helped the Corporation face its financial challenges and reduce the impact on its programming and its people.
Impact of the proposal on the funded status of the Pension Plan
There have also been concerns expressed about how the proposed withdrawal and distribution of funds might affect the long-term status of the Pension Plan.
The short answer is that it will not.
The current surplus assets being proposed for distribution were determined following the actuarial valuation reports for the Pension Plan as of December 31, 2021, and again as of December 31, 2022. The 2009 MOA is subject to regulatory requirements ensuring that the withdrawal of surplus assets for distribution does not affect the long-term funding of the Pension Plan.
In a nutshell, the Pension Plan holds more than enough assets to meet the long-term obligations of the Plan which remains in a healthy position and Plan members can feel confident about their pension. For details and regular updates on the Plan, please consult the annual reports and quarterly communiqués posted on the CBC Pension Plan website.
Latest status regarding ballots and required consent
As of December 15, we have received the required number of ballot forms from inactive Plan members (retirees, surviving spouses and deferred members) indicating that they are in favour of the distribution of assets. This is good news as the Office of the Superintendent of Financial Institutions (OSFI), the pension regulator, requires that two-thirds of all inactive Plan members and two-thirds of employees who are active Plan members give their consent to the pension surplus payout. We also have received the unions’ consent on behalf of their members, thus achieving the two-thirds threshold for active Plan members.
The next step now involves sending out a second notice to all active and inactive Plan members. These will be sent in January, indicating that consent requirements have been met and that CBC/Radio-Canada is now seeking OSFI’s consent for a withdrawal of surplus assets from the Plan.
Distribution of assets
Subject to obtaining consent from OSFI, the objective remains to have surplus distribution payments issued by the spring of 2024. This timeline remains subject to change in the event of other unforeseen circumstances.
The distribution of surplus assets will be done by way of lump-sum payments. This means the payments will be subject to applicable withholding taxes and deductions. The option will exist for employees to transfer their surplus share (in whole or in part) to the Group RRSP if their RRSP deduction limit is not less than the amount to be transferred. More on the Group RRSP can be found on this page.
As stated in the first Notice, the maximum amount of surplus assets to be withdrawn from the Fund under the proposal is $130,741,000. However, we are still working on the calculation of individual entitlements based on contributions made to the plan by each and every eligible Plan member. This will be shared in the new year.
Thank you for your continued patience regarding this complex process, and thanks to those who submitted a ballot. I will provide another update in the new year. Until then, If you have any general questions or concerns about the Pension Plan, contact the Pension Administration Centre, but please keep in mind that they do not have access to more information than what I’ve provided here as it relates to the proposed distribution of Pension assets.