ARCHIVED - 2008 Annual Report of the Board of Trustees of the Public Service Management Insurance Plan (PSMIP)

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What is the PSMIP?

The PSMIP is a group insurance plan established by the Treasury Board of Canada. It provides Long-term Disability (LTD), Life, Accidental Death and Dismemberment (AD&D), and Dependants’ Insurance for federal employees who are excluded from collective bargaining because they are working in managerial or confidential capacities. Executives, parliamentarians, and judges are also covered by the Plan and have distinct benefits. The PSMIP is insured through Industrial Alliance Insurance and Financial Services.

Board of Trustees

A Board of Trustees, appointed by the President of the Treasury Board, monitors the financial operations of the Plan and oversees its administration. The members of the Board on  December 31, 2008 were:

• The Chairperson, Judith LaRocque, Deputy Minister, Canadian Heritage
• Michael Wernick, Deputy Minister, Indian and Northern Affairs
• Suzanne Vinet, Associate Deputy Minister, Health Canada
• Maria Barrados, President, Public Service Commission of Canada
• Linda Lizotte-MacPherson, Associate Secretary, Treasury Board

Scope of the Plan

In 2008 all benefits paid under the plan totaled $57.8 million.  Of this amount, benefits paid to Long Term Disability claimants totaled almost $46.4 million, life insurance benefits amounted to $11.4 million and $3,750 was paid out for Accidental Death and Dismemberment.   

As of December 31, 2008, 50,408 members were covered under the Plan including 36,182 employees excluded from collective bargaining, 7,248 from the executive group, 1,041 judges, 392 members of parliament and 5,545 members under Post-retirement life insurance.  In addition to Dependants’ Insurance, members were insured as estimated below:

Line of Insurance	Amount
Basic Life	$4,387,378,000
Supplementary Life	$1,904,822,000
Accidental Death and Dismemberment (AD&D)	$7,346,640,000
Long-term Disability (LTD)	$3,945,470,000
Post-retirement Life (PRLIP)	$249,532,000

Premiums and Benefits

Premiums paid into the Plan during 2008 are shown in the following table and are compared with the amount paid out to claimants or set aside as reserves. 

Line of Insurance	Premiums	Claims (and Increases to Reserves)	Ratio of Claims to Premiums
Basic Life	$15,792,112	$6,374,035	40.4%
Supplementary Life	$3,069,680	$2,854,301	93.0%
Members’ AD&D	$879,261	-$44,640	-5.1%
Dependants’ Life and AD&D	$342,740	$158,997	46.4%
LTD	$63,266,906	$73,354,843	115.9%
PRLIP	$5,844,465	$1,052,613	18.9%
Total	$89,195,164	$83,750,149	93.9%

Reserves

When a disability claim is received, sufficient funds are set aside to pay all future monthly benefit installments to the claimant. These funds are referred to as “reserves.” As of December 31, 2008 plan reserves totaled $294.3million including life waiver reserves.

Surplus/Deficit

Most of the lines of insurance under the Plan were in a surplus position at year-end. The Plan, as a whole, had a surplus of $34.7million at year end.

Plan Disbursements

The total amount paid out of the plan during the year was $61.2million. Of this amount, 94.2% was paid in the form of benefits to plan members and their families, 3.2% was for expenses, and 2.4% was for premium taxes.

Value of Plan to Member

During 2008, employer costs averaged $1,110 per plan member for disability insurance premiums, $2,904 for Executive life and disability insurance, and $4,747 for Members of Parliament's life and disability.  The following table illustrates the 2008 average employer costs per plan member for Long-Term Disability Insurance, Basic Life, Accidental Death and Dismemberment, Dependants, and Post-Retirement Life Insurance.

	EMPLOYEES EXCLUDED FROM COLLECTIVE BARGAINING		EXECUTIVES	MEMBERS OF PARLIAMENT	JUDGES
Lines of INSURANCE	MAIN PLAN		100% Employer-paid	100% Government-paid
	Employee's share	Employer's share
LTD	$195 (15%)	$1,110 (85%)	$2,106	$2,694	Coverage not available
Basic Life, AD&D and Dependants	$200	$0	$798	$2,053	$5,451
Supplementary Life	$147	$0	Employee paid 1	Employee paid 1	Employee paid1
TOTAL	$542	$1,110	$2,904	$4,747	$5,688
PRLIP	Coverage not available		$862	$1,252	$5,498

¹ Available data does not permit calculation of a representative average.

Recommendations Approved by Treasury Board

The Treasury Board approved the Board of Trustees’ recommendations for the following premium decisions to be effective January 1, 2009:

• 12-month premium holiday for Accidental Death & Dismemberment under the Executive Plan;
• 12-month premium holiday for Dependants’ insurance under the Executive Plan;  and
• 12-month premium holiday for Accidental Death & Dismemberment under the Members’ of Parliament Plan.

Further Information

If you have questions about your coverage under the Plan or need general information about the benefits available, please contact your compensation advisor or visit the Treasury Board of Canada Secretariat’s Web site.

You may also find additional information about your coverage under the Plan in Your Public Service Pension and Benefits Web Portal. This is a one-stop shop for your pension and benefits information.

If you would like to have further information on the general experience and operations of the Plan, please contact:

Ginette Baker, Secretary
Board of Trustees
Public Service Management Insurance Plan
Vanier Building
222 Nepean Street, 5^th floor
Ottawa, Ontario  K1A 0R5
e-mail: Ginette.Baker@tbs-sct.gc.ca