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2 0 1 5A N N U A L R E P O R Tof the Pension Plan of The United Church of Canada

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Investing responsibly is a long-standing priority for the pension fund.

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LEARN MORE united-church.caSEARCH“pension” PENSION PLANABOUT YOUR

MESSAGES TO THE MEMBERSHIP 4

YEAR IN REVIEW 12

FINANCIALS 17

IN MEMORIAM 21

http://www.united-church.ca/leadership/church-administration/pension

76 Average age of pensioners

Number of active members3,560 2,000 ministry personnel

1,560 lay members

Active: currently employed by the United Church Child pensioner: dependent child who has lost a parent Pensioner: receiving pension Deferred: has earned a pension but is not yet receiving itActive: currently employed by the United Church Child pensioner: dependent child who has lost a parent Pensioner: receiving pension Deferred: has earned a pension but is not yet receiving it

Number of pensioners (+26 child pensioners)

4,570Deferred members1,230

Pensioners over age 90

over age 100!

Membersretired in 2015 265

2015: $61,909,000 2014: $61,509,000

FAST FACTSPENSION PLANABOUT

YOURAs at December 31, 2015

Membersjoined in 2015244

6453.5

Average age of plan members at retirementAverage age of active members

275

2

Active membersover age 65

155including

Includes refunds and death bene�ts

ESG environmental, social, and governance practices

4Annual Report of the Pension Plan 2015

MESSAGES TO THE MEMBERSHIP

From the Moderator and General Secretary

We are pleased to share with you the 2015 Annual Report of the Pension Plan of The United Church of Canada. Thanks for the gifts and skills you bring to our church, as we work together to live out the teachings of Jesus in the world.

Last summer, the 42nd General Council called for the Pension Board to review the extent of and rationale for its fossil fuel investments, and to determine if its holdings “align with the Christian imperative of seeking justice, resisting evil, and living with respect in Creation.”

Investing responsibly is a long-standing priority for the pension fund of The United Church of Canada. With particular attention recently on climate change and, in particular, fossil fuels, the board is working hard to balance in both the short and the long term its ethical responsibilities with its duty to provide retirement income to members of the plan.

In addition to working with fund managers holding our assets, the board is aided by the service providers to vote at company annual meetings and to directly engage companies on their environmental, social, and governance (ESG) practices.

We are grateful for the work and dedication of the Pension Board over the past year to ensure that the church’s pension plan remains stable and will continue to meet its obligations to members into the future. We hope this careful stewardship gives you every confidence that your pension is being well and faithfully managed.

Thanks again for your past or ongoing efforts to the church. And may the grace of Jesus Christ and the love of God be with you in the coming year as together we discern where God is calling us.

In faith,

The Right Rev. Jordan Cantwell, Nora Sanders, Moderator General Secretary, General Council

Thanks for the gifts and skills you bring to our church.

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Dear Friends in Christ,

We are undertaking an analysis to better understand the carbon footprint of the fund.

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July 1,2016

McAteer assumes operation of the United Church Benefits Centre

From the Chair of the Pension Board

For the Pension Board, its standing committees, and staff at the General Council Office, 2016 promises to be an eventful year. Allow me to highlight some key initiatives.

Transition to McAteerOn July 1, 2016, the operations of the United Church Benefits Centre will move from AonHewitt to McAteer Employee Benefit Plan Services (www.mcateer.ca). McAteer specializes in multi-employer plans like those of the United Church. It has an experienced, dedicated staff with low turnover.

Investing ResponsiblyWith a continued commitment to responsible investment, the board and its committees have recently taken the following actions:

• As of January 2016, the pension plan became a signatory to the United Nations Principles for Responsible Investment (UN PRI) (www.unpri.org).

• Proxy voting parameters with Glass Lewis were updated to vote more consistently on issues of Indigenous rights and carbon disclosure.

• The pension plan joined a UK investor coalition to file a shareholder resolution calling on Anglo American to increase disclosure of its corporate climate change strategy. (In advance of its annual general meeting, Anglo American agreed to support the proposal.)

• To avoid a shareholder resolution sponsored by the fund, Enbridge agreed to increase disclosure and oversight of its lobbying activities and political contributions.

• The pension plan participated in over 20 engagement opportunities with Shareholder Association for Research & Education (SHARE) on issues including climate change and responsible resource development.

This year, we are undertaking the following:

• A carbon portfolio analysis, to better understand the carbon footprint of the fund.

• A detailed review of the ESG practices of the fund’s investment managers.

Dear Members,

http://www.mcateer.ca

http://www.unpri.org



Funding PolicyThe Pension Board adopted a Funding Policy. The policy, developed over several years by the Pension Plan Advisory Committee (PPAC), incorporates the work of the Risk Assessment Working Group (RAWG). It contains guidelines concerning conditions that should be met before any benefit improvement can be considered.

CommunicationThe Communication Strategy Working Group, whose members include representatives from the Pension Board and the Pension Plan Advisory Committee, worked with staff to produce a whiteboard video to explain some pension basics, including how the pension is designed to fit in with other retirement income sources. Your Retirement Income: The Three Legged Stool can be viewed at www.united-church.ca/leadership/church-administration/pension. More videos explaining aspects of the Pension Plan are in the works.

Membership and Staff ChangesAfter 12 years of invaluable support to the board and plan members, Pension, Benefits and Compensation Manager Linda Begley retired at the end of 2015. Linda joined the Ministry and Employment Unit in 2003 and helped institute the current governance system for the plan. During her tenure, Linda oversaw the introduction of the pastoral charge payroll service and the comprehensive ministry compensation model. Both were authorized by the General Council in 2006.

In 2015, the plan paid out over $70 million in pensions and expenses.

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Retired: Linda Begley

New to the Board: Jack Spencer




There was one change to the membership of the Pension Board in 2015. Jack Spencer, a retired minister from Prince Edward Island, was appointed to the board by Executive of the General Council in June. Jacqui Allard, Graham Brownmiller, Paul Purcell, and I were all re-appointed. The Pension Plan Advisory Committee and the Investment Committee also saw membership changes in 2015. See the reports of Anne Soh and Deborah Leckman, the committees’ respective chairs, for details.

Financial PositionAs described by Deborah Leckman, chair of the Investment Committee, the plan relies heavily on investment earnings to meet its obligations. The plan paid out over $70 million in pensions and expenses. Of that amount, $23 million came from contributions, with the balance from investment income. We regularly measure the financial strength of the plan and are reasonably confident that the actuarial valuation to be performed this year will reveal that the plan remains in a solid financial position.

We, the volunteer members of the Pension Board, look forward to continuing our efforts to ensure the long-term sustainability of the pension plan while investing responsibly.

On behalf of the Pension Board,

Marcus Robertson, Chair

We are reasonably confident that the plan remains in a solid financial position.

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Staff Support Alan Hall, Executive Officer, Ministry and Employment

Erik Mathieson, Executive Officer, Finance

Shenagh Rosa, Manager, Pension Compliance and Communication

David Dawrant, Manager, Pension and Benefits Administration

Derek Hurst, Pension Fund Manager

Members of the Pension Board (June 2016)Jacqui Allard, BA, MBAMalcolm Boyle, QC, BA, MA, LLBRev. Graham Brownmiller, BGS, MDivRev. Brian Copeland, BA, MDiv, STMDavid Gilliland, BMath, FSA, FCIA, CFA, MAAA, CERADouglas Greaves, HBA, CFA, ICD.D

Kit (Kathleen) Loewen, BSc, BEd, MEdPaul Purcell, BSc (Hons), FSA, FCIA, CFAMarcus Robertson (Chair), BSc (Hons), MSc, FSA, FCIA Jack Spencer, BA, MDivIan Thomson, BASc, MASc

For member bios, visit commons.united-church.ca (search “pension administration”)

https://commons.united-church.ca/Documents/Forms/AllItems.aspx?RootFolder=%2FDocuments%2FHuman%20Resources%2FPension%20Administration

2016 promises to be a busy and exciting year, with significant initiatives such as the move to a new third-party administrator, an actuarial valuation, and completion of the funding policy for the plan.

Last year, we advised you that the agreement with our administrative services provider, Aon Hewitt, had expired and that PPAC was considering alternatives for the administration of the plan.

After a thorough examination of the available options in the marketplace, PPAC recommended to the Pension Board and the Pension Board approved that administration services of the benefits centre be moved to McAteer (www.mcateer.ca).

PPAC also monitors plan funding with the help of Mercer, our plan actuary, and reviews the plan design and legislative developments across Canada along with our legal advisers, Hicks Morley. During 2015, PPAC received quarterly reports on the financial health of the plan.

A full actuarial valuation effective December 31, 2015, is currently being conducted. We are optimistic that the result will show that the plan remains in a solid financial position, despite challenging economic conditions.

The funding policy, as referenced in Marcus Robertson’s letter, was completed by PPAC and approved by the Pension Board at their March 2016 meeting. This is an important document providing guidance on contribution and benefit decisions while maintaining the sustainability of the plan.

Since the last Annual Report, PPAC welcomed three new members: James Clarkson, CPA CA, Director of Pension Fund Accounting and Treasurer, Pension Fund Society for the Toronto Transit Commission; Steven McCormick, Senior Vice President, Plan Operations for Healthcare of Ontario Pension Plan (HOOPP), a multi-employer pension plan with over 300,000 members; and Jacques Tremblay, a partner at Oliver Wyman and former President of the Canadian Institute of Actuaries. The considerable skills of these new members will aid in the committee’s mission to provide sound recommendations to the Pension Board.

During 2015, PPAC received quarterly reports on the financial health of the plan.

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Dear Members,



From the Chair of the Pension Plan Advisory Committee

Dec. 31,2015

Effective date of actuarial valuation

New to PPAC: James Clarkson Steven McCormick Jacques Tremblay

http://www.mcateer.ca


PPAC bid farewell, with thanks, to outgoing members Tracey Leask and Joseph Nunes.

On behalf of all members of the committee, I recognize and thank General Council Office staff for their contribution, and especially acknowledge Linda Begley, who retired in December. I commend Linda for her diligence, expertise, analytical skill, and attention to detail in documenting all sides of an issue for the consideration of PPAC and the board. She will be missed.

We, the members of PPAC, look forward to continuing to act for the long-term benefit of all members of The United Church of Canada Pension Plan over the next year and into the future.

On behalf of the Pension Plan Advisory Committee,

Anne Soh, Chair

We look forward to continuing to act for the long-term benefit of all members.

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Members of PPAC (June 2016)


MercerPlan actuary

HicksMorley

Legal advisers

Thanks: Tracey Leask Joseph Nunes

James Clarkson, CACaroline L. Helbronner, BA, LLBSteve Houston, BASteven McCormick, BA Dan Murphy, BSc, FSA, FCIA

For member bios, visit commons.united-church.ca (search “pension administration”).

Cindy Palmer, BComm, CHRLMarcus Robertson, BSc (Hons), MSc, FSA, FCIA (Pension Board Rep.) David Short, FCIA, FSAAnne Soh (Chair), BSc (Hons), FSA, FCIAJacques Tremblay, FCIA, FSA, MAAA


From the Chair of the Investment Committee

As the Chair of the Investment Committee, I am pleased to summarize our results. The return for 2015 was 5.1%, outperforming our benchmark goal of 4.7%. In a year of slow economic growth around the world, however, the return was lower than in previous years. On a four-year basis, the annual return was 9.8%, exceeding the benchmark of 9.5%. The fund’s assets grew by 1.5% over 2015, closing the year at $1.35 billion after withdrawals for pension benefits and expenses.

The value of investments is tied to economic activity, and few prospects for improved growth appear on the horizon. Central banks are pushing government interest rates into negative territory in Europe and Japan. In response to weak oil prices, Canadian growth continues to be anemic. U.S. economic growth is stronger than that of its peers, but cannot be considered robust.

That being said, investments were made during 2015. The cash balance was reduced from 3% to 2% of assets, and the fund made commitments to two new private equity funds, representing 3% of assets. These investments will be funded over time as the equity managers find worthwhile opportunities. Our asset mix currently stands at 62% equities and 38% fixed income.

The pension fund takes a careful path with its investments, maintaining a lower risk profile than the majority of its peers. Over 60% of benefit payments are funded from investment income ($39 million in 2015), with the difference coming from contributions. Therefore, the pension fund avoids high-risk investments with more potential for volatility and loss. We continue to seek reasonable returns with lower risk.

The pension fund takes a careful path with its investments.

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Equities 62%

Fixed income 38%

Asset Mix

Assets $1.35 billion

Dear Members,




With respect to environmental, social, and governance issues, the pension plan is now a signatory to the United Nations Principles for Responsible Investment. This commitment requires public disclosure of our responsible investing activities, with the first report due in 2017. I am pleased with our increased focus on shareholder engagement and proxy voting, with an emphasis on Indigenous rights and carbon disclosure.

There were several changes in the committee in 2015. I would like to thank Jane Halliday, Andy Moysiuk, and Julie Cays for their many years of dedication to the pension plan, and to express sincere appreciation for their service. The committee is pleased to welcome Kathleen Wylie, Head, Canadian Equity Research at Russell Investments; Asif Haque, Director, Investments at Colleges of Applied Arts and Technology (CAAT) Pension Plan; and David Kaposi, Chief Investment Officer, Ontario Power Generation. They bring vast experience in the areas of manager research, asset mix, and alternative asset classes, including private equity, real estate, and hedge funds.

On behalf of the membership of the Pension Plan of The United Church of Canada, I extend gratitude to the members of the Investment Committee for their dedication and counsel.

Sincerely,

Deborah Leckman

The pension plan is a signatory to the UN Principles for Responsible Investment.

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2015benchmark

2015 actual 5.1%

4-year annual benchmark 9.5% 4-year annual actual 9.9%

4.7%

Return on Investment


New to the Investment Committee: Kathleen Wylie Asif Haque David Kaposi

Thanks: Jane Halliday Andy Moysiuk Julie Cays

Members of the Investment Committee (June 2016)Douglas Greaves, HBA, CFA, ICD.D (Pension Board Rep.)Andrew (Andy) Greene, MA, CIM, CAIAAsif S. Haque, MA, CFADavid Kaposi, CFAClaire Kyle, CFADeborah Leckman (Chair), MBA, CFA

For member bios, visit commons.united-church.ca (search “pension administration”).

Sean Macaulay, CFAWilliam (Bill) Mackenzie, ICD.DJames B. Walker, BComm, LLBKathleen Wylie, CFAMary Anne Wiley, CFA


Committee Member UpdatesIn their messages, the chairs of the Pension Board, the Pension Plan Advisory Committee, and the Investment Committee have described changes to their membership over the past year. To streamline the Annual Report and make the most current information available, current volunteer board and committee members will be updated regularly at commons.united-church.ca (search “pension administration”).

Funding PolicyThe funding policy was adopted after extensive consultation and review. Its purpose is to provide guidelines for current and future board and committee members, specifically a framework and mechanisms for dealing with risks to the plan and the possible funding excess or shortfall. The funding policy incorporates guidelines from the Risk Assessment Working Group report. The RAWG’s mandate was to assess major risks to the plan and create a report containing possible courses of action to deal with those risks.

The policy was drafted for consistency with the Statement of Beliefs and Guiding Principles of the Pension Plan, which is excerpted throughout this section.

Investing ResponsiblyInvestment income far exceeds both member and employer contributions as the primary source of funds to pay promised pension benefits, now and into the future.

YEAR IN REVIEW

Total Annual Benefit Payments and Expenses: $70,071,000

Employer Contribution 19%

Portion from Investments 68%

Member Contributions 13%


Read the full Statement of Beliefs and Guiding Principles online at commons.united-church.ca (search “pension administration”).

For a copy of the Plan Text, visit commons.united-church.ca (search “pension administration”).




YEAR IN REVIEW

The main reason for this is that there are fewer active, contributing members than pensioners and deferred members who are entitled to benefits from the plan.

While the priority of the Pension Board is to ensure the pension promises are kept to members, efforts are made to invest responsibly and, when possible, to influence corporate behaviour in positive ways:

• Shares of common stock include voting rights. Instead of attending a company’s annual general meeting and voting in person, a shareholder can vote by proxy. The Pension Board enlists the services of Glass Lewis to vote proxies on behalf of the plan, according to the plan’s responsible investment goals, with an emphasis on issues of Indigenous rights and carbon disclosure.

• Sustainalytics is a company that provides a screen for companies that meet our restrictions on pornography, weapons, tobacco and gambling.

• The Pension Plan of the United Church is also a member of the Canadian Coalition for Good Governance and a signatory to the United Nations Principles for Responsible Investment.

• See the message from the chair of the Pension Board for more examples of investing responsibly.

Active members 3,560

Pensioners 4,570

Plan DemographicsDeferred members 1,230


“Socially responsible investment procedures can be employed provided there is reasonable assurance that the best long term interest of the members is being served.” Statement of Beliefs and Guiding Principles

YEAR IN REVIEW

Actuarial Valuation UnderwayIt is a priority to ensure the plan’s assets continue to be sufficient for the projected long-term costs of all members’ pensions. Accordingly, a full actuarial valuation of the fund as at December 31, 2015, is underway. An actuarial valuation is a mathematical analysis of the financial condition of the pension plan. An actuary must prepare an actuarial valuation for the pension plan at least once every three years.

Statement of Investment Policies and ProceduresThe Statement of Investment Policies and Procedures, or SIPP, is a required document for all pension plans registered in Ontario. According to a recent requirement, it must contain certain parameters for the investment of pension fund assets and be filed with the Financial Services Commission of Ontario. The initial filing was made prior to the deadline of March 1, 2016.

The SIPP for the Pension Plan of The United Church of Canada—a 26-page document which sets out parameters for the investment of pension fund assets—is available on request from Ministry and Employment at the General Council Office.

Communication to Pension Plan MembersCommunication between the board and the members of the pension plan, both active and pensioner, continues to be a high priority. The mechanics of the pension plan can be confusing, but the board and its Communication Strategy Working Group work to ensure that members have up-to-date and relevant information on how their plan works.

Videos

To this end, several videos have been produced. View them at www.united-church.ca/leadership/church-administration/pension. Click in the lower right corner of the picture for a toolbar to enable captioning. Choose English or French subtitles by clicking on the “settings” icon ( ).

Safeguarding The United Church Pension Fund, which was first announced in the 2014 Annual Report, features board chair Marcus Robertson. It outlines the priorities of the Pension Board for the next few years.

Your Retirement Income: The Three Legged Stool uses whiteboard technology to explain some pension basics, including how the pension is designed to fit in with other retirement income sources.


“The design of the Plan should reflect that saving for retirement is a shared responsibility and is dependent on government, employer and individual saving initiatives (the three-legged stool).” Statement of Beliefs and Guiding Principles

“All Plan-related activities will comply with legislation (e.g., Pension Benefits Act and Income Tax Act), Church policies (e.g., relevant human resources and compensation policies), and Pension Board policies (e.g., plan design, funding, Statement of Investment Policies & Procedures).” Statement of Beliefs and Guiding Principles

“Funding levels must ensure a high level of certainty regarding the security of benefits under the Plan.” Statement of Beliefs and Guiding Principles



YEAR IN REVIEW

More videos explaining aspects of the pension plan are expected in the coming months. One will highlight the leadership, including volunteer members of the board, PPAC, and Investment Committee. Another will describe the critical function of investment income to the pension promise for our members.

Seminars

Another way to learn about the pension plan is by taking part in the Pre-retirement Seminar. Offered three times each year through United in Learning, this free seminar shares information basics about the pension and the associated benefits for pensioner members.

All members are encouraged to attend this free seminar, especially those forty or older, and those who expect to retire within five years. Groups are welcome to attend virtually! If you do not have reliable Internet service or do not feel confident about online seminars, please contact your presbytery or Conference and ask if they will host a group presentation. Register at www.united-in-learning.com/pre-retirement.

Print and Digital

While we move to more digital communication, hard-copy resources for plan members continue to be available. Along with the Annual Report, the Foresight newsletter is produced three times per year.

Slightly fewer than half of members and employers receive the newsletter by e-mail, and all pastoral charges and ministry sites continue to receive a hard copy to ensure information is available to anyone who is interested. Should you wish to receive a hard copy of an e-mailed resource, please contact our office: [email protected] or 1-800-268-3781 ext. 3161.


http://www.united-in-learning.com/pre-retirement

mailto:[email protected]

YEAR IN REVIEW

Governance

For the volunteer members of the Pension Board and its committees, the fiduciary responsibility to the members of the plan is a matter of highest priority. This is also an intrinsic part of the Executive of the General Council oversight of the pension plan as the official administrator of the pension plan of the United Church.

Fiduciary responsibility means:

• Duty of loyalty to beneficiaries (avoid conflicts of interest, do not put personal interests ahead of the interests of plan beneficiaries, and do not profit from position as fiduciary).

• Using the same care, diligence, and skill as a person with the same skills, experience, and profession would be expected to do in like circumstances. Fiduciaries can rely on expert advice, so long as the expert was diligently selected and supervised.

• Duty of even-handedness.

• Duty to provide adequate disclosure.

• Duty to protect confidential information.

• The fiduciary standard is not perfection. Establishing due diligence is key:

° Consider a range of options and make a reasonable choice.

° Seek expert advice where appropriate.

° Document/minute the due diligence process.

° Keep pension records as long as possible.

For an explanation of the reporting structures and areas of responsibility of the governing bodies of the pension plan, please view the governance diagram and related information at commons.united-church.ca (search “pension administration”).

The fiduciary standard is not perfection. Establishing due diligence is key.

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FINANCIALS

Financial Statements


Statement of net assets available for benefitsas at December 31, (amounts in thousands)

2015 2014

Assets Investments $1,337,792 $1,308,165 Cash and cash in transit 10,047 20,262 Amounts receivable 959 1,170 Interest and dividends receivable 3,801 3,711 1,352,599 1,333,308

Liabilities and trust Amounts payable and accrued liabilities 1,857 2,433 Trust funds – 738 1,857 3,171Net assets available for benefits $1,350,742 $1,330,137

Statement of changes in net assets available for benefitsfor the year ended December 31, (amounts in thousands)

2015 2014

Net assets available for benefits, beginning of year $1,330,137 $1,243,065Increases Net gain on sale of investments 92,032 77,135 Change in unrealized net gains (losses) in the year (73,035) 16,879 Change in fair value of investments 18,997 94,014

Investment income 48,967 39,744 Contributions (for current service) Employers 13,613 14,520 Members 9,099 8,504 90,676 156,782Decreases Pensions paid 58,416 57,578 Refunds (including $1,151 for death benefits; 2014: $521) 3,493 3,931 Administrative, project, and investment expenses 8,162 8,197 Income allocated to trust funds – 4 70,071 69,710Change in net assets available for benefits 20,605 87,072Net assets available for benefits, end of year $1,350,742 $1,330,137

FINANCIALS

Financial Analysis

Fund PerformanceOur fund rate of return on investment was a positive 5.1% in 2015, exceeding the annual benchmark goal of 4.7%. However, the 2015 return on investment was the lowest it has been in four years. In 2015 we experienced volatile financial markets, low commodity prices, and a weak Canadian dollar. The weak Canadian dollar was beneficial for the foreign investments, providing a positive boost to the rate of return.

Going forward, the world is experiencing slow economic growth and low interest rates, even negative interest rates in Europe and Japan. This does not bode well for investment returns, and may result in a sustained period of lower returns.

2015 ($000s)

2014 ($000s)

Investment income 48,967 39,744

Realized net gains (losses) 92,032 77,135

Change in unrealized net gains (losses) (73,035 16,879

Net investment income 67,964 133,758

Net assets, end of year 1,350,742 1,330,137

Investment rate of return 5.1% 10.9%

Assets in the fund continue to be invested using a prudent investment philosophy, with the goal of providing stable benefits to members over the long term. During 2015, the cash position was reduced to increase the amount of return-seeking investment assets.

The pension fund continues to invest in real estate funds, but the amounts redeemed (sold) exceeded new investments made with some of our managers. The fund is below its target 10% allocation to real estate. The fund continues to look for real estate opportunities but is patient, considering high real estate values and economic uncertainty in Canada, particularly western Canada.

The fund was active in private equity, continuing to invest with existing managers but also making commitments to two new managers. Over time, we expect the fund to approach its target 5% allocation.

2015benchmark

2015 actual 5.1%

4-year annual benchmark 9.5% 4-year annual actual 9.9%

4.7%

Return on Investment


)

FINANCIALS

Investment Type 2015 2014 2013

Canadian Fixed Income 24% 25% 33%

Global Fixed Income 8 8 –

Canadian Equities 20 21 22

International Equities 15 18 19

U.S. Equities 19 14 13

Real Estate 6 6 6

Private Debt 4 4 5

Private Equity 2 1 –

Cash 2 3 2

100% 100% 100%

The financial value of our assets grew in 2015, albeit at a slower pace than in previous years. In 2015, investment return and contributions exceeded pension payments by $21 million, increasing net assets 1.5% over 2014.

Actuarial PerformanceWhen valuing the plan, a going concern basis assumes the plan and the investments in the fund will continue well into the future.

• The actuarial value of the plan assets includes the investment in the fund and the present value of future contributions. It also averages the investment income so that a large gain or loss in any one year does not unduly affect the result.

• The actuarial liability of the plan is the present value of future payments to pensioners, which means that a decrease in interest rates increases the calculated liability and weakens the funded position of the plan.


Canadian Fixed Income— Mostly government and corporate bonds

Global Fixed Income— Mostly government and corporate bonds issued in countries outside of Canada

Equities— Mostly large corporations’ stock, with market capitalization over $500 million

Real Estate— Pooled Canadian funds, diversified by geography and property type

Private Debt— Mostly secured loans to corporations, similar to bank loans

Private Equity— Equity and debt invested with a diversified group or small to mid-sized companies

Cash— Includes guaranteed investment certificates, treasury bills, and cash on hand

The above chart shows that the plan has maintained a surplus position on a going concern basis, where assets are greater than actuarial liabilities, since 2011. This was the result of changes in contribution and benefit rates and positive investment returns. The plan maintained this surplus position at the end of 2015. Decreasing interest rates and longer lives of pensioners are headwinds to maintaining the surplus.

As the chart shows, on a wind-up basis, the plan remains evenly funded (assets equal to liabilities), but the situation will need to be closely monitored. This is the valuation basis commonly used to determine fund viability by the regulators. The plan is a mature plan where the number of retirees exceeds active members. In addition, contributions only cover 37% of benefit payments; the remainder of benefit payments are covered from investments. Although the current position of the plan is positive, it can change quickly.

$ Mill

ions

300

500

700

900

1,100

1,300

1,500

201520142013201220112010

Estimated Actuarial LiabilitiesEstimated Actuarial Assets

Going Concern Basis

$ Mill

ions

300

500

700

900

1,100

1,300

1,500

201520142013

Estimated Actuarial LiabilitiesEstimated Actuarial Assets

Wind-up Basis


FINANCIALS

Actuarial ValuationIn 2015, Mercer (Canada) Limited continued in its capacity as consulting actuary for the pension plan. In addition to the full actuarial valuation currently being conducted, the plan is subject to regular, ongoing actuarial review and monitoring.

M. Frances BruceDarlene Burgess

Gordon Earl BurgessJames Francis BushellAlexander Clyde Coles

Mary E. ConroyArma C. Gilbert

Sylvia Gertrude HamiltonMildred Legrow

Gail ManuelGerald J. Moreau

Lillian Grace MorrisonKathleen M. Myers

Catherine W. PearsonDaisy Rosalin Rickard

Marjorie ScotlandJulia Vaitiekunas

Cecil Wilson

n

Hamilton Edith Carr

Marion CowanDonald Alan DeasLeslie C. Edmonds

James Brooks GibsonGerry Grenier

Marjorie Lois HannahEnid Mae Horning

Margaret Hoult Audrey KirkerJoyce Lewis

Florence MacQueenRuth A. McPhee

Earl Douglas Moore

Newfoundland and Labrador William Robert Bladen Bowering

Reuben D. Summers

n

MaritimeRanald MacDonald Cameron

Burton (Bert) A. CollinsRobert (Bob) Alexander Crooks

Cyrus Charles Murray FavierEric Grenfell Fullerton

Susan LoftusAnnie V. MacDonald

James Allistar MacDonaldJohn Charles (Jackie) MacDonald

John Fraser MacDonaldNorman Dewar MacDougallGeorge Henderson MacLean

Helen C. MacLeanM. Jean MacLeod

William Roy Ewen MoaseEugene Victor (Vic) Moriarty

Colin D. NickersonJohn Patterson

Elsie J. ReidE. Bruce Riggs

Samuel Patterson ShieldsKimly Ruth Stuart

Janet Tupper

n

Montreal and Ottawa David Field

Muriel K. FoggoAngus John MacDonald

June Ida NewmanMelvin Chown Newman

Elisabeth SchreiberHanns Felix Skoutajan

Brian Smith

n

Bay of Quinte Jean Elizabeth Barkley

Jean BradfordM. Frances Bruce

Frederick Albert ClappisonEdna Ethelwyn Clysdale

Wilbert Clarence CoxDavid Donald Davidson

H. Marion DelveClifford EvansPeter W. Faris

Anna Maria FrenchRuth V. Harris

Hazel Margaret Sankey IrvineZaghganoush Kerbabian

Pearl SimmonsLaurie Ann Storring

Gwendoline E. StuartPeter D. Tink

Alan David Tuck

n

Toronto Vincent Domenic Alfano

F. Gale BlueC. Elwin Boyd

Lillias A.J. BrownMalcolm Brown

IN MEMORIAM

For their faithfulness to the church of Jesus Christ we remember, give thanks, and extend our sympathy to their loved ones.

21Annual Report of the Pension Plan 2015 21Annual Report of the Pension Plan 2015

Patricia MacDonaldWilliam John Mayberry

Marjorie PatersonWilliam G.M. Rae

James (Jim) William Roberts

n

British Columbia Joanne Black

Douglas J. BrownL. Edna Cooper

Donald Barney JacksonGlenn Clifford JacksonMargaret E. Kempling

Catherine KnipeGwen A. Lego

Harold Lindsay MacKayAlexander Macleod Manson

A. Elizabeth McMurtryJohn William O’Neill

Eileen D. ParkDorothy Shaver

Lyall Andrew Charles SimpsonDouglas Montague Sly

Kathleen A. SoutarGwendoline Warren

Reginald Alastair Wilson

n

Outside of CanadaAnne Dejong

Douglas R.A. HareHisako HorikoshiDavid C. Searfoss

Margaret NixRonald (Ron) Colquhoun Smeaton

James SparryDorothy StrippGlen R. StromeHelen J. WelshHelen I. Young

n

London Michael Darcy Boulger

Kent Douglas James GarrettRoston (Ross) Edwin Hargreaves

Katherine HoddinottHazel Huether

James R. JohnstonJohn Miles Lindsay

William Ernest McCoshHarley Jack MooreEdna Mae Smith

Donald (Don) Roland SpencerHerbert (Herb) Wallace Wonfor

n

Manitou Nico Vanderstoel

n

Manitoba and Northwestern Ontario

Peter GummowCliff J. JuenkePriscilla Little

Rosalie J. MacKayJames Ronald McCullough

Geziena Moerman

Janice A. PerryMary Petrusiak

Vernon F. Speidel

n

Saskatchewan Donald (Don) William Bater

William Alvin ChapmanDorothy E.B. Fenwick

Ronald James FletcherAudrey O. Johnson

Willa Alberta KernenSusan (Sue) Marilyn Manning

Judy McCallumGeorge T. Palmer

William J. Phillips ReesJean Sadler

Sandra May SellarsWilliam Spearing

Thelma M. Stanford

n

Alberta and Northwest Tammo Battjes

Anne BeyerDeborah R. Cherniwchan

Barbara L.N. DeansDavid Enns

Arlene M. FowlisJames Leonard Henning

Robert Eade HetheringtonM. Eleanor Higham

Gerald Middleton HutchinsonRonald Everett JeffreyRobert Arnold Kayes

IN MEMORIAM

22Annual Report of the Pension Plan 2015 22Annual Report of the Pension Plan 2015

This report is for you, members of the pension plan. Through it we seek to be accountable for the resources you have entrusted to our care. We endeavour to be faithful to this stewardship trust.

We want to thank you for your faithful service in the United Church and in the local ministries, organizations, and communities where you serve. Together we share a commitment to celebrate God’s presence, to live with respect in Creation, to love and serve others, to seek justice and resist evil, and to proclaim Jesus.

In order to save paper and printing and mailing costs, the Annual Report of the Pension Plan of The United Church of Canada 2015 is primarily distributed online.

Contact Ministry and Employment for questions and comments or to receive a printed copy: 1-800-268-3781 ext. 3161 [email protected]

Include your name and complete mailing address.

The United Church of Canada/L’Église Unie du Canada Design: Diane Renault, Graphics and Print Cover photo: © Brozova | Dreamstime.com

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The United Church of Canada / L’Église Unie du Canada Ministry and Employment

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Toronto, ON M8X 2Y4www.united-church.ca

http://www.united-church.ca