As the rail industry continues to evolve, the BR&CF
is looking forward to the future and serving our members.
CTY LTD Update
The purpose of this Information Bulletin is to bring everyone up to date
on what has happened since the CTY LTD Ratification.
Railroad workers have been fighting fatigue in the
rail industry for decades but the problem persists. We are now asking
you to help us document the problem.
Communiqué to CP Pensioners
and plan members
Source: Canadian Pacific Human
Resources & Industrial Relations
Published: February 6th 2009
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You have likely seen much information and commentary in various news
media about the highly unusual and unique period of economic uncertainty
we are currently in as well as the related impact on pension plans. More
recently, you may have seen information about Canadian Pacific’s pension
plan and its projected solvency deficit.
Unfortunately some of this information is speculative, and occasionally
it is false. I want to take this opportunity to clarify and provide you
with the facts.
Due to declining equity markets as well as long-term interest rates
currently hovering at historic lows, CP’s pension plan, like many
others, is currently experiencing a shortfall, on a solvency basis, of
It should be noted that the solvency deficit, or shortfall, is
calculated using extremely conservative assumptions governed by federal
legislation. The rules for calculation look at plans as if they were to
become insolvent. The solvency funding rules, therefore, are based on a
hypothetical wind-up scenario in which the plan would be immediately
terminated. These rules require the pension plan be sufficiently funded
such that existing pensioners would receive 100 per cent of their
benefits and employees would receive 100 per cent of the future pension
benefits they earned up to the point at which the plan was terminated.
The existing legislation requires CP to fund this shortfall over a
period of five years. This is an onerous financial contribution, which
diverts capital away from projects used for the purpose of helping the
company grow. Nevertheless the company always has, and will continue to,
fund the required amount.
While the federal government has commenced consultation around a number
of permanent changes to ensure the sustainability of Canada’s pension
system, the outcomes are currently uncertain. In the near term, the
government has announced its intention to provide one-time legislative
relief from the five-year funding requirements for solvency deficits.
This directly relates to the extreme decline in equity markets last
The company will look to its pensioners, employees, and the unions
representing them to support its efforts to get the government to adopt
a more reasonable time frame to fund solvency deficits.
Again, CP has always, and will continue to, meet all legislative
requirements for funding pension solvency deficits to ensure the
security of pension plan payments for current and future retirees.
If you have any questions about this information or the pension plan,
please contact your Pensioner Association or Debbi Johnson at CP’s
Pension Services at 403-319-6495.
Human Resources &