Westcoast-Actuaries Inc.

Individual Pension Plan (IPP)
Benefits

Benefit Formula:

The benefits under IPPs are based on a 2% earnings formula. All benefits for a non-connected person can be based on the best 3-year average indexed earnings. For a connected person, while benefits for pre-1991 pensionable service (if eligible) can be based on best average 3-year indexed earnings, the benefits for post-1990 pensionable service cannot be based on best 3-year average indexed earnings. Post-1990 benefits for a connected person must be based on "indexed earnings" for each year.

Example (Non-Connected Member):

A non-connected member retires at age 65 from an IPP as at January 1, 2003 with the following personal information:

Pensionable service (total): 27 years 6 months

Best 3-year average indexed earnings: $80,000

His pension benefits would be calculated as follows:

For each year of pensionable service, the member will receive $80,000 x 2% or $1,600.00 of annual pension. For a total pensionable service of 27.5 years, the member would receive $44,000.00 ($1,600.00 x 27.5) of annual pension.

Please note that the pension amount can not exceed the Income Tax Act's Maximum Pension Limit. For example, if the member had best 3-year average indexed earnings of $100,000.00 instead of $80,000.00, the member's annual pension per year of pensionable service would be limited to the current maximum pension limit of $1,722.22 instead of $2,000.00 (which is 2% of $100,000.00). The member's annual pension would be $47,361.05 ($1,722.22 times 27.5 years of pensionable service).

Example (Connected Member):

A connected member retiring at age 65 has an IPP as at January 1, 2003 with the following personal information:

Pensionable service: Pre-1991 - 15 years 3 months (fully pensionable, not 2/3 pensionable)
Post-1990 - 12 years
Best 3-year average indexed earnings: $125,000
Pensionable earnings for post-1990 pensionable service:

Year	Earnings
1991	$50,000
1992	$60,000
1993	$60,000
1994	$65,000
1995	$65,000
1996	$70,000
1997	$70,000
1998	$125,000
1999	$100,000
2000	$80,000
2001	$80,000
2002	$80,000

The annual pension amount is calculated as follows:

For pre-1991 service, the benefit is 2% of best 3-year average indexed earnings per year of service, i.e. $125,000 x 2% = $2,500.00. However, this amount is in excess of the current Maximum Pension Limit of $1,722.22 of annual pension per year of pensionable service. The unit pension is capped at $1,722.22 to arrive at an annual pension of $26,263.86 ($1,722.22 per year x 15.25 years) for pre-1991 pensionable service.

Year	Earnings	Wage Index Increase	Indexed Earnings	Accrued Annual Pension (2%)
1991	$50,000	29.81%	$64,907	$1,298.14
1992	$60,000	23.81%	$74,285	$1,485.69
1993	$60,000	19.35%	$71,609	$1,432.18
1994	$65,000	15.87%	$75,315	$1,506.30
1995	$65,000	14.30%	$74,295	$1,485.90
1996	$70,000	12.63%	$78,844	$1,576.88
1997	$70,000	11.34%	$77,935	$1,558.70
1998	$125,000	8.36%	$135,448	$1,722.22*
1999	$100,000	6.95%	$106,946	$1,722.22*
2000	$80,000	5.90%	$84,721	$1,694.42
2001	$80,000	3.93%	$83,144	$1,662.88
2002	$80,000	1.90%	$81,523	$1,630.47
Total				$18,776.00

* Limited to the current Maximum Pension Limit of $1,722.22 of annual pension per year of pensionable service because 2% of Indexed Earnings exceed the Maximum Pension Limit.

The total pension amount is therefore $45,039.86 per annum ($26,263.86 for pre-1991 and $18,776.00 for post-1990) or equivalently $3,753.32 per month. This is payable under the normal form of pension.

Early Retirement Benefits

The IPP member can retire as early as age 50. The benefit at early retirement would be the pension that is actuarially equivalent to the pension payable at normal retirement age (65). At the discretion of the Company, the early retirement reduction factor can be eliminated or reduced to provide an enhanced early retirement pension that is higher than the actuarial equivalent amount. A bridge benefit may also be provided for the pre-65 period. Please note that the cost for these enhancements in excess of any surplus that exists in the plan at the time of early retirement may require terminal funding from the Company.

Full unreduced pension can be paid at age 60 or even earlier if certain service or age plus service conditions are satisfied. The minimum required reduction under income tax legislation for early retirement is ¼% per month (3% per year) that the early retirement date precedes the earliest of:

age 60 [55],
30 [25] years of service,
age plus service equals 80 [75] years, and
date of total and permanent disability (non-connected person only).

Please note that the figures in [square brackets] are for public safety occupations only.

Benefit Options

The benefit options available on termination, retirement or termination of the pension plan are as follows:

a) an immediate or deferred pension paid from the pension plan;
b) an annuity purchased from an insurance company; or
c) a lump sum commuted value of accrued pension benefits; part or all of the amount may be transferred to RRSP/Locked-In RRSP or RRIF/LIF up to a maximum amount prescribed by Income Tax Regulation.

Normal Form Of Pension

The normal form is a pension payable as follows:

a) Life annuity guaranteed 15 years if member does not have a spouse; or
b) Joint survivor annuity with 2/3 continuation to surviving spouse with a 5-year guarantee if member has a spouse.

The pension is indexed at the increases in the Consumer Price Index (CPI) less 1% after commencement. At the discretion of the employer, this may be enhanced to full CPI. This improvement may trigger additional funding by the employer.

At retirement the member is allowed to have an irrevocable election on the form of pension. For example, the IPP member can elect a joint-survivor 100% (instead of 2/3) at a reduced amount.

Death Benefits

The value of pre-retirement death benefits is equal to the commuted value of the member's accrued pension payable at age 65. Please note that under most pension legislation the primary beneficiary for death benefits is the spouse, unless a spousal waiver form is signed to allow designation of other beneficiaries.

Post-retirement death benefits depend on the pension option elected by the member at retirement. For example, if it is a life annuity with a guarantee period, the remaining guarantee period will be paid to the designated beneficiary or estate. If it is a joint-survivor annuity, pension at a pre-selected continuation percentage at retirement will be continued to be paid to the spouse, if then living, for the spouse's remaining lifetime.

Termination Benefits

The member can elect either a deferred pension commencing at normal retirement date (age 65) equal to the amount of accrued pension or a lump sum equal to the commuted value of the member's accrued pension payable at age 65.

Surplus Ownership

The standard Westcoast Actuaries Inc. Individual Pension Plan (IPP) stipulates that the member owns all the surplus under the plan. The residual assets after the last death will be paid to the beneficiary or estate of the last survivor (the pensioner or the surviving spouse). Therefore, the IPP is more or less on a "consumption" basis like an RRSP. All assets in the plan will eventually be paid to the member (pensioner), the surviving spouse or the beneficiary or estate of the last survivor so there is no loss or forfeiture in the value of the pension.

	OPTIMUM PENSION SOLUTIONS