August 26, 2015 • Hôtel Musée Premières Nations
AGENDA

Opening of the Meeting

Word of Welcome from the Retirement Committee President
•
FNPSPP Profile and Presentation of Committee Members

Approval of the Minutes of the Meeting (August 27, 2014) and Follow-up

Presentation
•
Financial Statements
•
Salient Facts 2014
•
Financial Situation of the Plan

Ratification of Action Taken by the Retirement Committee during Fiscal Year 2014

Varia

Adjournment of the Assembly
Word of Welcome
Profile of the FNPSPP
Presentation of Committee Members by
Mr. Floyd McBride
President of the Retirement Committee
FIRST NATIONS PUBLIC SECURITY PENSION PLAN
(FNPSPP)
 The FNPSPP is part of the largest Aboriginal defined benefits
pension fund in Canada
• Registered with the Office of the Superintendant of Financial Institutions and the
Canada Revenue Agency
• Meets the requirements of the federal Pension Benefits Standards Act and the
Income Tax Act
 Mission
The mission of the First Nations Public Security Pension Plan is to administer a
defined benefit retirement plan for First Nations employers and employees involved
in public security through an organization owned by them.
 The FNPSPP had 15 employers and 209 members as at
December 31, 2014
RETIREMENT COMMITTEE
 The Retirement Committee serves as the Board of Directors
• The Committee acts as the administrator and trustee of the pension
fund
• The Committee is made up 7 members, 3 of whom are elected by and
from among employees, employers members and retirees.
RETIREMENT COMMITTEE MEMBERS
Floyd McBride, President
Éric Cloutier, Vice-president
Angèle Petiquay, Director
David Kistabish, Director
Jean-Marie Gagnon, Ph.D., Director
Johanne Castonguay, Director
Régis Flamand, Director
Approval of the Minutes of the Meeting held on
August 27, 2014 and follow-up by the General Manager
Mr. Jacques Beaudet, Lawyer
Gagné, Letarte, s.e.n.c.
Presentation
 Financial Statements
 Salient Facts 2014
 Financial Soundness
(Solvency and Capitalization)
Mr. Sylvain Picard, CPA, CA, CGA, ASC, Adm. A.
General Manager
FINANCIAL STATEMENTS – STATEMENT OF NET ASSETS OF THE FUND
Available for the Provision of Benefits – December 31, 2014
2014
2013
$
$
27,079,282
24,052,374
Employees
71,445
74,628
Employers
142,890
149,257
Additional contributions
176,643
243,473
-
2,614
Accrued interest and dividends
32,788
37,276
Sales taxes receivable
85,455
53,176
Cash
338,875
249,175
Cash held for investment purposes
147,198
122,682
28,074,576
24,984,655
Assets
Units held in the global trust
Accounts receivable
Contributions receivable
Related party- Native Benefits Plan
Total assets
FINANCIAL STATEMENTS– STATEMENT OF NET ASSETS OF THE FUND (continued)
Available for the Provision of Benefits – December 31, 2014
2014
2013
$
$
Accounts payable and accrued liabilities
27,275
50,665
Related party – Native Benefits Plan
68,076
-
Related party – RBA Financial Group
14,358
26,944
109,709
77,609
27,964,867
24,907,046
Liabilities
Accounts payable
Total liabilities
Net assets available for benefits
FINANCIAL STATEMENTS – STATEMENT OF CHANGES IN NET ASSETS OF THE FUND
Available for the Provision of Benefits – December 31, 2014
2014
2013
$
$
3,001,036
3,058,183
12,930
6,605
Employees
433,508
364,904
Employers
1,177,897
1,040,687
3,858
3,858
6,587
-
4,635,816
4,474,237
Increase in net assets
Investment income from the units
held in the global trust
Other revenues
Contributions
Redemption of past services
Transfers from other plans
Increase in net assets
FINANCIAL STATEMENTS – STATEMENT OF CHANGES IN NET ASSETS OF THE FUND
(continued)
Available for the Provision of Benefits – December 31, 2014
2014
2013
$
$
140,000
140,000
Management fees on investments
83,585
76,261
Professional fees - Actuaries
78,253
66,856
Auditor fees - Audit
7,192
7,300
Professional fees - Others
6,981
15,712
63,828
63,830
2,010
2,097
13,139
7,257
394,988
379,313
Decrease in net assets
Administration expenses
Management expenses
Cost of meetings
Office of Superintendent of Financial Institutions
Marketing and development
FINANCIAL STATEMENTS – STATEMENT OF CHANGES IN NET ASSETS OF THE FUND
(continued)
Available for the Provision of Benefits – December 31, 2014
2014
2013
$
$
636,669
598,950
Refunds of contributions
145,085
55,183
Transfers to other plans
401,253
164,901
Decrease in net assets
1,577,995
1,198,347
Net increase in net assets
3,057,821
3,275,890
Net assets available for benefits, beginning of year
24,907,046
21,631,156
Net assets available for benefits, end of year
27,964,867
24,907,046
Decrease in net assets (continued)
Benefits paid
Refunds and transfers
FINANCIAL STATEMENTS – INVESTMENT REVENUES OF UNITS HELD IN THE
GLOBAL TRUST
December 31, 2014
2014
2013
$
$
Interest
324,221
150,191
Dividends
514,440
479,964
1,484,347
660,381
1,169
(42,851)
55,691
2,523
621,168
1,807,975
3,001,036
3,058,183
Gain on sale of investment
Gain (loss) on currency
Distribution from real estate companies and from
infrastructure funds
Current period change in fair values of investments
SALIENT FACTS – EVOLUTION IN NET ASSETS
For fiscal year ended December 31 (in Canadian Dollars)
Period
Increase
Net cumulative assets
2014
$ 3,057,821
$ 27,964,867
2013
$ 3,275,890
$ 24,907,046
2012
$ 2,244,993
$ 21,631,156
2011
$ 480,582
$ 19,386,163
2010
$ 1,384,450
$ 18,905,581
SALIENT FACTS – CHANGE IN NET ASSETS
For fiscal years ended December 31 (in millions of Canadian Dollars)
2014
Increase
$ 3,057,821
30
26
Cumulative
$ 27,964,867
22
18
14
Cumulatif
Cumulative
10
Variation
Variation
6
2
-2
2010
2011
2012
2013
2014
FINANCIAL STATEMENTS – COMPOSITION OF INVESTMENTS
UNITS HELD IN THE GLOBAL TRUST
December 31, 2014
2014
2013
$
$
281,627
177,729
10,452,585
8,089,597
4,190,998
5,705,729
International shares fund
7,316,776
6,702,744
Global small cap fund
1,048,825
490,665
Real estate companies
2,783,938
2,178,324
Infrastructure funds
1,004,533
707,586
27,079,282
24,052,374
Money market
Canadian bonds (yield between 3% to 6.65%)
Canadian shares
Foreign investment funds
Real estate funds
SALIENT FACTS
Breakdown of the Portfolio by Category of Asset
Canadian Shares
16%
Emerging Market
Equities
6%
Global Equities
(small & large cap funds)
21%
Cash and
Canadian Bonds
37%
Direct Real Estate
and Infrastructure
20%
SALIENT FACTS - CONTRIBUTIONS
Period
Annual Contributions
2014
$ 1,611,405
2013
$ 1,405,591
2012
$ 1,540,213
2011
$ 1,392,712
2010
$ 939,927
SALIENT FACTS- BENEFITS PAID TO RETIREES
Period
Benefits paid
2014
$ 636,669
Retirees as at
December 31
42
2013
$ 598,950
38
2012
$ 547,283
33
2011
$ 530,107
33
2010
$ 456,068
32
SALIENT FACTS - 2014
 To adapt to new realities to ensure the Plan’s sustainability, we
focused on three realities in 2014:
1. First reality
•
Dealing with the financial health of the Plan and our ability to cope
with it
2. Second reality
•
Addressing the economic context and changes in world markets
3. Third reality
•
Responding to members’ growing needs in a context of increased
administrative complexity
First reality
“Dealing with the financial health of the Plan and our ability to cope
with it ”
ACTION TAKEN TO RE-ESTABLISH THE FINANCIAL HEALTH OF THE
FNPSPP
 Application of the amendments reducing benefits accepted by
the OSFI in November 2013:
• Define their impact on our financial health
• Develop different scenarios for the actuarial assumptions to ensure
adequate financing costs in order to maintain sufficient
capitalization
ACTUARIAL VALUATION : CAPITALIZATION AND SOLVENCY REVIEW
The financial soundness of a defined benefit plan such as the FNPSPP is measured primarily in
two different ways:

Capitalization review
•

The evaluation on the basis of capitalization serves to assess the financial situation of the
Plan at the time of evaluation based on the premise that the Plan will continue to exist
indefinitely,
o
A rate exceeding or equal 100%: sufficient financing
o
Rate under 100%: action must be taken to correct the situation.
Solvency review
•
The evaluation on the basis of solvency serves to assess the financial situation of the Plan at
a given date, based on the premise that the Plan will be terminated on that date. Using
hypotheses prescribed by law, the aim is to determine the capacity of the Plan to fulfil its
obligations to its members on the evaluation date
o
A rate exceeding 100%: sufficient financing
o
Rate under 100%: action must be taken to correct the situation. Please note that
solvency improves only on the basis of a hypothetical wind-up.
SOLVENCY REVIEW
As at December 31, 2013
Hypothetical wind-up
($)
Value of assets(1)
As at December 31, 2014
Solvency
($)
Hypothetical wind-up
($)
Solvency
($)
24,807,000
21,351,500
27,864,900
27,743,600
9,101,300
9,101,300
11,793,200
11,793,200
10,912,500
10,912,500
13,280,200
13,280,200
2,969,500
2,969,500
3,265,300
3,265,300
22,983,300
22,983,300
28,338,700
28,338,700
1,823,700
(1,631,800)
(473,800)
(595,100)
107.9%
92.9%
98.3%
97.3%
Actuarial value of assets
- Active participants & disabled
individuals
- Retirees & beneficiaries
- Deferred pensions and cases
pending
Total assets
Surplus (lack of assets)
Degree of solvency (2)
(1) : The
solvency ratio is calculated on the basis of a hypothetical wind-up. The solvency ratio made on the basis of solvency is
a 3-year average ratio.
SOLVENCY REVIEW
140%
120%
101 %
98 %
95 %
100%
92 %
88 %
94 %
93 %
2012
2013
98 %
98 %
80%
60%
40%
20%
0%
2006
2007
2008
2009
2010
2011
2014
CAPITALIZATION REVIEW
Value of asset
As at December 31, 2013
As at December 31, 2014
($)
($)
23,773,500
25,684,300
7,919,500
9,792,700
12,032,900
13,666,900
- Deferred pensions and cases pending
2,067,900
1,993,700
- Provision for future indexation
1,753,200
231,000
23,773,500
25,684,300
0
0
100.0%
100,0%
Actuarial value of assets
- Active participants & disabled
individuals
- Retirees and beneficiaries
Total assets
Surplus (lack of assets)
Degree of capitalization
PLAN CAPITALIZATION
A rate exceeding or equal to 100% indicates sufficient long-term financing
142%
130 %
140%
120%
195%
95%
2009
2010
100%
100%
100 %
100%
2011
2012
2013
2014
87 %
100%
80%
60%
40%
20%
0%
2006
2007
2008
Second reality
“Addressing the economic context and changes in markets”
ACTION TAKEN TO FACE THE ECONOMIC CONTEXT AND
CHANGES IN WORLD MARKETS

Application of the liability-driven investment policy implemented
in January 2014.
Based on interest rate fluctuations and changes to actuarial liabilities, we will:
• Increase the terms of our bonds
• Reduce percentages held of Canadian, global and emerging market
countries equities
ACTION TAKEN TO FACE THE ECONOMIC CONTEXT AND
CHANGES IN WORLD MARKETS
In 2014, four meetings of the Investment Committee were held where the
emphasis was placed on:
• Returns achieved versus returns anticipated
• Very close monitoring of managers and meetings with them
• Regular adjustments to the portfolio to ensure that it remained closely on
target
This allowed us to obtain a very appreciable return 12.56% for 2014, with an
added value of 1.91% equivalent to an additional $475,000 for the FNPSPP.
MASTER TRUST FUND PERFORMANCE
Year
1 year
4 years
10 years
2014
12.56 %
9.0 %
6.5 %
2013
14.6 %
8.1%
6.2%
2012
7.7%
9.0%
6.3%
2011
1.6%
2.1%
4.7%
2010
9.1%
1.8%
4.8%
2009
18.3%
2.8%
5.1%
2008
-17.1%
0.9%
4.9%
2007
0.6%
8.0%
7.7%
2006
13.4%
11.8%
8.7%
2005
9.4%
6.4%
8.9%
 For 2014,
return of 12.56%
 Added value of
1.91% in relation
to the target
Third reality
“Responding to members’ growing needs in a context of increased
administrative complexity”
ACTION TAKEN TO RESPOND TO MEMBER’S GROWING NEEDS IN A
CONTEXT OF INCREASED ADMINISTRATIVE COMPLEXITY
As indicated on several different occasions, the FNPSPP is a very complex
pension plan to administer for several reasons:
• Number of categories
• Members’ status
• First Nations’ specificities
• Amendments reducing benefits implemented
In light of this context, we must:
• Develop our own data calculation processing systems
• Ensure their operation and updating
• Ensure at all times that they are secure
Directions and goals for 2015
Based on the 2015-2018 Strategic Plan
MAIN GOALS ESTABLISHED FOR 2015
ISSUE 1 – PROFITABILITY, SOLVENCY AND SUSTAINABILITY
The nature of the organization and regulatory environment in which the FNPSPP
operates requires careful management to ensure the profitability, solvency and
sustainability of defined benefits plans.

Axis 1.1
Ensure the sustainability of defined plans

Axis 1.2
Retain our clientele
MAIN GOALS ESTABLISHED FOR 2015
ISSUE 2 – CUSTOMER SERVICE DEVELOPMENT
The FNPSPP wishes to offer improved customer service so members are better
informed of their rights and options in a context of increasingly complex pension
plans and financial sectors.

Axis 2.1
Develop IT tools facilitating access to reliable, adapted
information

Axis 2.2
Develop information documents

Axis 2.3
Strengthen advisory services
MAIN GOALS ESTABLISHED FOR 2015
ISSUE 3 – ACHIEVEMENT OF ORGANIZATIONAL MATURITY
In its more than 35 years of existence, the organization has changed over the years
and experienced rapid growth. We believe that achieving organizational maturity is a
key requirement to be fulfilled prior to considering the next stages of organizational
development.

Axis 3.1
Strengthen human resources

Axis 3.2
Maintain strong governance

Axis 3.3
Develop means of communication and marketing; increase
our visibility

Axis 3.4
Strengthen our compliance practices and risk management

Axis 3.5
Rely on dependable technology tools that maximize
efficiency
MAIN GOALS ESTABLISHED FOR 2015
ISSUE 4 – GROWTH AND EXPANSION
For several years, the FNPSPP has contemplated expanding its range of products
and services, and geographical reach. However, this cannot take place without
first consolidating our current clientele.

Axis 4.1
Optimize the potential in Quebec

Axis 4.2
Canvass for expansion outside Quebec
MAIN GOALS ESTABLISHED FOR 2015
Concerned
organizations
Objectives
Deadlines
NBP & FNPSPP
Achieve solvency ratios above 100% for the plans
2015 et +
NBP
Plan financing
2015
NBP
Plan compliance with provincial jurisdiction
2015
NBP & FNPSPP
Portfolio investment management
2015 and +
NBP & FNPSPP
Allow members to access their information online
2015
RBA Foundation
Increase our sense of belonging
2015 and +
NBP
Manage the risk associated with replacing the General
Manager
2015
NBP & FNPSPP & RBA FG
Develop business continuity planning
2015 and +
NBP & FNPSPP & RBA FG
Develop and deploy a computer security management and
legal compliance system
2015 and +
N.B. These objectives are based on the conclusions of the new, recently implemented 2014-2018 strategic plan.
Ratification of Action Taken by the Retirement
Committee in 2014
By
Mr. Sylvain Picard, CPA, CA, CGA, Asc. Adm. A.
General Manager
RATIFICATION OF ACTION TAKEN BY THE RETIREMENT COMMITTEE
Resolution No. Meeting Date
20032014-A
Subject
20032014-B
March 20, 2014 Recommendation of an actuarial firm for the actuarial valuation
as at December 31, 2014
March 20, 2014 2014 action plan
20032014-C
March 20, 2014 2014 budget
19062014-A
June 19, 2014
Audited financial statements as at December 31, 2013
19062014-B
June 19, 2014
Actuarial valuation as at December 31, 2013
19062014-C
June 19, 2014
Transfer agreement with the Sûreté du Québec
RATIFICATION OF ACTION TAKEN BY THE RETIREMENT COMMITTEE
Resolution No.
Meeting Date
Subject
19062014-D
June 19, 2014
27082014-A
August 27, 2014
Nomination of Directors
27082014-B
August 27, 2014
Nomination to the Investment Committee
Transfer agreement with the RCMP
04122014-A
December 4, 2014 Account auditors for fiscal year ended December 31, 2014
04122014-B
December 4, 2014 Membership of a new employer
Varia
August 26, 2015 • Hôtel Musée Premières Nations