October 10, 2007
The primary purpose of this report is to review the actuarial valuation of the Non Academic
Pension Plan as at December 31, 2006. This report also includes a review of the funding requirements, investments and investment performance of the Plan in 2006 and for the six months ending June 30, 2007.
Going-Concern Financial Position of the Plan
The financial position of the Plan on a going-concern basis is measured by comparing the market value of assets to the actuarial liabilities assuming the Plan is continuing for the longterm. The actuarial valuation performed as at December 31, 2006 shows that the Plan, on a going-concern basis, is in a surplus position of $1.4 million as per Table 1. Comparative numbers as at December 31, 2004 (when the last valuation was done) are also provided.
Table 1: Going-Concern Financial Position
Assets
Actuarial Fund Value (net assets available for pension benefits)
Actuarial Liabilities
2006 2004
$281,105,500 $254,241,600
Present value of accrued benefits for active members (1,416)
Pensioners (583)
Inactive, deferred and pending terminations (82)
Voluntary and Transferred contributions
$144,605,700
$63,512,400
$1,404,100
$99,700
Present value of future benefits to be paid in excess of future contributions $69,998,300
$127,056,200
$57,537,400
$1,306,100
$89,200
$67,233,800
Total Liabilities
Surplus as at December 31, 2006
$279,620,200 $253,222,700
$1,485,300 $1,018,900
Solvency Position of the Plan
The Pension Benefits Act (Saskatchewan) requires the University to review whether the assets of the Plan would be sufficient to cover the liabilities of the Plan in the event of a plan windup.
The actuary has concluded that the Plan is solvent as at December 31, 2006 as the market value of the assets exceeds the actuarial liabilities of the Plan on this date. The solvency surplus is estimated to be $24.205 million as of December 31, 2006 (solvency surplus at
December 31, 2004 was $31.104 million).
The Pension Benefits Act (Saskatchewan) also requires that Plan members must be informed if
Plan surplus will be used to cover future promised benefits that cannot be covered by the contribution rates that are currently in effect. The actuary has concluded that current
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This communication, future communications and other pension plan information are available online at: www.usask.ca/hrd/benefits

contribution rates are insufficient to pay for the benefits currently accruing to members of the
Plan. It is estimated that the benefits currently accruing to members cost 15.87% of pensionable earnings, whereas the current contribution rates amount to 9.84% of pensionable earnings. The contribution shortfall, 6.03% of pensionable earnings, amounts to $69,998,300
(see Table 1 “Present value of future benefits to be paid in excess of future contributions”) and has been deducted in calculating the Plan surplus on a going-concern basis.
Since the Plan does not have a solvency deficiency as at December 31, 2006, no additional employer contributions other than those outlined above are required.
The long-term investment goal of the Plan is to achieve a minimum annualized rate of return of
3.50% in excess of the Canadian Consumer Price Index. To achieve this goal, the Plan has adopted an asset mix that has a bias in favour of equity investments. Over the last ten years the annualized rate of return for the Plan has been 8.8% compared to an annualized increase in the
Consumer Price Index of 2.0%.
The responsibility for investing the assets of the Plan has been delegated to three professional investment fund managers with different mandates to ensure adequate investment diversification.
Investment Performance
For 2006
Plan Return (gross) 12.7%
Plan Return Benchmark (gross) 12.7%
Last 4 years
11.7%
11.7%
The Plan’s Return Benchmark is a performance standard developed by the Investment
Consultants, Hewitt Associates. The Non Academic Fringe Benefits Committee and the Board of Governors have approved the benchmark. The investment fund managers of the Plan are expected to meet or surpass the benchmark.
To the end of June, 2007 equity markets were strong, particularly in those areas where oil stocks comprise a major part of the index. The Canadian stock market was one of the best performers in the world, and the broader U.S. market was not far behind. The 8.4% gain of the Canadian dollar during the second quarter caused the U.S. returns to be a negative number when expressed in
Canadian dollars. Global growth continues to be fuelled by the less developed economies; in particular, China. It was a dismal quarter for the bond market as rising inflation and unexpectedly strong economic growth moved yields upward across the maturity spectrum.
Inflation is rising and thus the Bank of Canada raised rates 0.25% in July. The consequence of the
Bank of Canada’s action has been an unprecedented rapid rise in the Canadian dollar compared to the U.S. dollar. The Canadian dollar continues to track the price of oil as high oil prices result in significant inflows into Canada. It is also boosted by the sizable takeovers of Canadian companies by foreign investors who must purchase Canadian dollars to complete their transactions (report by
Jarislowsky Fraser Limited – July, 2007).
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This communication, future communications and other pension plan information are available online at: www.usask.ca/hrd/benefits

The six month rate of return earned by the Plan was 1.4% before expenses. During the same period, the S&P/TSX index returned 9.1%, the S&P 500 (U.S. equities) returned -2.2% and the
Europe, Australia and Far East (EAFE) index, which measures non-North American equities, increased by 1.2%. The Scotia Bond Universe posted a -0.8% return.
The managers and the market value of assets controlled by each at December 31, 2006 are shown below.
Jarislowsky Fraser Limited $113.7 Million
Phillips, Hager & North Investment $130.9 Million
Sceptre Investment Counsel $ 9.5 Million
Table 2 shows the value of the Pension Plan as at December 31, 2006 by major asset classes.
TABLE 2: Market Value of Pension Plan Assets
Asset Class
Canadian Equities
Non-Canadian Equities
Total Equities
Dec 31, 2006
($000)
$ 80,875
78,536
159,411
Per Cent of
Market Value
31.8%
30.9%
62.7%
Bonds
Mortgages
Short-Term Investments
Total Fixed Income
Market Value of Investments
Accrued Investment Earnings
Total Market Value of the Fund
$ 82,665
5,211
6,760
94,635
$ 254,046
987
$ 255,033
32.5%
2.1%
2.7%
37.3%
100.0%
The AFBC met 14 times during 2006. Copies of the agenda, minutes, auditor’s report, financial reports and all actuarial reports are on file in the CUPE Union Local office and the office of the
Director, Benefits and Pensions (Human Resources). They are available for inspection by any member of the Plan during regular working hours by prior arrangement.
Please contact the Benefits Office at 966-6633 or any member of the Non Academic Fringe
Benefits Committee if you have any questions about the items covered.
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This communication, future communications and other pension plan information are available online at: www.usask.ca/hrd/benefits

Non Academic Pension Plan Information
Non Academic Fringe Benefits Committee
Members
CUPE Union Local 1975 Appointees:
Board of Governors Appointees:
Observers
Actuary
AON Consulting
Investment Consultants
Hewitt Associates
Investment Custodian
CIBC Mellon Global Securities
In Memoriam
The Non Academic Fringe Benefits Committee and the University was very saddened by the sudden passing of Marjorie Clelland this past summer. Marjorie was a member of the NAFBC since
1997 as a CUPE representative and her contributions and knowledge will be greatly missed by the
Committee.
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This communication, future communications and other pension plan information are available online at: www.usask.ca/hrd/benefits