PEBT CONFERENCE

November 26th and 27th 2013

Today’s Program Schedule

AM

PM

9:00-10:00

10:00-11:00

11:30-12:15

12:15-1:15

1:15-2:15

2:15-2:45

PEBT Financial and LTD Overview with Rob Hewitt, PEBT Trustee and Ray Parker, Desjardins

Guest Speaker Dr. Susan Biali: Wellness Expert, Medical Doctor and Life Coach

Break

JEIS Audit Review with Rob Hewitt, PEBT Trustee and Rochelle Morandini, Morneau Shepell

Lunch

Guest Speaker Rebecca Marino: Tennis Star, Speaker on Mental Health and Cyber Bullying

Q & A and Conference Closing

11:00-11:30

FINANCIAL SUMMARY

Financial Summary

• Long Term Disability (LTD)

• Predominant benefit

• Funding for Core LTD - $19.4M

• PEBT must work within funding for Core LTD- excess of funds can increase benefit- shortage of funds must decrease benefit

• JEIS funding initially loaned by government

• Other Benefits

Long Term Disability

• 20,915 active members (December 31, 2012)

• Total number of active claims under 5 years increased marginally in 2012 to 578 compared to 567 claims in 2010

• An additional 141 claims are being paid beyond 5 years (durational pooling limit) as of December 2012

• LTD Program costs have increased in 2012

Financial Summary

$10.0$11.9 $11.2

$16.2

$20.8

$16.5$14.6 $13.9 $14.8

LTD Program CostsMILLIONS OF DOLLARS

Financial Summary

$1.2

$3.0

$4.7

$6.2

$7.2 $7.3 $7.5 $7.3 $7.3

LTD Benefit PaymentsMILLIONS OF DOLLARS

Financial Summary

$0.5 $0.6$0.7

$0.9

$1.1

$1.3

$1.1$1.2

$1.3

JEIS Program CostsMILLIONS OF DOLLARS

Financial Summary

PEBT Causes of Disability – Full Benefit Claims

Nervous system and sensory organs

8%

14%

28% 19%

13%

5%

Accidental fractures – bones and skeletal muscles

Diseases of the skin – bones and skeletal muscles

Neoplasms

Mental disorders

Heart and circulatory system diseases

Other Benefits

• Plan design and funding in accordance with Collective Agreements

• Economies of scale

• Reduced expense charges

• Managing risk to reduce benefit costs

• Shared services approach (common administration system) = efficiencies/savings

Other Benefits

Basic Group Life

• Pooled with other Districts

• Paid $2.7M in claims in 2012

• Premium is based on overall Plan claims experience

Other Benefits

AD&D (including optional)

• Pooled with “similar block of business”

• Paid claims in 2012:- No Basic AD&D claims

- One Optional AD&D claim totalling $200,000

Other Benefits

Extended Health Care (EHC)

• ASO with Stop-Loss for large claims- Stop-Loss coverage for large claims

transfers risk to insurer

• Small Districts initially had opportunity to enter into a pooled arrangement

Other Benefits

Extended Health Coverage

• Approximately 20,980 covered members

• $19.9M claims paid in 2012

• 3.7% increase in extended health claims from 2011 to 2012

• Number of members increased slightly from 2011

• Primary cost drivers: drugs and paramedical services

Other Benefits

PEBT EHC Claims – 2012

Medical supplies/equipment

2%

22% 60%

9%

7%

Paramedicals

Vision Care

Drugs

Other

Other Benefits

Top 5 Drugs by Category as a Percentage of Total Drug ClaimsJANUARY-DECEMBER 2012

25%

17%

7% 7% 6%

Central Nervous System

Cardio-vascular

Gastro-intestinal

Anti-infective agents

Anti-diabetic

Other Benefits

• Approximately 21,000 covered members

• $23.1M claims paid in 2012

• 2.6% increase in Dental claims from 2011 to 2012

• Number of members increased slightly from 2011

• Primary cost drivers: new and expensive treatments, aggressive marketing by dental community

Dental Coverage

Other Benefits

PEBT Dental Claims – 2012

22%

70%

8%

Major

Basic

Ortho

Investment Summary

• Investment strategy – actively managed

• Funds distributed between two investment managers:- bcIMC

- Mawer

• Mawer replaced McLean Budden June 2012- Performance was consistently below

benchmark

- Ownership changes

• Investment Committee continuously reviews investment diversification

This led to a search for another investment manager

Investment Summary

• Market fluctuations impact PEBT ability to support the fund

PEBT Fund Returns

Investment returns

2008 2009 2010 2011 2012

-10.2% 14.3% 8.1% 1.9% 8.4%

Annual Reports

• 2011 annual report as well as previous reports are available on the PEBT website

• Includes audited financial statements

• 2012 annual report will be available on the website in mid-December

Available at: www.pebt.ca

Questions?

Up Next

LTD Overview

Ray Parker, Manager Disability Claims, Desjardins Financial Services

Long Term Disability Benefit

• For Members who are regular employees working 15 hours or more per week with the Employer

• 66.67% of monthly earnings from the Employer

• $50 per month minimum benefit

• $10,000 per month maximum

• 120 calendar days elimination period

First 24 Months

• Elimination period

• Regular duties

• 'No surprises' approach

• Change of definition

• Any occupation 60%

• Transferrable skills analysis

Limitations and Exclusions

• Pre-existing conditions

• Layoff

• Committing or attempting to commit a criminal offence

• Riot, insurrection or civil commotion

• Alcohol and drug abuse

• Driving while impaired by drugs or alcohol

Offsets

• Paid Sick Leave

• WorkSafe BC

• Canada Pension Plan

• ICBC Part VII Benefits

Third Party Claims

• Types of claims

• Reimbursement Agreement

• Settlement follow-up

• Repayment

• Net Settlement

Termination of LTD Benefits

• No longer disabled

• Neglects or refuses to provide proof of disability or undergo a medical examination

• Outside of Canada for more than 2 weeks; 2 months

• Death or retirement

• 55 years of age and 35 years of pensionable service

• Fails to comply with third party claim requirements

• Not under continuing medical care

• Refuses to participate in disability management program

Appeals

• Encouraged to provide within 60 days

• Supervisor review

If there is additional information

• Medical Appeal

- 60 days/One year

- Medical grounds only

- Three physicians

- Final

If there is no additional information

Questions?