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Pension Department rules and regulations Canadian Pacific Railway Company. Pension Department Sep 15, 1936

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 CANADIAN PACIFIC RAILWAY COMPANY
OFFICE OF THE CHAIRMAN AND PRESIDENT
Montreal, September 15, 1936.
Effective January 1, 1903, the Company inaugurated
a system of voluntary pensions without contribution
from the employees, in order to provide for those who,
after many years spent in the faithful performance of
their duties, retire from active service.
The changes in conditions that have since taken place,
more particularly in recent years, have made it clear
that the continuance of the present system would
eventually impose upon the Company financial burdens
which it would be unable to bear.
In view of this, the Company has for some time past
had under consideration such changes in the system as
will give reasonable assurance that in the absence of
circumstances beyond its control the payment of pensions upon the present scale may be continued. The
results of the studies made have indicated that from the
standpoint of both the Company and employees the
simplest and most satisfactory plan would be to adhere
as closely as possible to the underlying principles of the
present pension system, and to incorporate therein
suitable provisions for contributions by the officers and
employees, and such other changes as are necessary to
meet the altered conditions.
In order to bring about these changes, a new code of
rules and regulations has been prepared by a joint committee, composed of four representatives appointed by
the Company and four chosen by the General Chairmen
of the organized classes of employees. This new code has
been adopted by the Directors of the Company, and
will on January 1, 1937, supersede the rules and regulations at present in effect. It is hoped that all those eligible will become contributors, in order that the officers and employees, both
individually and collectively, may derive the greatest
benefit from the pension system, and that the aims and
objects sought to be attained through the inauguration
of the original pension plan may be perpetuated.
This announcement is accompanied by a set of the
new rules and regulations, a series of explanatory questions and answers, and a form of application to participate in the contributory pension system. In order to
secure full advantage of the new system all eligible
officers and employees are urged to sign and return the
application form to their Heads of Departments at as
early a date as possible.
1/*0f
Chairman and President.
V CANADIAN PACIFIC RAILWAY COMPANY
PENSION DEPARTMENT
Since a general distribution of the Pension Rules and
Regulations was made on September 15, 1936, the
following rules have been amended:—
Rule 8 (a)—Change made necessary by addition of new
Rule 30.
Rule 10 (a)—Proviso added extending right of election
in cases of employees out of the service because of
staff reduction.
Rule 11 (g)—Refunds of contributions on termination
of service.
Rule 15 (d)—Medical examinations.
Rule 19—Joint life and last survivor pensions. (To
become effective October 1, 1940).
Rule 20—Refunds of contributions to estates of deceased
pensioners.
Rule 22—Employees' Representatives.
Rule 30 — Added — Employees transferred between
Companies.
Answer to Question 16, relating to Trust Fund proportion of pension, has been revised.
Question and Answer 32, relating to joint life and last
survivor pensions, have also been revised.
Question and Answer 33, relating to joint life and last
survivor pensions have been added. CANADIAN PACIFIC RAILWAY COMPANY
PENSION DEPARTMENT
RULES AND REGULATIONS
Revised to February 12, 1940
1.—For the purpose of these Rules, unless the context
Definitions.      otherwise requires:
(a) "The Company" shall be deemed to mean and
include Canadian Pacific Railway Company and any
railway, steamship or other company controlled and
operated by Canadian Pacific Railway Company.
(b) "The Board" shall mean the Board of Directors
of Canadian Pacific Railway Company.
(c) "The Committee" shall mean the Committee as
provided in Paragraph 2 of these Rules.
(d) "The Secretary" shall mean the Secretary of the
Committee.
(e) "The Actuary" shall mean the Actuary appointed
under the provisions of Paragraph 6(a) of these Rules.
(f) "The Superintendent of Pensions" shall mean the
Superintendent of Pensions appointed under the provisions of Paragraph 7 of these Rules.
(g) "Eligible employee" shall mean an employee who
is eligible for pension under the provisions of Rule 8.
(h) "Service" and "in the service" shall mean employment by the Company.
(i) "Last entry into the service" shall mean the date
upon which the employee last entered the service of the
Company as shown by its staff records.
(j) "The Trust Fund" shall mean the Canadian
Pacific Railway Company Pension Trust Fund.
V 2.—The pension system shall be administered by a Committee.
Committee of seven members, four of whom shall be
officers of the Company appointed from time to time by
the Board and three of whom shall be elected triennially
from among the General Chairmen of the organized
classes of employees of the Company having agreements
with it, by a majority vote of such General Chairmen.
Any vacancy occurring among the employee members of
the Committee shall be filled in similar manner for the
unexpired portion of the current triennial period. The
Vice-President of Finance of Canadian Pacific Railway Company shall always be one of the members
appointed by the Board, and he shall be Chairman of
the Committee.
3.—The office of the Pension Department shall be at
Montreal.
4.—Meetings of the Committee shall be held at the Meetings.
Head Office of the Company at 10 o'clock in the morning of the first Tuesday in each month. Other meetings
may be held at the call of the Secretary on at least
seven days' notice to the members. If the day appointed
for a meeting shall fall on a legal holiday the meeting
shall be held at the same hour on the day next following
which is not a legal holiday.
5.—(a)   At   all   meetings   of   the   Committee   four  Quorum,
members shall constitute a quorum. In case there be no
quorum present on the date fixed for the meeting, the
members present may adjourn the meeting from time
to time until a quorum can be obtained.
(b) In the event of one or more of the Officer Members of the Committee being unable to attend any meeting, the remaining Officer Members or Member may
elect from among the Officers of the Company one substitute for such meeting, and in the event of one or more Powers.
of the Employee Members of the Committee being
unable to attend any meeting, the remaining Employee
Members or Member may select from among the
General Chairmen referred to in Rule 2 one substitute
for such meeting.
(c) At all meetings of the Committee each member
shall have one vote and the Chairman of the meeting
shall, in the event of a tie, have a casting vote. In the
absence of the Chairman the members shall choose one
of their number to act as Chairman.
6.—(a) The Committee shall, subject to the rules
herein prescribed, have power:
To determine the eligibility of employees to receive
pension allowances;
To determine the amounts of contributions, of pension allowances, and of refunds;
To prescribe the conditions under which such allowances may inure;
To retain from time to time, the services of an
Actuary, who shall be Fellow of the Actuarial
Society of America or of the Institute of Actuaries
of Great Britain, (herein referred to as the Actuary), for the purpose of valuing the Trust Fund,
of determining the percentages that may be withdrawn therefrom, and generally of performing
such other duties as may from time to time be
assigned to him by the Committee;
To retain the services of such auditors and such other
technical advisers as may be deemed necessary;
To determine from time to time the proportion of the
cost of administering the pension system to be
charged against the Trust Fund.
(b) The Committee shall make rules for its own
government, not inconsistent with these regulations.
V Supt. of
Pensions.
(c) The Committee shall from time to time, as required, make reports of its actions to the Board, which
may review, alter or rescind such actions.
(d) The Committee shall furnish to the General Chairmen of the organized classes of employees an annual
statement showing the financial position of the Trust
Fund and such other information as the Committee
shall consider desirable.
7.—The Chairman of the Committee shall appoint a
Superintendent of Pensions, who shall have charge of the
operation of the Pension Department and shall report
to the Chairman on all matters connected with the
administration of his office. The Superintendent shall
act as Secretary of the Committee.
8.—(a) Only those employees of the Company shall Eligibility.
be eligible for pension whose names are entered on its
staff records, whose last entry into its service has or
shall have occurred before attaining the age of forty
years (excepting employees transferred under the provisions of Rule 30 and subject to such other exceptions
as in special circumstances may be approved by the
Committee), and who, as full time employees, shall
thereafter remain continuously in the service of the
Company, or of the Company and some other company
or companies jointly, until they have attained an age
at which they may retire on pension under the provisions of these rules or until they have been transferred
under the provisions of Rule 30; provided, however,
that leave of absence, suspension, dismissal followed
by reinstatement within one year, or a temporary layoff on account of reduction of staff, need not necessarily
be treated by the Committee as constituting a break
in the continuity of such service.
(b) For the purpose of these rules, the names of all
employees shall be entered on the staff records of the
Staff
Registration. V
Casual or
Intermittent
Employment.
Ocean
Services.
Proof of
Age.
Statutory
Pensions.
Employees of
Acquired
Companies.
8
Company when they first enter its service, provided
that, subject to Clause (c) of this rule, the names of
employees whose early service is of a casual or intermittent nature shall not be regarded as having been
entered on such staff records until they have completed
six months' continuous service or six months' cumulative service within a period of three consecutive years,
unless, in any case, the Committee shall decide otherwise, but, for the purpose of fixing the age at last entry
into service under Clause (a) of this rule, employees who
come within this proviso shall be regarded as having
entered the service at the commencement of the six
months' period of continuous or cumulative service
mentioned in this proviso.
(c) For the purpose of these rules, the names of employees in the ocean services of the Company who are
not on the permanent staff shall not be regarded as
having been entered on the staff records of the Company so as to be entitled to contribute, and to receive
pension allowances, unless in any case the Committee
shall decide otherwise.
(d) Every employee, upon the request of the Superintendent of Pensions, shall submit proof of age satisfactory to such Superintendent.
(e) The pension system shall not apply to any employee in respect of whom the Company shall be
required at any time to make contributions to any other
pension fund or plan under any statutory enactment,
unless the Committee shall otherwise determine.
9.—(a) The service of any employee of a Company,
control and operation of which has been assumed by
Canadian Pacific Railway Company prior to January
1, 1937, shall be construed (subject to the provisions of
Rule 8) as continuous from the date since which such
employee has been continuously employed by such
s^ Company,  whether prior or subsequent to such assumption of control and operation.
(b) From and after January 1, 1937, unless otherwise
agreed by the Company as a part of the arrangement
for acquiring control by purchase, lease or otherwise of
property of any other Company or person, employees
taken over from such other Company or person must,
in order to be eligible for pension, have entered the service of such other Company or person before attaining
the age of forty years and shall be considered as having
entered the service of the Company only on the date of
such acquisition.
10.—(a) Every eligible employee in the service of the Contributors.
Company on December 31, 1936, and continuing in the
service shall be entitled to elect on or before December
31, 1937, (but not thereafter) to become a contributor
under the pension system; provided that an eligible
employee who
(i) has been laid off on account of reduction in staff,
(ii) has not been employed by the Company during
the year 1937,
(iii) is on December 31, 1937, on a seniority list of
the Company, or, if not belonging to a class of employees covered by a seniority list, can be shown
otherwise to be subject to call for service and ready
and willing to serve,
(iv) returns to the service on or before December
31, 1940, and
(v) is at the time of his return on such seniority list
or so subject to call,
shall within thirty days after the date of his return elect
whether or not he shall become a contributor under the
pension system, but that no such employee shall be
permitted to become a contributor without the approval
of the Committee. V*-
10
Contributions.
Currency.
(b) Every eligible employee entering the service on or
after January 1, 1937, shall become a contributor under
this pension system.
11.—(a) Every eligible employee in the service on
December 31, 1936, who becomes a contributor shall
make contributions equal to 3% of the salary or wages
earned. Such contributions shall commence with the
calendar month following the date at which he elects to
become a contributor, and shall be made for each and
every calendar month during which he renders service
to the Company.
(b) Every eligible employee entering the service on
or after January 1, 1937, shall make contributions equal
to 3% of the salary or wages earned. Such contributions
shall, subject to the proviso in paragraph (b) of Rule 8,
commence with the calendar month during which the
employee's name is entered on the staff records of the
Company, and shall be made for each and every calendar
month during which the employee renders service to
the Company.
(c) Contributions shall be deducted currently from
each payroll.
(d) Contributions of those employed exclusively by
the Company and paid entirely by commissions shall be
based on their average net monthly earnings during the
preceding calendar year after deducting all expenses
incurred on behalf of the Company.
(e) Contributions shall cease with the month in which
the employee attains the age of sixty-five years.
(f) All contributions made in other than Canadian
funds shall be credited to employee's account in the currency in which they are paid unless the employee is
changed to another position in which he is paid in a
different currency, at which time the accumulated con- 11
tributions shall be converted into the new currency at
the then current rate of exchange.
(g) When, before retirement on pension, the Refunds,
service of a contributor is terminated for any reason,
an amount equal to the contributions made by him
will be refunded to him or in the case of his death to
his legal representatives; provided that if no legal
representatives have been appointed and the amount
involved does not exceed the sum of $200.00, payment
may be made to such person or persons as in its sole
discretion the Committee may direct.
(h) A contributor will not be entitled to a refund of his
contributions during a period of temporary lay-off,
leave of absence or furlough, unless his service is terminated during such absence.
(i) A contributor whose contributions have been
refunded to him as provided for under this rule and who
later returns to the service shall, for the purpose of
these rules, be regarded as a new employee, provided
that a contributor whose contributions have been refunded to him on dismissal, and who is reinstated under
the proviso in paragraph (a) of Rule 8, may, within
three months after such reinstatement, repay to the
Trust Fund the amount of his contributions so refunded,
and in that event only shall the period for which such
refunded contributions were originally made by him be
included in his term of service.
12.—(a) All contributions by employees shall in the Trust Fund,
first instance be deposited in a chartered bank in a
separate account to the credit of the Trust Fund of
which Canadian Pacific Railway Company shall be
trustee, which Trust Fund shall not form any part of the
revenues or assets of the Company. The Trust Fund
shall be administered by the Trustee subject to the
provisions of these rules and shall be invested from time 12
to time in Dominion Government Securities or securities guaranteed by the Dominion Government.
(b) From the Trust Fund thus set up there shall be
paid:
1. The cost of administering the Trust Fund.
2. Such proportion of the cost of administering the
pension system as the Committee may from time to
time determine.
3. A proportion of the pension allowance of any
contributor retiring after January 1, 1937. Such proportion shall be determined and certified to from time
to time by the Actuary, and unless the Committee
shall otherwise direct shall be expressed as a percentage of that portion of the total pension which accrues
in respect of the period for which the employee has
made contributions. The proportion so determined
shall not be increased until such time as the fund shall
be found to be in a position to bear 50% of the cost
of all pensions emerging thereafter.
4. Refunds payable under Rule 11 (g).
5. Amounts payable under Rule 20.
13.—(a) The Company shall pay in to the Trust Fund
monthly an amount equal to 25% of any allowances
paid pursuant to Rule 21, except the minimum allowances provided for in the said rule or allowances which
are commuted under the provisions of said rule. Such
payments into the Trust Fund will be applied from time
to time for the purpose of increasing the proportion of
the pension allowances which the Trust Fund would
otherwise provide.
(b) The Company may from time to time make contributions directly to the Trust Fund, to be applied in
accordance with the directions of the Board, for the
purpose of increasing the proportion of the pension 13
Retirement
Age.
allowances  which  the  Trust  Fund  would  otherwise
provide.
14.—All employees who have attained the age of
sixty-five years shall be retired; provided, however, that
the Company may, with the concurrence of the employee and in the case of those whose working conditions
are provided for by agreement with the approval also of
the Committee, retain in the service any employee who
has reached such age if in the judgment of the Company it is in its interest to do so. Eligible employees
shall receive a pension allowance on retirement.
15.—(a) Any eligible employee between the ages of
sixty and sixty-five may, at the discretion of the Committee, be retired with a pension allowance either upon
the application of such employee or upon the recommendation of the Head of the Department to which he
belongs.
(b) Any eligible employee, who between the ages of
sixty and sixty-five is laid off on account of reduction
in staff and maintains his employment relation with the
Company will at age sixty-five be eligible for pension
allowance.
(c) The Committee shall have power, subject to the
approval of the Board, to retire with a pension, in
special circumstances, an eligible employee who has not
reached the age of sixty years.
(d) Every employee recommended for retirement with
pension who is under sixty-five years of age shall, unless
otherwise determined by the Committee, be physically
examined by a medical officer of the Company, whose
report and recommendation shall be transmitted to
the Committee for consideration in dealing with the
case.
16.—At least six months' notice shall be given to  Retirement.
Medical
Examinations 14
Calculating
Contributors'
Service.
Calculating
Contributors'
Pension
Allowances.
employees who are to be retired on pension, except those
referred to in Rule 15.
17.—In calculating the period of service of a contributor, one month's service shall be allowed for every
calendar month during which the employee has, or shall
have, rendered service to the Company since his last
entry into the service and twelve such months shall
equal one year's service; provided, however, that in calculating service subsequent to January 1, 1937, only
those months in which the employee shall have rendered service and made contributions shall be allowed.
18.—Pension allowances to contributors shall be calculated in the following manner:
(a) For each year of service, calculated as in Rule
17, the allowance shall be one percent of the average
monthly pay received for the ten years of service (so
calculated) preceding retirement, or preceding the
date upon which the employee attained the age of
sixty-five years, should he be retained in the service
after such date; for example, in the case of an employee who has forty years' service and has received
on an average for the last ten years one hundred
dollars per month, the pension allowance would be
forty percent of one hundred dollars or forty dollars
per month.
(b) No pension granted under this rule shall be less
than twenty-five dollars per month, except in the case
of employees paid in currency other than Canadian
and employees taken over from other companies as
referred to in Rule 9(b), as to whom the application
of this rule shall be subject to the discretion of the
Committee.
Optional 19.—(a) Any contributor may elect to receive in lieu
Allowance to       f    . . t1 .., .       _,   ,
Dependent.      ot the pension allowance granted under Rule 18, an
Minimum.
V 15
allowance payable to himself during his life, subject to
the condition that one-half of the allowance will be
continued to his wife should she survive him.
(b) Any contributor who is unmarried or widowed
may, with the approval of the Committee, elect to
receive in lieu of the pension allowance granted under
Rule 18, an allowance payable to himself during his
life, subject to the condition that one half of the allowance will be continued to such dependent as he may
appoint.
(c) No election under the foregoing paragraphs of
this rule shall be valid unless the contributor gives
written notice to the Superintendent of Pensions at
least six months prior to the date upon which the contributor will have attained the age of 65 years; provided, however, that in the case of retirement under
paragraphs (a) and (c) of Rule 15, the election may be
made at any time prior to retirement, in which event,
notwithstanding anything in paragraph (e) of this rule,
no survivor pension shall be payable unless the contributor shall survive at least six months after the date
of such election.
(d) An election may be revoked upon death of the
wife or other named dependent or upon dissolution of
the contributor's marriage if such event shall have
taken place prior to the date upon which the contributor
shall have attained the age of 65 years and before the
contributor shall have retired on pension. In such event
the contributor may elect, within one month, to receive
upon retirement a pension allowance calculated under
R-ule 18, or may appoint another dependent to whom
a survivor pension may become payable in accordance
with the provisions of this rule. Save as aforesaid, any
election to take a joint survivor pension under this rule
shall be irrevocable whether or not the contributor
J 16
Deceased
Pensioners,
Refunds.
Calculating
Non-Contributors'
Pension
Allowances.
shall have been retained in service after he shall have
attained the age of 65 years.
(e) The allowance to the survivor shall accrue and
become payable upon the death of the contributor,
but, if such death occurs before the contributor shall
have attained the age of 65 years, then, subject to the
proviso of paragraph (c) of this rule, only if the contributor shall, prior to the time of his death, have
retired under the provisions of pargaraphs (a) or (c) of
Rule 15.
(f) The optional allowances referred to in this rule
shall be calculated in accordance with the methods
prescribed from time to time by the Actuary.
(This revised rule shall become effective October 1,
1940.)
20.—When the pension payments made under these
rules cease by reason of the death of a contributor or
the death of both the contributor and the wife or
dependent to whom a survivor pension may be payable,
before the amount of the pension payments (including
the proportion voluntarily contributed by the Company) has equalled the amount of contributions made
by said contributor, the difference shall be paid to the
contributor's legal representatives; provided that if no
legal representatives shall have been appointed and
the amount involved does not exceed the sum of
$200.00, payment may be made to such person or
persons as in its sole discretion the Committee may
direct.
21.—All eligible employees in the service on December 31, 1936, who do not on or before December 31,
1937, agree to contribute, shall upon retirement under
the provisions of these rules be granted a pension allowance calculated in the following manner:
^ 17
(a) For each year of service prior to January 1,
1937, calculated as under the pension system heretofore in effect, an allowance of 4/5 of 1 % of the average
monthly pay (so calculated) received for the 10 years
preceding such date, or such part thereof as the employee may have been in the service, if his last entry
into the service was subsequent to December 31,
1926. No pension allowance granted under this rule
shall be less than twenty-five dollars per month
except that, in the case of employees who entered the
service after January 1, 1912, the annual pension
allowance shall not be less than the equivalent of
twelve dollars for each year of service subsequent to
his last entry into the service and prior to January 1,
1937.
(b) Any employee whose pension allowance shall
have a commuted value of less than five hundred
dollars, calculated in accordance with the methods
prescribed from time to time by the Actuary, shall
be paid such value in a lump sum. In case such commuted value is more than five hundred dollars and
less than one thousand dollars, calculated as above
provided, the Committee may direct the payment
of such value in a lump sum.
22.—(a) Employees absent on leave and during such Employees'
absence employed as General Chairmen, Assistant ^-ePresenta-
General Chairmen, Vice-Presidents, Dominion Legislative Representatives (or in any other official positions
approved by the Board) of Labour Organizations who
represent classes of employees having agreements with
the Company governing wages and working conditions,
or in any elective public or representative capacity
approved by the Board, shall, for the purpose of these
rules and subject to the provisions of this rule, be
regarded in all respects as employees actively at work War Service.
Payments.
Pay-rolls.
18
in the service of the Company. The contributions and
pension allowance of any such employee when on full
time leave shall be calculated on a full time basis for
the highest paid position in the territory in which he
holds seniority rights, to which he could have attained,
under the working agreement from time to time applicable to him, if he had remained in the active service of
the Company.
(b) The monthly contributions to be made by any
such employee in each year shall be based on the average
monthly compensation calculated under the preceding
paragraph for the next preceding calendar year.
(c) Notwithstanding anything contained in Clause
(a) or Clause (b) of this Rule, the contributions and
pension allowance of any such employee, who may be
absent on leave and employed as referred to in Clause
(a) during part only of a year, may, if so approved by
the Committee, be calculated on the compensation that
would have been earned by him during the time that
he would have worked for the Company had he not
been so absent on leave.
23.—The period during which employees were absent
on leave to serve the cause of the Allies during the War,
1914-1918, shall be included in the period of total service
for the purpose of calculating pensions.
24.—When pension allowances are authorized pursuant to these rules, they shall be paid monthly and the
first payment shall, unless otherwise determined by the
Committee, be made on or about the 15th day of the
month following that in which the pension is made
effective.
25.—Pay-rolls covering all pension allowances,
showing the names of those to whom such allowances
have been made and the amount of such allowances,
shall be prepared at the close of each month by the
v 19
Superintendent of Pensions; shall be certified by him;
shall be countersigned by the Chairman of the Committee; and shall be forwarded to the Accounting
Department for registration and payment.
26.—In the case of an employee or a pensioner who in
the opinion of the Committee is irresponsible or of unsound mind, any amount payable under these rules may
be paid to such person or persons as in the opinion of the
Committee are best qualified to administer the same,
whether or not the person to whom the payment is made
is the legal guardian or trustee of the employee or
pensioner.
27.—No pension allowance shall be assigned in whole
or in part, and in the event and during the continuance
of any seizure, attachment or garnishment thereof any
such pension allowance shall cease; provided, however,
that in the event of such allowance ceasing the Committee may, at its discretion, make an allowance not exceeding the amount of the allowance which has ceased to a
dependent of the pensioner.
28.—The acceptance of a pension allowance does not
debar a retired employee from engaging in other business, but such retired employee cannot so engage in
other business or re-enter the service of the Company,
except with the consent of the Committee.
29.—The Superintendent of Pensions shall keep
himself informed of the whereabouts of all pensioners,
and shall require satisfactory evidence from each of
such pensioners, at least once a year, that he is not debarred from receiving a pension under these rules.
30.—(a) This Rule shall apply only in the case of
an employee who has been or shall be transferred under
proper authority and who shall have been, up to the
date of his retirement on pension, continuously in the
service of this Company (being "The Company" as
Irresponsible
Pensioners.
Garnishment.
Employment
after
Retirement.
Pensioners'
Reports.
Transfers
between
Companies. 20
defined in Rule 1 (a)) and of any other company (hereinafter referred to as the "Other Company") which has
an agreement with this Company for the preservation
of pension privileges of transferred employees;
(b) An eligible employee who has been or shall be so
transferred shall upon retirement, whether retirement
takes place while such employee is in the service of
this Company or of the Other Company, receive from
this Company a pension allowance in respect of his
service with it;
(c) If the employee has been a contributor (or being
entitled to do so by the Pension rules of the Company
from which he transfers, has elected to become a contributor) he must become a contributor to the Pension
Fund of the Company to which he transfers unless the
latter Company has no contributory pension system,
and his pension allowance from this Company shall be
based upon his service with it, but the percentage provided for in Rule 18 (a) shall be applied to the average
monthly pay received for the ten years of service (calculated as in Rule 17) preceding retirement or preceding the date upon which the employee attained the
age of 65 years, should he be retained in the service
after such date, irrespective of the Company from
which such pay was received during such ten year
period;
(d) If the employee, being a non-contributor, has
been or shall be so transferred from this Company to
the Other Company, he shall upon retirement be
granted a pension allowance based upon his service
with this Company and calculated under Rule 21;
(e) If the employee, being a non-contributor, has
been or shall be so transferred from the Other Company
to this Company, he shall be treated, for pension purposes, as though he were a new employee entering the 21
service of this Company, unless, being otherwise
eligible under the Pension Rules of the Other Company,
he was or shall have been a non-contributor by reason
of the fact that such rules did not provide for contributions by employees, in which event, he shall be
treated in all respects as having been a contributor at
the time of such transfer;
(f) If the employee, being a contributor, has been
or shall be so transferred either to or from this Company, the minimum pension allowance granted in respect of his service with this Company shall be equal
to but not greater than the proportion of twenty-five
dollars per month which his service with this Company
bears to his total service with this Company and the
Other Company;
(g) An employee so transferred shall be entitled to
have his contributions refunded to him only upon final
termination (otherwise than by retirement on pension)
of his employment with the Company to which he shall
have been last transferred;
(h) In the case of employees who have been or shall
be so transferred refunds of contributions shall be paid,
or pension payments shall commence, only after production of a certificate of the Superintendent of Pensions, or other duly authorized officer administering
the pension system of the Company in whose service
the employee is at the time, certifying that such
employee has terminated his employment (other than
by a transfer to which this Rule applies) or has been
retired, as the case may be.
31.—(a) The establishment and continuance of this  partidStion
system of pensions insofar as the Company's contributions are concerned is purely voluntary on the part of
the Company, which reserves the right to alter, suspend
or discontinue from time to time and in whole or in 22
Misconduct.
Pension
Allowances
under
Former
Rules.
Effective
Date.
part its contributions towards pension allowances or to
the Trust Fund, and neither such establishment and
continuance nor any action at any time taken by the
Board or the Committee shall be construed as giving
to any employee or pensioner a legal right or claim to
any allowance from the Company for pension. While
it is the policy of the Company to encourage its employees to remain with it, and by faithful service, to
qualify for pension allowances, nothing contained in
these rules shall diminish or affect any right which it
otherwise has to discharge any employee at any time
when the interests of the Company in its judgment
may so require, without liability for any claim for any
pension or allowance, other than salary or wages owing
and unpaid, and for the repayment of the contributions,
if any, made by the employee under Rule 11.
(b) Notwithstanding anything contained in these
rules, the Company may cancel its voluntary proportion
of any pension whenever it is established, in the opinion
of the Committee, that a pensioner is guilty of serious
misconduct.
32.—Nothing in these rules and regulations shall be
deemed to prevent the payment of pension allowances
under the pension system previously in effect to those
already on pension, and to eligible employees, who, being
more than sixty-five years of age, are, on January 1,
1937, retained in the Company's service, and to whom
pension allowances may be made under the provisions
of such previous system.
33.—These rules and regulations shall take effect on
January 1, 1937, and may be altered, added to or repealed from time to time as the Committee, subject to
the approval of the Board, may hereafter determine. 23
EXPLANATORY
Questions and Answers
Question—When does this new pension system go
into effect ?
Answer—January 1, 1937.
Question—Why is it necessary to change the pension system ?
Answer—Changed conditions since the inauguration of the pension system previously in effect
have added so largely to the cost of pensions that
it is necessary that such increasing cost be shared
through contributions from the employees in
order to give reasonable assurance that, in the
absence of circumstances beyond the control of
the Company, the payment of pensions upon the
previous scale will be continued.
Question—What will happen to the previous pension system ?
Answer—As of December 31, 1936, it will be superseded by the new system, particulars of which are
set out in the accompanying rules and regulations which do not affect pensions previously
granted or authorized. Provision is made for
service pensions to present employees in respect
of their service up to the above-mentioned date.
Question—Who are eligible for pensions under the
new system ?
Answer—Employees who have entered or shall
enter the service before age 40 and who remain
in the service until age 65, unless sooner retired
under the provisions of the rules.
Question—If an employee enters service at 30 years
of age and is continuously in service until he is
aged 41, at which time he is laid off on account of 24
reduction in staff, and is not again required until
43 years of age at which time he returns to service, what effect would this lay-off of two years
have upon pension privileges of such employee ?
Answer—This lay-off will not make the employee
ineligible for pension but the two years will not
be counted in his term of service.
Question—An employee under 40 years of age enters
the service January 1, 1937, works until March
31, 1937, and is then laid off. On January 1,
1938, he returns to service and works until
February 28, 1938, and is again laid off until
July 1, 1939, when he returns to service and is
continuously employed. On what date will he
be shown as entering the service and when will
contributions begin ?
Answer—As his early service is of an intermittent
nature he will be shown as entering the service
January 1, 1937, and commence to contribute on
completion of six months' cumulative service on
August 1, 1939, from which latter date service
for pension purposes will be calculated.
Question—Must an eligible employee in the service
prior to January 1, 1937, become a contributor
on that date ?
Answer—No. He has until December 31, 1937, to
decide. However, should he elect to contribute
his term of service will not include the months in
1937, for which contributions may not have been
made and it is therefore to his advantage to become a contributor from January 1, 1937.
Question—Must an employee under 40 years of age
entering the service after December 31, 1936,
become a contributor ? 25
Answer—Yes. This will be a condition of employment in the case of all such employees entering
the service on or after January 1, 1937.
9.   Question—An employee earns A. $75.00, B. $100.00,
C. $150.00, D. $200.00 per month. How much
will his contribution amount to monthly ?
Answer—A. $2.25, B. $3.00, C. $4.50, D. $6.00.
10. Question—Is the rate of contribution subject to
change ?
Answer—No change is contemplated unless and
until the Actuary finds, after this pension system
has been in effect for a number of years, that the
employees' contributions together with the Company's contributions are either more or less than
sufficient to maintain pension allowances as provided for by the rules.
11. Question—If an employee becomes a contributor
do the rules permit him while still working to
discontinue or withdraw his contributions ?
Answer—No.
12. Question—Can an employee during leave of absence,
suspension, or a temporary lay-off on account of
reduction of staff, withdraw his contributions ?
Answer—No.   Contributions  can   only  be   withdrawn if his service is terminated during such
absence.
13. Question—Will Rule 8 (b) apply to a previous con
tributor who becomes a new employee ?
Answer—Yes.  He  is subject  to the  regulations
applying to new employees.
14. Question—If an employee leaves the service and
withdraws his contributions is he permitted if
re-employed to re-deposit such contributions and 26
receive credit for the period of service covered by
them ?
Answer—No, unless in a case of reinstatement coming within the terms of the proviso in Rule 11 (i).
In all other cases he re-enters the service as a
new employee and if under 40 years of age must
as a condition of re-employment become a contributor.
15. Question—Is the approval of the Committee neces
sary in respect of all payments from the Trust
Fund ?
Answer—Yes, with exception of costs incidental to
the purchase, sale and care of securities.
16. Question—In the case of an employee having 35
years' service as of December 31, 1936, who elects
to become a contributor and at age 65 has contributed for five years, and whose average wage
during the last 120 months of service has been
$100.00 per month, (a) what pension allowance
would be paid, and (b) what proportion would be
supplied by the Trust Fund ?
Answer—(a) $40.00 per month.
(b) As may be determined by the Actuary, but probably about $1.50 a
month.
17. Question—Can any portion of the Trust Fund be
used to pay the pension of a non-contributing
employee retired on pension subsequent to January 1, 1937?
Answer—No.
18. Question—If an employee dies before reaching pen
sion age what becomes of his contributions ?
Answer—The total sum is refunded to his legal
representative.
v 27
19. Question—In the case of a non-contributor who
reaches pension age on January 1, 1940, with
40 years' service and whose average earnings
during the last 10 years prior to January 1, 1937,
were $100.00 per month, (a) what pension would
he receive, and (b) what amount would be paid
by the Company into the Trust Fund ?
Answer—(a) $29.60 per month,
(b) $ 7.40 per month.
20. Question—Do the provisions of Rule 15 apply to
all eligible employees whether or not they become
contributors ?
Answer—Yes.
21. Question—How is the term of service of a contribu
tor to be calculated ?
Answer—He will be allowed one month of service
for every calendar month in which he has worked
and 12 such months shall be the equivalent of one
year's service.
22. Question—If an employee works from January 1 to
September 30 in any year and is then granted
three months' leave of absence, how much service would be allowed for the year ?
Answer—One month's service for each calendar
month in which he worked, or nine months.
23. Question—If an eligible employee who entered the
service January 1, 1917, does not become a contributor but remains continuously in the service
until age 65, what service will be allowed in
calculating pension ?
Answer—From January 1, 1917, to December 31,
1936, or 20 years.
24. Question—What is the general effect of the change
in the method of calculating pensions as between
the old and new pension systems ? 28
Answer—Examination of a number of cases taken
at random indicated a moderate reduction in the
term of service, which, however, was offset by
the increase in the average monthly wage ascertained by taking only the last 120 months in
which service was actually rendered.
25. Question—How is the average monthly pay of a
contributor referred to in Rule 18(a) determined ?
Answer—By dividing by 120 the aggregate earnings
for the last 120 months during which the employee rendered service prior to age 65 or age of
retirement, if earlier.
26. Question—What will a contributor's pension amount
to who reaches age 65 with 40 years' service (calculated under Rule 17) to his credit at an average
salary of $150.00 per month for the last  120
months in which service was rendered ?
Answer—40% of $150.00, or $60.00 per month.
27. Question—Will the minimum of $25.00 per month
apply to all contributors without regard to the
period of time during which contributions have
been made ?
Answer—Yes, except as provided for under Rule
18 (b).
28. Question—If an employee is injured and under the
provisions of the Workmen's Compensation Act
is awarded an allowance for permanent partial
disability, will such allowance affect his pension ?
Answer—No.
29. Question—If an employee is in receipt of a war
pension will this affect his pension under this
system ?
Answer—No.
30. Question—Will a retiring employee be advised on
request as to the approximate monthly allowances
v. 29
which could be made under the alternatives
mentioned in Rule 19 ?
Answer—Yes.
31. Question—Are  the  alternate  pension  allowances
payable under Rule 19 in all cases smaller or less
than the allowances payable to the pensioner
under Rule 18 ?
Answer—Yes. They are based on the expected duration of the lives of two persons, with the result
that the expected period during which the allowance will have to be paid is longer and therefore
the monthly payments must be less.
32. Question—If an employee who retires at age 65 and
whose life pension allowance would amount to
$100.00 per month, has elected to avail himself
of the provisions of Rule 19, what is the amount
of the reduced allowance payable to him and
what amount will his surviving wife or dependent
receive after his death ?
Answer—Under the actuarial tables now in effect:
If his wife's or dependent's age at the time of
retirement is—
Surviving wife or de-
Age of wife or     Pensioner  pendent will receive
dependent receives        after his death
55 years     $74.50 $37.25
60    "            78.50 39.25
65    "            82.50 41.25
33. Question—If an employee, who has elected to avail
himself of the provisions of Rule 19, is retained in
the service after reaching age 65 and dies while
still in the service, will the survivor allowance be 30
payable to his widow or other dependent after his
death ?
Answer—Yes.
34. Question—If  a   pensioner   dies  before  the  total
monthly payments made to him equal the total
of the contributions made by him, what will be
done with the balance ?
Answer—It will be paid to his legal representative.
35. Question—If a pensioner has elected under Rule 19
and both he and his widow or other dependent,
to whom an allowance is payable under that
rule, have died before the total payments made
to him and his widow or other dependent equal
the total of his contributions, what will be done
with the balance ?
Answer—It will be paid to his legal representative.
36. Question—Will an eligible employee who has been
continuously in the service since January 1, 1912,
or some date prior thereto, receive on retirement
under the rules a minimum pension allowance
of $25.00 per month whether or not he becomes a
contributor and regardless of service actually
rendered ?
Answer—Yes.
37. Question—WThat pension allowance would be made
on retirement to an eligible employee who has
been in the service continuously since 1920,
whose average compensation has been $100.00
per month during the last 10 years prior to
January 1, 1937, but who does not become a
contributor ? 31
Answer—$17.00 per month which represents the
minimum of $12.00 per year for each year of
service prior to January 1, 1937.
38. Question—Must an eligible employee who was in
the service on December 31, 1936, become a
contributor in order to receive a pension allowance on retirement under the rules ?
Answer—No; but if he does not become a contributor he will receive only the allowance provided for in Rule 21.
Examples showing comparisons of pension allowances to non-contributors and contributors:
Years of
service
up to
Dec. 31/36
Years of
service
after
Dec. 31/36
Average
Mo. wage
10 years
prior to
Dec. 31/36
Average
Mo. wage
for last
120 Mos.
worked
Non-Contributors'
monthly
pension
allowance
Contributors'
monthly
pension
allowance
10
30
$100.00 $100.00
$10.00
$40.00
20
20
100.00
100.00
20.00
40.00
30
10
100.00
100.00
25.00
40.00
40
5
100.00
100.00
32.00
45.00
10
30
100.00
125.00
10.00
50.00
20
20
100.00
125.00
20.00
50.00
30
10
100.00
125.00
25.00
50.00
40
5
112.50
125.00
36.00
56.25
10
30
150.00
150.00
12.00
60.00
20
20
150.00
150.00
24.00
60.00
30
10
150.00
150.00
36.00
60.00
40
5
150.00
150.00
48.00
67.50
10
30
150.00
200.00
12.00
80.00
20
20
150.00
200.00
24.00
80.00
30
10
150.00
200.00
36.00
80.00
40
5
175.00
200.00
56.00
90.00
Note—The two men involved in each example have
the same length of service and the same pay. The differ-
J k
32
ence in pension allowance is due to the fact that the
non-contributor receives no benefit from his service
after December 31, 1936, and only 4/5ths of the allowance in respect of service prior to that date, whereas
the contributor has the benefit of his full service and
allowance. Furthermore, if the non-contributor receives
an increase after December 31, 1936, he obtains no
benefit from it in respect to his pension allowance,
whereas the contributor will receive the benefit of any
increase granted to him during the last 120 months of
service.
39. Question—What is meant by the commuted value
of an employee's pension allowance as mentioned
in Rule 21 (b) and how is its value calculated ?
Answer—This is a calculation of the value of a
monthly allowance expressed in terms of a lump
sum based on actuarial tables of life expectancy.
40. Question—Does the proposed system, as above out
lined, give an employee any more assurance than
the present system, that the Company will continue its contributions ?
Answer—Yes. Pension allowances could not be
continued on the same scale as under the previous
system by reason of their rapidly increasing cost,
but with the application of employees' contributions to assist in meeting future accumulating
costs it is anticipated that in the absence of circumstances beyond the control of the Company
payment of pensions on the previous basis can
be continued.
2-40 P.F.O.

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