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Canadian Pacific Railway Pension Department rules and regulations Canadian Pacific Railway Company. Pension Department 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.
4^-Th§. 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.
1/7f£f
Chairman and President.
A CANADIAN PACIFIC RAILWAY COMPANY
PENSION DEPARTMENT
RULES AND  REGULATIONS
1.—For the purpose of these Rules, unless the con-  Definitions.
text 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 showTn by its staff records.
(j) "The Trust Fund" shall mean the Canadian
Pacific Railway Company Pension Trust Fund.
Committee. 2.—The pension system shall be administered by a
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 trien-
nially 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.
Meetings. 4.—Meetings of the Committee shall be held at the
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 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  Powers,
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 o£ 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.
(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.
Supt. of 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 (subject to such 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 wrhich they
may retire on pension under the provisions of these
rules; provided, however, that leave of absence, suspension, dismissal followed by reinstatement within
one year, or a temporary lay-off 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
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 of last entry
Staff
Registration.
Casual or
Intermittent
Employment. 8
Ocean
Services.
Proof of
Age.
Statutory
Pensions.
Employees of
Acquired
Companies.
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
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 arrange- ment 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  Contributors.
the 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.
(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 Contributions.
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 10
every calendar month during wrhich 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.
Currency, (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
contributions shall be converted into the new currency
at the then current rate of exchange.
Refunds. (?) When, before retirement on pension, the 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.
(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 11
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,
wTithin 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 Trust Fund,
the 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 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 12
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
allowances which the Trust Fund would otherwise
provide.
Retirement 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. 13
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  Medical
with pension who is under sixty-five years of age shall  Exammations.
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  Notice of
- t , M.     , . J   - Retirement,
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
Calculating
Contributors'
Service. 14
Calculating
Contributors'
Pension
Allowances.
Minimum.
Optional
Allowance to
Dependent.
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 allowred.
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.
19.—(a) Any contributor may elect at the time of
retirement 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 his wife should she
survive him* 15
(b) Any contributor who is unmarried or widowed
at the time of retirement may, at the discretion of the
Committee, be granted, 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 be continued to such dependent as he
may at the time of retirement name.
(c) The optional allowances referred to in this rule
shall be calculated in accordance with the methods prescribed from time to time by the Actuary.
20.—When a contributor retires on pension and dies
before the amount of pension payments (including the
proportion voluntarily contributed by the Company)
has equalled the amount of contributions made by him,
the difference shall be paid to his legal representatives.
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:
(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 wras 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
Deceased
Pensioners,
Refunds.
Calculating
Non-
Contributors'
Pension
Allowances. 16
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.
Employees' 22.—(a) Employees absent on leave and during such
tives.6Senta" absence employed as General Chairmen, Assistant
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,
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 in the service of the Company. The contributions and pension allowance of any
such employee shall be calculated on the basis of the
average compensation earned by the two employees
immediately preceding such employee and the two employees immediately following such employee on the
Company's seniority list. Should there not be two
employees preceding such employee the deficiency shall
be made up for the purpose of the average by taking
one or two additional employees immediately following
such employee. 17
(b) The monthly contributions to be made by any
such employee in each year shall be calculated on the
average monthly compensation received by the four
employees selected under the preceding paragraph during those months in the next preceding calendar year
in which service has actually been performed.
23.—The period during which employees were absent  war Service,
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 pur- Payments,
suant 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
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.
Pay-rolls.
Irresponsible
Pensioners. Garnishment.
Employment
after
Retirement.
Pensioners'
Reports.
Company's
Participation.
18
27.—No pension allowance shall be assigned in wrhole
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) The establishment and continuance of this
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
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 19
qualify for pension allowances, nothing contained in
these rules shall diminish or affect any right wrhich 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   Misconduct,
rules, the Company may cancel its voluntary proportion
of any pension wrhenever it is established, in the opinion
of the Committee, that a pensioner is guilty of serious
misconduct.
31.—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 wrhom
pension allowances may be made under the provisions
of such previous system.
32.—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.
Pension
Allowances
under
Former Rules.
Effective
Date. 20
EXPLANATORY
Questions and Answers
1. Question—When does this new pension system go
into effect ?
Answer—January 1, 1937.
2. Question—Why is it necessary to change the pen
sion 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.
3. Question—What will happen to the previous pen
sion 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.
4. 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. 21
5. 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
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.
6. 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.
7. 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 22
1937, for which contributions may not have been
made and it is therefore to his advantage to become a contributor from January 1, 1937.
8. Question—Must an employee under 40 years of age
entering the service after December 31, 1936,
become a contributor ?
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 ? 23
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
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 24
would be paid, and (b) what proportion would be
supplied by the Trust Fund ?
Answer—(a) $40.00 per month.
(b) $1.75 to $2.25 per month according to
the percentage determined by the
Actuary.
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.
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. 25
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 ?
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 ? 26
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 awrarded 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
which could  be made  under the alternatives
mentioned in Rules 19 (a) and (b) ?
Answer—Yes. 27
31. Question—Are  the  alternate  pension  allowances
payable under Rules 19 (a) and (b) 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 whose pension allowance
amounts to $100.00 per month elects on retirement at age 65 to avail himself of the provisions
of Rule 19, what amount would he receive and
what amount would his wife receive if she survives him ?
Answer—Under the actuarial tables now in effect:
If his wife's age at time of retirement is—
His wife if
Pensioner      she survives
receives        him receives
A. 55 years........      $74.50 $37.25
B. 60    "             78.50 39.25
C. 65    "             82.50 41.25
33. Question—If  a   pensioner  dies  before  the  total
monthly payments made to him equal the total
of the contributions made by him, what is done
with the balance ?
Answer—It will be paid to his legal representative. 28
34. Question—If a pensioner has elected under Rule 19
(a) or (b) 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.
35. 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 be becomes a
contributor and regardless of service actually
rendered ?
Answer—Yes.
36. Question—What 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 ?
Answer—$17.00 per month which represents the
minimum of $12.00 per year for each year of
service prior to January 1, 1937.
37. 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 ? 29
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:
Average Average Non-Con- Contrib-
Years of     Years of     Mo. wage Mo. wage tributors utors
8ervice service        10 years        for last monthly monthly
up to after prior to 120 Mos.       pension        pension
Dec. 31/36 Dec. 31/36 Dec. 31/36     worked allowance 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 difference 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 allow* -
ance in respect of service prior to that date, whereas 30
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.
38. 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.
39. 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.  \

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