1. Pension Information Committee Report
I am here to provide the Pension Information Committee Report
We had a meeting with Bell in Montreal on Oct 2th
1 day session with Bell’s Director of Pension and Actuarial Services and his staff to discuss items relating to the various Pension Plans, Benefits and Retirement. We talk about …
Governance
Special Topics (this year it was on minimizing risk)
BIMCOR (who manage the more than $20B of BCE Pension Fund)
Financial Status of our Bell Pension Plan
Very open and transparent discussion
Today I have a short presentation which will provide the highlights of that PIC meeting
Lots of numbers in the presentation … but no test at the end.
Also let me give you the two big takeaways from my comments
Bell continues to be a good corporate sponsor
The Pension Plan is in good financial shape
October 2018

2. Pension Information Committee (PIC)
The Pension Information Committee’s mandate was defined by the Pension Benefits Standards Act of It includes promoting better communications with Plan members and reviewing, for information purposes, the financial, actuarial, and administrative aspects of the Plan.
The Bell PIC was created in Functions include:
Attending an annual meeting to review the Plan
Helping to build and distribute an information report
Communicating with plan members
PIC members are elected by their peers to serve for a three-year term. Representatives for pensioners for 2018/19:
First some background … the Bell Pension Information Committee (PIC) was created in 1988 as a result of a regulatory requirement to promote better communication with Plan members.
Meet with Bell to review various issues related to the Plan
We help prepare the annual PIC Report that becomes available to all members
Communicate with members at meeting like this
Mandate also includes reviewing the financial, actuarial, and administrative aspects of the Plan … its kind of like going to a full day of math class. But they pay for lunch.
I am the rep for Ontario and Western Canada; Sue Dawes is the alternative.
I have agreed to do another term starting in January and at that time Denis Henry will be the backup
Ontario & Western Canada
Québec & Atlantic Region
Up to December 31, 2018: Peter Dilworth (substitute: Sue Dawes)
Up to December 31, 2018: Michel Doyon (substitute: Yvan Dutrisac)
January 1, 2019 to December 31, 2021: Peter Dilworth (substitute: Denis Henry)
January 1, 2019 to December 31, 2021: Jean-Luc Taschereau (substitute: Daniel McDonald)

3. Evolution of the Membership*
This slide shows the evolution of the number of members in the Bell Pension Plan broken out by Active and Retired
First active members (or employees) are the light blue bars Defined Benefit and green bars Defined Contribution.
You can see that active members on a DB plan (light blue) are slowly going away. Now they only represent about a third of active members
At the end of last year there were almost 11k active members accruing DB service, down 400 yr/yr
The Defined Contribution arrangement (green), introduced in 2005, has now grown to cover almost two thirds of active members.
The dark blue bars show the numbers of pensioners & survivors (US)
The height of that bar has been growing slightly over time, but for the first time this past year it has shrank by 217 members.
At the end of last year there were over 35K retiree and survivor members … the split is 32K retires, 3K survivors
10,482 Defined Benefit (DB) active members or employees (Light Blue), down 404 yr/yr
The Defined Contribution plan (Green) introduced in 2005, now covers almost 66% of active members.
34,828 DB retiree and survivor members (Dark Blue), down 217 yr/yr
31,741 retirees 3,087 survivors
Active Members
Retires & Survivors
* As of December 31, 2017

4. Age Distribution of Retirees/Survivors
As of December 31, 2017, the average age was 71.3 years for retirees and 77.9 years for survivors and beneficiaries.
This is the Age Distribution of Retirees and Survivors …
At the end of last year the average age was 71 years 4 months for retirees and 77 years 11 months for survivors and beneficiaries. It has been increasing slightly every year.
The biggest group is the 65 to 69 age group
This chart also gives us some inspiration … there are 18 members 100 years young or older. The oldest pensioner is 107 years young.
I have to tell you, I get more calls about this than just about everything else … there is a big competition to be the oldest pensioner

5. Actuarial Valuations of the Plan
Solvency Valuation*
($ millions)
Dec 31, 2017
Dec 31, 2016
Market Value of Assets**
15,951
15,500
Solvency Liability
16,119
16,192
Solvency Shortfall
(168)
(692)
99.0%
95.7%
Considers obligations of a pension plan, assuming it is terminated as of the date of the valuation and based on current economic and demographic parameters.
($168M) Deficit; Ratio of 99.0% at Dec 31st, 2017
Two actuarial approaches for evaluating how financially sound Pension Plans are … Solvency and Going Concern valuations … both are important
I am showing calculations for periods ending Dec 31st, 2017 and Dec 31st 2016.
These are computed by actuaries and then Bell filed them with the Office of the Superintendent of Financial Institutions
Solvency Approach – Considers if there are sufficient funds in a pension plan to pay out its obligations, assuming it is terminated at the date of the actuarial valuation and based on current economic and demographic parameters. Think of it like this, the plan is wound up; you get cash; invest in an annuity at today’s rate and actuarial assumptions; the calc indicates what portion of your pension is covered?
This method shows a plan deficit of ($186M); Ratio of 99%
An increasing discount rate and solid investment performance of the fund explains most the yr/yr improvement
Going-Concern Approach - Considers the plan’s funding status on the basis that the plan will continue to operate indefinitely
Surplus of $803.8M; Ratio of 109%
We watch these valuations very carefully. These are good numbers.
Sears was maybe 75% solvency ratio.
Valuations are sensitive to the discount rate used in the calculations which are currently influenced by the low interest rate environment
25 bp increase in the discount rate is worth $600 on the Solvency Deficit
Going Concern Valuation*
($ millions)
Dec 31, 2017
Dec 31, 2016
Actuarial Value of Assets
15,744
15,345
Actuarial Liability
14,469
14,541
Going Concern Surplus
1,275
804
108.8%
105.5%
Considers obligations of the plan assuming that it will continue to operate indefinitely.
$1,275M Surplus; Ratio of 109% at Dec 31st, 2017
* Includes impact of $164.6 of Unused Advanced Contributions
** Includes plan windup costs of $16 million

6. Historical Bell Plan Valuation Results
Solvency
Tests whether the plan has sufficient assets to pay all benefits that have been earned by members to that date
To help emphasis the progress Bell has made on these numbers, here we have historical Valuation Results for Bell back to 2012
Back a few years ago things were not so pretty. The solvency deficit was almost $3B deficits --- more than 16 times where it is now.
We have been told that George never wants to be back there again. He wants predictability and stability with the pension.
Just to put our situation into perspective, a survey from a couple of years ago of 449 DB pension plans indicated that the median solvency ratio was 81%. At 99% I am feeling okay.
Going-Concern
The purpose of a going-concern valuation is to recommend the orderly funding of a plan to accumulate assets to provide for the plan’s benefits in advance of their actual payment

7. Minimum Contributions Requirement
Funding the Pension
As of December 31, 2017 the estimated minimum funding for the DB Plan for 2018 is $233.7 million (down from the $313 million requirement for last year)
Note that Bell has $164.6 million of Unused Advanced Contributions to satisfy the Solvency Deficit Amortization Requirement
(in $ millions)
Minimum Contributions Requirement
Normal Costs
Solvency Deficit Amortization1
101.5
132.2
TOTAL
233.7
Given the financial situation we just went through, this chart shows how much money needs to be put into the Bell Plan for 2018
For the current year (2018) Bell estimates minimum funding of $234M --- about $80M less than last year.
$102M of current service costs – mostly associated with active members accruing more service
$132M of solvency amortization requirements
The way the regulations work is that you take the average of the last 3 years of the solvency deficiencies (bit less than $700M) and you need to contribute 1/5th that amount.
The good news is that as of December 31, 2017, Bell has $165M of unused advanced contributions that are available to satisfy the solvency deficit amortization requirements of $132 million … again they are in good shape

8. Disbursements $953 million of disbursements paid out in 2017
pension benefits of $805 million
lump-sum payments of $114 millions*
allowable expenses of $34 million**
The average pension payout is slightly more than $1,900 per month
This chart shows disbursements for for 2016 and 2017
You can see that Bell paid out a total of $953M last year
Most of it or $805M was in the form of monthly pension benefits (thanks you very much George Cope)
The average pension payout is just over $1,900 per month
We continue to see relatively high allowable expenses at $34M (up from an average of about $25M a few years ago) and this is mostly due to the management of the longevity swap agreement with Sun Life
* Includes DB benefits paid upon death, termination of employment, divorce or separation, and DC lump-sum withdrawals
** Includes fees for investment management, trustees, auditing, and longevity swap management

9. Cost-of-Living Adjustments
The Plan partially compensates for cost-of-living increases. The formula takes into account the retiree’s age and the increase in the Consumer Price Index (CPI) over 12-months running from Nov 1st to Oct 31st of the next year
Under 65 - CPI (rounded to nearest whole number), up to a maximum of 2%
Age The greater of:
100% of CPI (rounded to nearest whole number), up to a maximum of 2%; or
60% of the increase in the CPI), up to a maximum of 4%
Over the 12-month period ending Oct 2017, the CPI increased by 1.39%. Therefore, the 2018 adjustment applicable to all Bell retirees was 1%.
We are fortunate that our plan partially compensates for cost-of-living increases
The formula takes into account the retiree’s age and the increase in Statistic Canada’s Consumer Price Index (CPI) over 12-months running from Nov 1st to Oct 31st of the following year
The change in CPI is then rounded to the nearest whole number up to 2%
Bell uses 2 decimal places from the CPI index to do this calculation. This is what the contract implies.
Last year the percent increase in CPI was 1.39% … that rounds to a whole number of 1%.
Over the last 10 years our cost of living adjustment has represented approx. 80% of inflation … our COLA is close

10. Recent Plan Performance
BIMCOR
At our PIC meeting we also spend time with the folks from BIMCOR
No matter how politely I ask, they NEVER give me any hints on where to invest my money.
This chart shows Bell Canada’s Pension Fund Rate of Return Performance. You can also see generally where the money is invested. 63% in bonds; 22% public equities, ect
YTD 2.5%; 4 year annualized is 5.7% --- better than what I have been able to do myself

11. Plan Asset Allocation Strategy
Bell has gradually reduced the equity weight in the BCE Master Trust Fund in favour of fixed income securities. Asset allocation for the BCE Master Trust Fund is currently 70% fixed income (low risk) and 30% equities (return generating assets)
Assets are also invested to match the timing of when funds are required and the characteristics of liabilities in terms of interest-rate sensitivity
Very high correlation between the changes in the liability discount rate with how bonds perform
BIMCOR manages the BCE Pension Fund with a strategy approved by the Board of Directors of BCE.
The BCE Pension Fund is the largest corporate pension fund in all Canada. In total it is close to $25 billion.
Current strategy is to manage the Master Trust Fund with a conservative asset mix with a view to minimizing funding volatility
Bell has gradually reduced the equity weight in the Master Trust Fund in favour of more fixed income securities
Now that the Solvency ratio is 99% they want a low risk portfolio
Our fund is currently one of the most conservative in the country
BIMCOR also match the characteristics of asset investments to timing of when funds are required. EG, if you know you need to pay out $900M next year, make sure you have $900M coming due next year.
They also try to match the investments to the liabilities in terms of interest-rate sensitivity. The liabilities tend to move like bonds … very high correlation. So they work hard to make sure they out perform the bonds rate of return.
BCE Master Trust Fund is one of most conservative plans in Canada

12. The audit process helps protect our pension funds from fraud
Retirees Audit
2018 audit of 6,500 retirees and survivors
3 mailings done in April (initial), in June (reminder) and in August (final)
88% completed as of Sept 30th
8% not correctly completed (e.g., forms received with missing information)
4% not received --- High possibility of temporary suspension of payments starting in November
Still 51 outstanding cases from last year
Audit Year
2017
2018
Population
~ 8,000
~ 6,500
Temporary suspended pension
(from November)
330 …
Outstanding cases 51
As of 2018/09/30
The last item to talk about the Pensioners Audit. As part of the Sunlife agreement Bell needs to do a survey to basically make sure we are still alive.
In 2017 Bell audited 8,000 retirees … the result was 330 suspensions
This year Bell is auditing 6,500 retirees and survivors
3 mailings
Appropriately completed by 88%
8% not correctly completed
4% not received yet
Researching for invalid addresses
Possibility of temporary suspension of payments starting in November
If they have sent you a survey, please fill it out and send it back.
The audit process helps protect our pension funds from fraud

13. Final Remarks
Bell continues to be a solid sponsor of our DB Pension Plans
The financial health of the plans have improved significantly in recent years
The Bell Plan Solvency Ratio is now over 99%
The 2018 Pension Information Committee Report providing detailed pension fund status as of Dec 31, 2017 will be available on both the InTouch and Benefits Websites in November and can be mailed to pensioners, if requested.
Bell continues to demonstrate that they are a solid sponsor of our DB plan.
The financial health of the plan is in good shape.
The full PIC Report will be available in November … new graphics this year, it’s a 31 page document.

14. Questions