COUGHLIN AUGUST 2 0 0 7 c o u r i e r AT A GLANCE ... Major expansion of Coughlin PPN Major expansion of Coughlin and Associates Ltd.’s Preferred Provider Network (PPN) almost tripled in size recently Coughlin PPN .................. 1, 5, 6 & 7 when it entered into an agreement with Loblaws Ltd. to expand network membership to include all 207 Drug Store Pharmacy stores throughout Ontario. Court says pension assets Drug Store Pharmacy stores are located in major grocery stores throughout the province including can fund administration costs ........2 Loblaws, Real Canadian Superstore, No Frills, Zehrs, Your Independent Grocer and Fortinos. Disabled veterans vow to fight With the addition of the entire Drug Store Pharmacy chain in Ontario, the number of participating pharmacies in the PPN now exceeds 290, making Coughlin’s PPN one of the largest preferred pension ruling ................................2 provider pharmacy networks in the province. QPP faces crisis by 2040, “Thanks to the addition of the Drug Store Pharmacy organization, Coughlin PPN members can now chief actuary says ..........................3 have their prescriptions filled almost anywhere in the province, from Windsor to Cornwall; Toronto to Thunder Bay,” says Coughlin Consultant Joe Zadzora. “We’re very pleased to work with groups like RAMQ changes affect notice periods the Drug Store Pharmacy to extend the PPN’s service range for its members.” and child coverage requirements ....3 PPN member pharmacies agree to limit dispensing fees to the Ontario Drug Benefit plan maximum (currently $7 per prescription) and cap the mark-up on certain dispensed drugs to 10 per cent of Lucky 13 .......................................4 their wholesale price. All the employee has to do is present either his/her PPN or pay direct drug card at the participating pharmacy when filling the prescription. Savings areimmediate . There is Parental definitions change again ....8 no extra paper work or commitment of any kind required. Fast facts .......................................8 Ultimately, the lower prescription costs result in lower drug claims and reduced costs for plan sponsors. PPN update ....................................8 The Coughlin PPN was established in 1995.. Drug Store Pharmacy outlets can be found in the following locations: Name Address City Phone Real Canadian Superstore 30 Kingston Rd. W. Ajax 905-683-5573 Zehrs 30 King St. S. Alliston 705-434-9398 Your Independent Grocer 401 Ottawa St. Almonte 613-256-6884 No Frills 181 Sandwich St. S. Amherstburg 519-736-6220 Fortinos 54 Wilson St. W. Ancaster 905-304-5749 No Frills 285 Mill St., RR #1 Angus 705-424-3549 Real Canadian Superstore 15900 Bayview Ave. Aurora 905-726-8334 No Frills 657 John St. N. Aylmer 519-765-2915 Zehrs 11 Bryne Dr. Barrie 705-733-2684 Zehrs 201 Cundles Rd. E. Barrie 705-739-9413 Zehrs 472 Bayfield St. Barrie 705-735-9884 Zehrs 620 Yonge St. Barrie 705-735-0687 Your Independent Grocer B30 Beaver Avenue Beaverton 705-426-5191 Your Independent Grocer 400 Dundas St. E. Belleville 613-968-4383 No Frills 286 Chatham St. N. Blenheim 519-676-2623 Zehrs 487 Queen St. S. Bolton 905-951-7502 Loblaws 2375 Hwy. #2 Bowmanville 905-623-0420 Your Independent Grocer 270 Wellington St. Bracebridge 705-646-8995 Real Canadian Superstore 85 Steeles Ave. W. Brampton 905-451-9987 Fortinos 55 Mountainash Rd. Brampton 905-793-8813 Fortinos 60 Quarry Edge Dr. Brampton 905-453-5250 No Frills 295 Queen St. E. Brampton 905-452-9011 Fortinos 35 Worthington Ave. Brampton 905-495-8123 No Frills 70 Clemantine Dr. Brampton 905-457-9312 continued on page 5 COUGHLIN COURIER A U G U S T 0 0 7 Disabled veterans vow to fight pension ruling Following the dismissal of their class action suit by the Ontario Court of Appeal, a group Court says pension assets representing more than 4,600 can fund administration costs disabled veterans, along with their dependants and descendants, is The Ontario Court of Appeal says that pension plan sponsors can take contribution holidays vowing to take their suit against and use pension assets to pay for administration costs in certain situations. However, they must the Department of Veterans Affairs ensure that plan texts and trust agreements allow it. for more than $4.6 billion to the Supreme Court of Canada. The ruling, also known as the Kerry decision, involves a 1950s-vintage defined benefit (DB) pension plan that was amended in the 1970s to allow plan expenses to be paid from the plan’s The group alleges that the federal funds. The employer began taking contribution holidays from the plan’s surplus in 1985. government failed to manage the pension assets of the veterans or In 2000, the plan was amended again as a defined contribution (DC) element was added to the accumulate interest to maximize pension. After that, the employer began to take contribution holidays from that portion of the the return for them and their plan, again using the surplus earned from the older DB plan. Plan members objected, stating families. that using plan money to pay for expenses and taking contribution holidays from both the DB and DC elements was a breach of trust. Most of the veterans were disabled or “shell-shocked” (ie. suffered from The plan’s members took their case to the Ontario Superintendent of Financial Institutions, post-traumatic stress syndrome) in who supported their position. The case was appealed to the Financial Services Tribunal, which the Second World War and Korean supported the employer. The members then took the case to the Ontario Divisional Court, War and deemed unfit to handle which overturned the Tribunal’s decision and ruled in favour of the employees. The case then their own affairs. Many were moved to the Ontario Court of Appeal. hospitalized for the rest of their lives. The government held their In its ruling, the Court of Appeal affirmed the following: pension and benefit assets in trust but failed to invest the money, the • Plan expenses could be paid from the plan’s surplus, providing it was allowed by the plan’s veterans group alleges. documentation and trust agreement. (In the Kerry case, it was.) In overturning the original • However, only expenses incurred by the sponsor in its role as plan administrator may be charged to Superior Court ruling favouring the plan. Costs incurred by a plan sponsor in its role as employer may not be covered. In its the veterans, the Court of Appeal example, the Court said that the employer’s costs in considering the conversion from a DB to said “there was no basis in fact or a DC plan could not be paid from the fund. However, the costs of implementing the change law for the class to pursue its claim” could be charged. (In the first case, the plan sponsor acted as an employer reviewing the costs and that the original award by the and benefits of changing the plan. In the second case, it acted as plan administrator tasked lower court “failed the reality test.” with introducing and establishing the newly revised plan.) The Court cited the 1990 Veterans • Employers can take pension contribution holidays and use the surplus from a DB component Affairs Act barring all claims against to support contribution holidays in a DC component. However, the plan must be “properly the government for breach of duty structured” to make the members of the DC element the beneficiaries of the DB fund. to invest prior to that year. • Notice of plan amendments, such as the conversion from a DB to a DC plan, must be made in accordance with Ontario’s pension legislation. (The Court found that the notice provided by the employer was inadequate and misleading in this case. However, since the consequences of the improper notice were not clear, it did not change its overall ruling.) According to various bulletins issued by law firms studying the case, the Kerry ruling confirms the importance of providing clear and accurate communications to plan members and beneficiaries affected by pension plan re-designs or mergers. Plan sponsors should take time to carefully review their existing plan documents and trust agreements to ensure that they accurately reflect their intentions for using their pensions’ assets. P A G E COUGHLIN COURIER A U G U S T 0 0 7 RAMQ changes affect notice periods and QPP faces crisis child coverage requirements by 2040, chief Key provisions of Quebec’s Bill 130 defining insurers’ and plan administrators’ actuary says responsibilities under the province’s prescription drug insurance plan during group plan renewals became effective this past April. The Quebec Pension Plan (QPP) will be broke by 2040, according to the Canada The amendments to Sections 45, 47 and 48 of the law include the following: Pension Plan’s (CPP) former chief actuary, Bernard Dussault. • A copy of any notice provided by a group insurer or policyholder stating that a group insurance plan will not be renewed must be forwarded to the Régie de l’assurance According to a Toronto Star report released maladie du Québec (RAMQ). this past June, current contributions and investment returns may be adequate to • Insurers and administrators cannot cancel a contract or basic drug plan coverage except fund the province’s pension plan in the when the policyholder or plan member fails to pay the required premiums. Cancellation short term. However, with the pending cannot take effect until 30 days have lapsed and notice has been sent to the last known retirement of the baby boom population address of the policyholder or member. A copy of that notice must also be sent to and reduced immigration to the province RAMQ. compared to the rest of Canada, payroll contributions will not be enough to fund • All plan members must receive 30 days notice of termination of any plan involving the plan or meet its pension obligations, basic drug coverage.