As Amended and Restated Effective May 1, 2000

Article 1 - Establishment Of The Plan
Article 2 - Definitions
Article 3 - Eligibility And Membership
Article 4 - Contributions
Article 5 - Retirement Dates
Article 6 - Amount Of Pension
Article 7 - Post-Retirement Cost Of Living Adjustments
Article 8 - Normal And Optional Forms Of Pension
Article 9 - Disability Benefits
Article 10 - Death Benefits
Article 11 - Termination Of Employment
Article 12 - Transfer Of Monies To And From Pension Fund
Article 13 - Payment Of Benefits
Article 14 - Pension Fund
Article 15 - Administration
Article 16 - General Conditions Of Membership
Article 17 - Termination Of The Plan
Article 18 - Applicable Law
Article 19 - Optional Ancillary Contributions And Optional Ancillary Benefits

Article 1 - Establishment Of The Plan

1.01 The University of Waterloo Pension Plan for Faculty and Staff was established July 1, 1960 to provide retirement benefits for all eligible Employees of the University.

1.02 The Plan was revised effective January 1, 1969. Effective July 1, 1977, the Plan was revised and restated.

1.03 The Plan was further revised and restated effective January 1, 1987, to incorporate amendments to that date and changes required under the Pension Benefits Act, 1987 (Ontario).

1.04 The Plan was further yet amended and restated effective January 1, 1992 to incorporate changes required as a result of amendments to the Income Tax Act (Canada).

1.05 The Plan is herein again amended and restated effective May 1, 2000 to incorporate, through consolidation, all amendments to the Plan since the previous restatement effective January 1992, and to include:

(a) a change to the early retirement pension in Section 6.02 effective May 1, 2000 and applicable to Members who retire early on or after October 1, 1999, and
(b) a temporary change to the Employee contribution rate in effect for the period May 1, 2000 to April 30, 2001.

1.06 Unless stated otherwise, the terms of the Plan as restated shall apply to Members who retire, terminate employment or die on or after May 1, 2000 and the benefits of Members who retired, terminated employment, died, or were transferred to another category of employment not covered by the Plan prior to this date shall be determined by the terms of the Plan in effect at the time of that event.

Article 2 - Definitions

The following words and phrases when used in this text shall have the following meanings unless a different meaning is clearly required by the context.

2.01 "Actuarial Equivalent" means an actuarially equal value computed by reference to the rate of interest and actuarial tables in effect at the time, adopted by the Pension Committee for purposes of the Plan on the recommendation of the Actuary, subject to any requirements of the Pension Benefits Act and the Income Tax Act.

2.02 "Actuary" means an independent qualified actuary who is a Fellow of the Canadian Institute of Actuaries and who is appointed by the Pension Committee.

(See Amendment for 2.02 (a))

2.03 "Beneficiary" means the person, persons, organization or organizations designated by the Member pursuant to Section 10.05 to receive a payment or payments, if any, under the provisions of the Plan.

2.04 "Commuted Value" means a lump sum amount which is the actuarial present value of a Member's benefits computed at the rate or rates of interest and using the actuarial tables adopted by the Pension Committee on the recommendation of the Actuary, subject to the provisions of the Pension Benefits Act and the Income Tax Act.

2.05 "Consumer Price Index" means the arithmetic average of the monthly Consumer Price Indices for the twelve (12) months ended December 31 for a specified calendar year, as calculated by Statistics Canada for Canada as a whole and, should such index be replaced by another, the index substituted would be the most recent Consumer Price Index series published, arithmetically adjusted to the same basis.

2.06 (See Amendment) "Continuous Employment" means employment with the University on a regular basis without interruption except for periods of vacation, authorized sick leave, periods of approved disability, or periods of leave of absence with or without pay duly authorized by the University, periods of lay-off, and periods of absence due to injury in respect of which the Member is entitled to Workers' Compensation benefits that are included in Credited Service under Section 2.09. Continuous Employment includes employment on a reduced work load.

2.07 "Contract Year" means the 12-month period commencing with the first of the month of original appointment to the University.

2.08 "Credited Interest" means interest on a Member's contributions made to this Plan, compounded annually from the first day of the month following the month in which the contribution was made to the first day of the month in which a determination thereof is to be made at a rate equal to the four year moving arithmetical average of the rate of return of the market value of the Pension Fund. Notwithstanding the foregoing, a Member's required contributions made to this Plan are subject always to the minimum rates prescribed pursuant to the Pension Benefits Act.

2.09 "Credited Service" means the number of full years and completed months of Continuous Employment:

(a) prior to July 1, 1960 while a participant under the Dominion of Canada Government Annuity Plan; and

(b) on and after July 1, 1960 during which the Member made regular contributions to the Plan, but does not include any period of Continuous

Employment in respect of which the Member withdrew or suspended his or her regular contributions to the Plan.

Credited Service shall also include:

(c) any period of absence due to injury in respect of which the Member is entitled to receive benefits under the Workplace Safety and Insurance Act and within the 12-month period following the date of the injury, provided that if the Employee is not approved for long term disability benefits the Employee continues to make required contributions from the date that long term disability benefits would have been payable if the claim had been approved;

(d) any period of absence required by law to be granted in respect of maternity or parental leave provided that the Employee continues to make required contributions during the absence;

(e) any period of absence without pay during which the Employee makes regular contributions to the Plan;

(f) subject to any restrictions prescribed under the Income Tax Act with respect to periods of reduced pay, a Member who transfers to a reduced work load within 10 years of his or her Normal Retirement Date and after completion of at least 10 years of Continuous Employment will continue to accrue Credited Service at the rate of one year for each year on reduced work load, whether:

(i) he or she works throughout the year at reduced work load; or

(ii) he or she works at full load for a portion of the year equal to his or her reduced work load required for the full year and does not work during the balance of the year;

(g) a Member on reduced work load other than as described in (f) above, or a Member employed on a part-time basis shall be credited with a reduced amount of Credited Service equal to the proportion his or her reduced work load bears to a regular full-time work load; and

(h) years of Credited Service purchased pursuant to Article 12.

Notwithstanding the foregoing:

(i) in respect of periods of absence before January 1, 1992, other than for periods when a Member is Totally Disabled, the period of Credited Service granted in respect of any approved period of unpaid leave of absence is limited to a maximum full-time equivalent of two years; and

(j) in respect of periods of absence and reduced workloads after December 31, 1991, other than for periods when a Member is Totally Disabled, the aggregate Credited Service granted in respect of approved unpaid leaves of absence is limited to a maximum full-time equivalent of eight years provided that not more than five of those eight years are credited in respect of absences that are not within the 12-month period following the birth or adoption of a child of the Member.

2.10 "Early Retirement Date" means a Member's Early Retirement Date as set out in Article 5.

2.11 "Earnings" means:

(a) for Staff Employees, the normal earnings paid according to basic monthly salary or basic weekly salary as indicated in the official payroll records of the University for a normal work month or a normal work week for the particular job classification, but excluding overtime pay, reimbursement for expenses, special payments for special services, shift premiums, week end provisions, special allowances and other like payments; and

(b) for Faculty Employees, the normal earnings paid according to basic monthly salary as indicated in the official payroll records of the University, but excluding reimbursement for expenses, administrative stipends, faculty research fellowships, seasonal stipends, summer teaching stipends, special payments for special services, consulting fees, special allowances and other like payments.

Earnings of an Employee employed on a part-time basis or while on reduced work load are deemed to be the Earnings that the Employee would have been paid if he or she had worked full-time. Earnings of an Employee while on paid disability leave of absence are deemed to be the Employee's Earnings immediately prior to commencement of the disability leave of absence, adjusted annually by an amount to be determined by the Pension Committee, taking into account other factors including the cost of living adjustment awarded to pensioners and the salary increases awarded to active faculty and staff, subject always to the limitations in the Income Tax Act.

Earnings of an Employee during a leave of absence without pay that is included in Credited Service are deemed to be the Employee’s Earnings immediately prior to the commencement of the leave.
2.12 "Employee" means a regular full time or part-time employee of the University or of one of the organizations associated with the University as designated from time to time by the University on full work load, or on authorized reduced work load as determined by the University under its normal practices, and includes Faculty Employees and Staff Employees:

(a) "Faculty Employee" means an Employee employed in the teaching faculty of the University and any other Employee who is designated by the University as a Faculty Employee for purposes of the Plan, but does not include an employee appointed to the teaching faculty on a special temporary basis, as defined by the University, or with a fixed terminal date of one year or less following the appointment date.

(b) "Staff Employee" means an Employee other than a Faculty Employee (as defined in UW Policy 54).

2.13 "Excess Contributions" means the amount, if any, by which a Member's accumulated regular contributions to the Plan, plus Credited Interest thereon, exceeds 50% of the Commuted Value of the Member's accrued benefit to date of determination.

2.14 "Final Average Earnings" means, the average of the Employee's Earnings during the 36 consecutive months of highest Earnings during 120 months of his or her Continuous Employment immediately preceding the earliest of the Employee's date of termination of employment, disability, retirement or death.

For a Member who is laid-off or on leave of absence, and provided he or she returns to the University after the period of absence, the Member's Final Average Earnings will be based on the highest Earnings over a 36 consecutive month period during the 120-month period prior to the date of determination of such Final Average Earnings. For this purpose, Earnings shall be calculated as the Earnings the Member would receive had he or she been employed by the University during the period of absence. The 36 consecutive month period may include the period of absence.

In the event a Member has less than 36 months of Continuous Employment at the date of determination of his or her Final Average Earnings, then Final Average Earnings means the average of the Member's Earnings during the total period of the Member's Continuous Employment.

2.15 "Funding Excess" means the excess (if any) of the actuarial value of assets over the actuarial liability as indicated in the actuarial report most recently filed with the Financial Services Commission of Ontario.

2.16 "Income Tax Act" means the Income Tax Act, Statutes of Canada, and the Regulations thereunder, and where applicable includes the provisions of Information Circular 72-13R8 issued by the Department of National Revenue, as amended or replaced from time to time.

2.17 "Member" means an eligible Employee or former Employee who has completed and filed with the University the necessary enrollment forms and who continues to be eligible for benefits under the Plan.

2.18 "Normal Retirement Date" means a Member's Normal Retirement Date as set out in Article 5.

2.19 "Pension Benefits Act" means the Pensions Benefits Act, R.S.O. 1990, c.P.8, and the Regulations thereunder, as amended or replaced from time to time.

2.20 "Pension Committee" means the Pension and Benefits Committee provided for in Article 15.

2.21 "Pension Fund" means the fund established pursuant to Article 14 hereof in order to provide for the payment of the benefits described in the Plan.

2.22 "Plan" means the University of Waterloo Pension Plan for Faculty and Staff, established July 1, 1960 and most recently amended and restated as at May 1, 2000.

2.23 "Postponed Retirement Date" means a Member's Postponed Retirement Date as set out in Article 5.

2.24 "Post-Retirement Cost Of Living Factor" means the Post-Retirement Cost of Living Factor as set out in Article 7.

2.25 "Spouse" means at the time a determination of marital status is required, a person to whom the Member is:

(a) legally married, provided the Member is not living separate and apart from that person;

(b) not legally married but the Member and that person are cohabitating continuously in a conjugal relationship for at least one year; or

(c) not legally married but the Member and that person are cohabitating in a conjugal relationship of some permanence and are jointly the natural or adoptive parents of a child, both as defined in the Family Law Act, 1986 (Ontario).

2.26 "Totally Disabled" means a Member who is certified to be totally disabled by a medical doctor who is licensed to practise in Canada or where the Member resides, and either:

(a) in receipt of disability income under the long term disability insurance plan of the University; or

(b) not able to return to work because of health reasons, his or her period of paid sick leave has expired, and he or she is in the qualifying period for the long term disability insurance plan of the University.

Members not eligible for the long term disability insurance plan must be independently judged as totally disabled by a medical doctor who is licensed to practice in Canada or where the Member resides, satisfactory to the University.

2.27 "Trustee" means an insurance company authorized to carry on a life insurance business in Canada or a trust company and includes any combination or successors thereof appointed by the University to hold, administer and invest the assets of the Pension Fund.

2.28 "Trust Agreement" means any agreement or agreements now or hereafter executed between the University and the Trustee for purposes of this Plan.

2.29 "University" means the University of Waterloo, a university chartered under the laws of the Province of Ontario and, where the context so requires means the governing body of the University and its Board of Governors in their collective capacity.

2.30 "Year's Maximum Pensionable Earnings" means the "Year's Maximum Pensionable Earnings" from time to time in effect under the Canada Pension Plan.

Article 3 - Eligibility And Membership

3.01 Employees Who Were Members On April 30, 2000

Each Employee on May 1, 2000 who was a Member of the Plan on April 30, 2000 shall automatically continue as a Member of the Plan.

3.02 Other Employees

Such other Faculty and Staff Employees (with at least one third annual commitment) in the service of the University on or after May 1, 2000 shall be eligible to join the Plan on the first day of any month coincident with or next following their dates of employment. Faculty and Staff Employees are required to join the Plan on the first day of the calendar year coincident with or next following their attainment of age 35 or their appointment (if already 35).

Notwithstanding the above, a Faculty Employee who is employed as a lecturer shall be eligible to join the Plan on the same basis as in the preceding paragraph but shall sign a waiver form if an election is made not to join the Plan. However, as a condition of employment, a lecturer who has attained age 35 is required to join the Plan on the first day of the month coincident with or next following the earlier of promotion to a higher rank of employment with the University or completion of five (5) years of Continuous Employment.

An Employee with less than one third annual commitment who has either (a) earned at least 35% of the Year's Maximum Pensionable Earnings under the Canada Pension Plan or (b) worked at least 700 hours, in each of the two immediately preceding calendar years, shall be eligible to join the Plan on the first day of any month coincident with or next following the date on which such conditions are satisfied.

It is further provided that the Pension Committee may from time to time temporarily or permanently exempt certain categories of Employees from participation in the Plan.

Article 4 - Contributions

4.01 Regular Employee Contributions (see Amendment) (see Amendment)

(a) Subject to Sections 4.01(b) and (c), each Member is required to contribute to the Plan by payroll deduction an amount equal to 4.55% of that portion of his or her Earnings which does not exceed the Year’s Maximum Pensionable Earnings for that year plus 6.5% of that portion of his or her Earnings which exceeds the Year’s Maximum Pensionable Earnings, provided, however, that a Member shall not be required to contribute for any period while he or she is Totally Disabled.

(b) A Member who has accepted a reduced work load and who is more than 10 years before Normal Retirement Date or before completion of 10 years of Continuous Employment, or a Member who is employed on a part-time basis shall contribute an amount equal to 4.55% of that portion of his or her reduced base salary which does not exceed the Year’s Maximum Pensionable Earnings and 6.5% of that portion of his or her reduced base salary which exceeds the Year’s Maximum Pensionable Earnings.

(c) A Member's contributions for any year under paragraphs 4.01(a) and (b) shall not exceed the maximum amount permitted under the Income Tax Act for that year.

(d) Notwithstanding the foregoing in this Section 4.01, for the period commencing May 1, 2000, and ending April 30, 2001, the references in paragraphs 4.01(a) and (b) to "4.55%" and "6.5%" shall be read as "1.1375%" and "1.625%", respectively.

(See Amendment for 4.01 (e))

(See Amendment for 4.01 (f))

(See Amendment for 4.01(g))

4.02 University Contributions (see Amendment)

The University shall each year make contributions to the Pension Fund which, together with the Members' regular contributions as required, shall be adequate to finance the benefits provided for in the Plan on a sound actuarial basis and which shall be in accordance with such standards of solvency as are prescribed under the Pension Benefits Act. Subject to the Income Tax Act, the minimum amount to be contributed by the University shall be an amount which is the lesser of:

(a) the normal cost as determined in the last triennial actuarial valuation filed under the Pension Benefits Act. Subject to the Pension Benefits Act and the Income Tax Act, such normal cost will not be less than 100% of the Employees' regular contributions in aggregate for that year, and

(b) a percentage of the Employees' regular contributions for that year, based on the recommendation by the Pension Committee, which percentage is at least 100% and less than the percentage that the normal cost is to the aggregate of the Employees' regular contributions. This lower University contribution may only be made if the Funding Excess is deemed to be sufficient by the Pension Committee to provide the difference between the normal cost and the amount contributed by the University.

The University's contributions in respect of the normal cost shall be remitted to the Trustee by regular monthly instalments within 30 days following the month for which the contributions are payable. The University's contributions in respect of special payments to amortize an unfunded actuarial liability or a solvency deficiency shall be payable in equal monthly installments throughout the year.

Notwithstanding the above, no contribution shall be made to the Pension Fund by the University other than an eligible contribution, within the meaning of the Income Tax Act.

4.03 Additional Voluntary Contributions

Prior to January 1, 1999, each member was permitted to elect to make additional voluntary contributions to an individual account maintained on behalf of the Member under the Plan, in an amount and manner as may have been approved by the Pension Committee. Credited Interest on such contributions was allocated at least annually to the Member's individual account. A Member's additional voluntary contributions to the Plan in any given year could not exceed the maximum amount permitted under the Income Tax Act for that year.

Effective January 1, 1999, Members are no longer permitted to make additional voluntary contributions to the Plan.

4.04 Remittance Of Member Contributions

The University shall remit to the Trustee, for deposit to the Pension Fund, all sums received by the University from a Member or deducted from a Member's pay, within 30 days following the month in which such sums are received or deducted.

4.05 General Provisions

(a) No required or voluntary contributions may be withdrawn by a Member while he or she is in Continuous Employment with the University.

(b) Subject to Section 6.03(b), Members shall continue to make required contributions to the Plan until the date of actual retirement, death or termination.

4.06 Contributions By A Member For Past Service Upon Returning From Political Leave of Absence

(a) Subject to Subsections 4.06(b) and (c) below, a Member, who has taken an authorized unpaid leave of absence for the purpose of a political leave as defined in Appendix A: UW Guidelines Re “Political Leaves” (hereinafter in this Section 4.06 referred to as a “Political Leave”) and who returns to service with the University, has the option to contribute an amount equal to the regular Employee contributions, plus Credited Interest, that would have been made if the Member had not taken the Political Leave, in order to increase the Member’s Credited Service under the Plan by the length of time the Member was on the Political Leave. Such regular Employee contributions shall be based upon the Member’s Earnings immediately prior to the Political Leave, plus any scale or range adjustments that may have been granted to the Employee during the leave. An election made pursuant to this Section 4.06 shall be subject to certification of any past service pension adjustment required under the Income Tax Act.

Upon payment by the Member of the required amount, and upon certification of any past service pension adjustment as defined in the Income Tax Act, the Member’s Credited Service shall be increased accordingly.

(b) The option described in Section 4.06(a) shall be permitted only if the Member, as a condition of the Member’s political office, was required to participate in another pension arrangement during the Member’s Political
Leave and thereby the Member’s participation in the Plan was suspended effective the date of commencement of the Political Leave.

(c) Where a Member returns to service with the University in accordance with Section 4.06(a) and is entitled to a deferred vested benefit in another pension arrangement as referred to in Section 4.06(b), such Member shall not be permitted the option provided for in Section 4.06(a).

Article 5 - Retirement Dates

5.01 Normal Retirement Date

The Normal Retirement Date of a Member is the first day of the month coincident with or next following his or her attainment of age 65.

5.02 Early Retirement

(a) A Member who is within 10 years of his or her Normal Retirement Date may elect to retire early and receive an immediate pension as described in Section 6.02(a).

(b) (See Amendment) A Member who is within 10 years of his or her Normal Retirement Date may be retired early if the Member consents and receive an immediate pension as described in Section 6.02(b), as the circumstances warrant. The University will compensate the Plan accordingly.

5.03 Postponed Retirement (See Amendment)

(a) A Member who is a Faculty Employee may postpone his or her retirement until the first day of the month coinciding with or next following the end of the Contract Year with the University during which the Employee attains age 65.

(b) A Member who is a Faculty Employee employed by the University prior to January 1, 1969 and who has been continuously employed since that time may elect to postpone his or her retirement for a period of up to three years following the first of the month coinciding with or next following the end of the Contract Year during which he or she attains age 65.

(c) A Member who is a non-union Staff Employee employed by the University prior to January 1, 1969 and who has been continuously employed since that time may elect to postpone his or her retirement for a period of up to three years following the first of the month coinciding with or next following his or her Normal Retirement Date.

(d) If a Member remains in Continuous Employment at the request of the University beyond his or her Normal Retirement Date, he or she shall continue to be a Member of the Plan on a year to year basis, but shall be deemed to retire not later than the end of the calendar year in which the Member attains age 69.

Article 6 - Amount Of Pension

6.01 Normal Retirement

On his or her Normal Retirement Date, a Member shall be entitled to an annual pension equal to 1.4% of his or her Final Average Earnings not in excess of the average of the Year’s Maximum Pensionable Earnings for the year of retirement and the four immediately preceding years, plus 2.0% of his or her Final Average Earnings in excess of the average of the Year’s Maximum Pensionable Earnings for the year of retirement and the four immediately preceding years multiplied by his or her years of Credited Service.

6.02 Early Retirement

(a) A Member who retires early on or after October 1, 1999, in accordance with paragraph 5.02(a), shall be entitled, effective May 1, 2000, to the annual pension described in Section 6.01 above based on Credited Service, Final Average Earnings and average Year's Maximum Pensionable Earnings at actual retirement date, reduced by one half of 1% for each month by which the Member’s Early Retirement Date precedes the date that the Member would have attained age 62.

However, the reduced early retirement pension shall not be less than the Actuarial Equivalent of the pension described in the above paragraph before application of the reduction factors, provided that such Actuarial Equivalent pension does not exceed the pension described in Section 6.01 above based on Credited Service, Final Average Earnings and average Year's Maximum Pensionable Earnings at actual retirement date, reduced at least by 1/4 of 1% per month for each month by which the Member's pension commencement date precedes the earliest of the day on which:

(i) the Member will attain age 60;
(ii) the Member's age plus Continuous Employment (excluding periods of lay-off) would have equalled 80; and
(iii) the Member would have completed 30 years of Continuous Employment (excluding periods of lay-off).

For sake of greater clarity, a Member who retires early in accordance with paragraph 5.02(a) and who is at least 62 years of age but less than 65 years of age, shall be entitled to the annual pension described in Section 6.01 above based on Credited Service, Final Average Earnings and average Year's Maximum Pensionable Earnings as at his or her Early Retirement Date, with no reduction.

(b) A Member who is retired in accordance with Section 5.02(b) may have the early retirement reduction described in Section 6.02(a) waived at the discretion of the University provided that such immediate pension is reduced at least by 1/4 of 1% per month for each month by which the Member's pension commencement date precedes the earliest of the day on which:

(i) the Member will attain age 60;
(ii) the Member's age plus Continuous Employment (excluding periods of lay-off) would have equalled 80; and
(iii) the Member would have completed 30 years of Continuous Employment (excluding periods of lay-off).

In the event that the early retirement reduction described in Section 6.02(a) is waived at the discretion of the University pursuant to this Section 6.02(b), the University will compensate the Plan accordingly.

6.03 Postponed Retirement (see Amendment)

A Member who elects to postpone his or her retirement in accordance with Section 5.03(a), (b) or (c), as applicable, or who remains in Continuous Employment at the request of the University beyond his or her Normal Retirement Date pursuant to Section 5.03(d) shall be entitled, on his Normal Retirement Date, to choose one of the following options:

(a) to continue making required contributions to the Plan pursuant to Section 4.01(a) or (b), as applicable, until his or her Postponed Retirement Date, and commence receiving on his or her Postponed Retirement Date, an annual pension payable in equal monthly instalments determined in accordance with Section 6.01 based on the Member's Credited Service, Final Average Earnings and average Year's Maximum Pensionable Earnings at his or her Postponed Retirement Date; or

(b) to discontinue making required contributions to the Plan pursuant to Section 4.01(a) or (b), as applicable, as of his or her Normal Retirement Date, and commence receiving on his or her Postponed Retirement Date, an annual pension payable in equal monthly instalments which is the Actuarial Equivalent of the pension to which he or she would have been entitled if he or she had commenced receiving his or her pension on his or her Normal Retirement Date.

6.04 Dominion Of Canada Government Annuity Plan Offset

The pension payable to a Member under Sections 6.01, 6.02 and 6.03 will be reduced by the Member's annual pension earned under the Dominion of Canada Government Annuity Plan in effect prior to July 1960. The reduction will be equal to the amount of Government Annuity assuming payment of such annuity commenced as of the actual retirement date.

6.05 Pension From Additional Voluntary Contributions (See Amendment)

A Member who has made additional voluntary contributions to this or any predecessor plan shall be entitled to receive, at the Member's option, a lump sum refund of the accumulated contributions with Credited Interest or the pension which can be provided at actual retirement date by the accumulated contributions with Credited Interest. Such additional pension shall be paid under an arrangement acceptable to the Minister of National Revenue and shall be subject to adjustment by the Post Retirement Cost of Living Factor.

A Member who has made voluntary or past service contributions to the Plan and is within 10 years of his or her Normal Retirement Date shall have the right to purchase from an insurance company, designated by the Pension Committee, an annuity commencing no later than his or her retirement or termination date. Such right may be exercised twice in any calendar year. The Pension Committee will determine the minimum amounts required as a single premium for purchasing the annuity.

6.06 Maximum Member Cost

On retirement or termination of employment a Member's regular contributions with Credited Interest shall not provide for more than 50% of the Commuted Value of the benefits earned determined in accordance with the provisions of the Pension Benefits Act.

Any Excess Contributions arising from the application of this section shall at the option of the Member:

(a) be paid to the Member in a lump sum cash settlement, or

(b) be used to purchase an additional amount of immediate or deferred life annuity from an insurer designated by the Member, or

(c) be transferred to another registered pension plan or tax exempt trust or plan designated by the Member, or

(d) remain in the Plan as an additional voluntary contribution (this option is available only on termination if the Member opts for a deferred pension), or

(e) be used to purchase additional indexed pension from the Plan (this option is available only on retirement if the Member opts for an immediate pension paid from the Plan).

6.07 Maximum Pension (see Amendment)

Notwithstanding any other provision of this Plan to the contrary:

(a) Maximum Pension At Pension Commencement Date (see Amendment)

The annual lifetime pension payable to a Member in the form of pension selected by the Member under this Plan, including a pension payable under any other registered pension plan sponsored by the University and any pension payable to a Member's Spouse or former Spouse pursuant to Section 16.04, determined at the time of pension commencement, shall not exceed the years of the Member's Credited Service multiplied by the lesser of:

(i) $1,722.22 or such greater amount permitted under the Income Tax Act, but not exceeding $2,200.00; and

(ii) 2% of the Member's highest average indexed compensation (as defined under the Income Tax Act) in any three non over-lapping periods of 12 consecutive months;

reduced, if the pension commencement date precedes the earliest of the day on which:

(iii) the Member will attain age 60;

(iv) the Member's age plus Continuous Employment (excluding periods of lay-off) would have equalled 80;

(v) the Member would have completed 30 years of Continuous Employment (excluding periods of lay-off); and

(vi) the Member becomes totally and permanently disabled, as defined under the Income Tax Act;

by 1/4 of 1% for each month by which the pension commencement date precedes that day.

In no event will the value of the pension payable to a Member exceed the value of a pension of $1,722.22 or such greater amount permitted under the Income Tax Act but not exceeding $2,200.00, payable in the form of:

(vii) in the case of a Member who has a Spouse at pension commencement date, a joint and survivor 66 2/3% pension with a five year guarantee; and

(viii) in the case of a Member who does not have a Spouse at pension commencement date, a single life pension with a 15 year guarantee.

This paragraph 6.07(a) does not apply to additional benefits payable as a result of any Actuarial Equivalent adjustment in respect of postponed retirement, nor to that portion, if any, of the pension derived from a Member's Excess Contributions or additional voluntary contributions.

Notwithstanding the foregoing, in no event will the annual lifetime pension payable to a Member in any form of pension provided under the Plan exceed the maximum set out above herein Section 6.07(a).

(b) Maximum Pension After Pension Commencement Date

The annual lifetime pension payable to a Member under this Plan, including a pension payable to a Member's Spouse or former Spouse pursuant to Section 16.04, for each calendar year after the year in which the pension commences, shall not exceed the maximum pension determined according to paragraph 6.07(a) multiplied by the percentage increase in the annual Consumer Price Index from the date on which the Member's pension commences.

If the pension payable in respect of a Member has been in payment for less than 12 months, the increase calculated pursuant to this paragraph 6.07(b) shall be pro-rated over the number of months for which pension payments have been made.

6.08 Pension Adjustment

In no event shall the benefit accrued in a calendar year under Section 6.01 result in a pension adjustment (as defined under the Income Tax Act) in excess of the limits prescribed by the Income Tax Act for any Member.

Article 7 - Post-Retirement Cost Of Living Adjustments

7.01 Post Retirement Cost Of Living Factor

For the purposes of this Article, the Post Retirement Cost of Living Factor shall mean the factor obtained by dividing the Consumer Price Index for the preceding calendar year by the Consumer Price Index for the next preceding calendar year. In any year in which the Post-Retirement Cost of Living Factor is less than or equal to 1.05 it shall be applied in accordance with Section 7.02 and in any year in which the Post-Retirement Cost of Living Factor is in excess of 1.05, the Post-Retirement Cost of Living Factor may be reduced as described in the following paragraph, but not to a factor that is less than 1.05.

If in any one year, the Post-Retirement Cost of Living Factor is in excess of 1.05, it may be reduced to the extent deemed necessary by the Pension Committee on the advice by the Actuary.

If the post retirement cost of living increase given in a year has been less than the Post Retirement Cost of Living Factor as measured by the Plan, a catch up will be given, on a cumulative and compounded basis, in the following year or as soon as Plan resources permit. There will be no retroactivity in any catch up increase.

7.02 Application Of The Post Retirement Cost Of Living Factor To Pensions In Payment

Subject to Section 6.07, the pension of each Member, Spouse or Beneficiary receiving pension payments shall be adjusted on July 1st of each year, on the condition that the Member has received at least one regular monthly pension payment prior to July 1st, by multiplying the then current amount of such pension by the Post-Retirement Cost of Living Factor for such year.

If, on July 1st of each year, the Member, Spouse and Beneficiary have been in receipt of pension payments for less than 12 months in aggregate, the Post-Retirement Cost of Living Factor shall be pro-rated over the number of months for which pension payments have been made.

In no event shall the multiple of all the Post Retirement Cost of Living Factors applied since the pension payments originally commenced be less than 1.00. (see Amendment)

7.03 Application Of A Cost Of Living Factor To Terminated Members' Vested Benefits (see Amendment)

Subject to Section 6.07, a Member who has terminated and who is entitled to a deferred vested pension under the Plan shall have his or her pension adjusted on July 1st each year during the deferral period by multiplying the then current amount of such pension by a cost of living factor to be determined by the Pension Committee each year. In no event shall the multiple of all the cost of living factors applied during the deferral period from January 1, 1987 exceed the percentage increase in the average wage from January 1, 1986, as defined in the Income Tax Act, during the deferral period. If, on such July 1st, less than 12 months have elapsed during the deferral period, the cost of living factor shall be pro-rated over the number of months of the deferral period prior to July 1st.

Notwithstanding the foregoing, the cost of living factor determined by the Pension Committee each year shall not be applied during the deferred period to any Member who terminated during the period from July 1, 1977 to December 31, 1986. Once the Member's pension has commenced, the Post Retirement Cost of Living Factor will take effect from July 1st of the calendar year after the Member's pension commencement date, on the condition that the Member has received at least one regular monthly pension payment prior to July 1st. (see Amendment)

Article 8 - Normal And Optional Forms Of Pension

8.01 Normal Form Of Pension

The normal form of pension payable to a Member, shall be an annual pension payable in equal monthly instalments commencing on the Member’s retirement date and payable on the first day of each month thereafter for life and guaranteed to continue to the retired Member or to the Beneficiary or estate, as the case may be, for a period of at least 120 months.

8.02 Joint And Survivorship Pension (see Amendment)

(a) Notwithstanding Section 8.01, a Member who has a Spouse on the date that pension payments commence shall receive a joint and survivorship pension which is the Actuarial Equivalent of the normal form of pension, payable during the Member's lifetime and continuing after his or her death to his or her Spouse for life in the same amount or a lesser amount, but in no event less than 60% of the Member's reduced pension.

(b) A Member who has a Spouse may elect any other form of pension which provides no benefit to the Spouse or a benefit to the Spouse that is less than 60% of the benefit paid to the Member if:

(i) the Member delivers to the Pension Committee, within the 12-month period immediately preceding the date upon which payment of the pension is to commence, the written waiver of the Member and the
Member's Spouse in the form prescribed under the Pension Benefits Act; and

(ii) this waiver is not revoked by the Member and Member's Spouse prior to the commencement of pension.

8.03 Other Forms Of Pension (see Amendment)

A Member who has no Spouse or who has a Spouse and has waived the joint and survivorship pension may elect to receive in lieu of the normal form of pension provided under the Plan, any other form of pension which is allowable under the Pension Benefits Act and the Income Tax Act and which is mutually agreeable to the Member and the Pension Committee. Such pension shall be subject to the Post Retirement Cost of Living Factor as described in Article 7. This optional form of pension shall be the Actuarial Equivalent of the normal form of pension and shall include, without limiting the options:

(a) Single Life Option

This is an increased pension payable during the Member's lifetime, with the last payment falling due in the month of the Member's death.

(b) Five Year Certain Option

The option is an increased pension payable during the Member’s lifetime but guaranteed to be paid for a minimum of 60 monthly payments in any event.

(c) Fifteen Year Certain Option

This is a reduced pension payable during the Member's lifetime but guaranteed to be paid for a minimum of 180 monthly payments in any event.

(d) Level Income Option

This will provide an adjusted amount of pension payable in a greater amount during the period before commencement of government benefits and a reduced amount thereafter so that the total pension from this Plan and the Member's Canada Pension Plan and/or Old Age Security benefits shall be as nearly uniform as possible throughout his or her lifetime.

8.04 General Provisions Relative To Options

The optional forms of benefit described in this Article shall be subject to the following conditions, having due regard to the provisions of Section 8.02. (see Amendment)

(a) An optional form of benefit may be elected by a Member or a change in Beneficiary designation may be made at any time prior to commencement of pension payments by completing the form provided for the purpose.

(b) A Member shall no later than the date on which he or she is to retire provide proof satisfactory to the Pension Committee of the age of his or her Spouse.

(c) If a Member is required to or has elected to receive a joint and survivorship pension and

(i) if the Spouse dies before commencement of the pension, the election shall become void;

(ii) if the Member dies before commencement of the pension, the election shall become void and his or her Spouse shall instead receive a benefit determined in accordance with Section 10.01;

(iii) if the Spouse dies after the commencement of the joint and survivor pension the Member shall continue to receive the reduced pension payable to him or her in accordance with the option. (see Amendment)

(d) Revocation of the waiver of a joint and survivorship pension and election of a joint and survivorship pension or the revocation of the election of another optional form of pension may be made at any time before the Member's retirement.

(e) If on the death of a retired Member there are payments outstanding in accordance with Section 8.01 or another form of guaranteed pension, any benefits payable to the Member's estate or subsequently to the estate of the Beneficiary may, with the approval of the Pension Committee, be commuted and paid in a lump sum. (see Amendment)

(f) Unless a form of pension under which pension payments are made during the retired Member's lifetime only is elected, a retired Member and his or her Spouse, Beneficiary and estate shall receive in total benefits of an amount not less than the Member's regular employee contributions made while a Member of the Plan, plus Credited Interest to the date of retirement and less Excess Contributions already paid to the Member.

(see Amendment for 8.04(g))

Article 9 - Disability Benefits

9.01 Disability Benefit

An Employee who is a Member and who is Totally Disabled shall cease making contributions under the Plan and the Member shall continue to accrue pension benefits as an active Member. Such Member shall for all purposes of the Plan, except in determining Excess Contributions, be deemed to have made regular Employee contributions at the normal rate based on Earnings in effect as at commencement of disability, adjusted each year thereafter up to and including July 1, 1984 by the post- retirement cost of living adjustment awarded to pensioners. Thereafter Earnings will be adjusted each July 1 as determined by the Pension Committee as described in Section 2.11.

9.02 Cessation Of Disability

A Member who, having been Totally Disabled, ceases to be Totally Disabled shall cease to accrue pension credits. If such Member is returned to active employment by the University he or she shall immediately resume making regular Employee contributions under the Plan. If the Member is not returned to active employment by the University such Member shall receive the benefits to which he or she is entitled under Article 6 or 11 hereof.

A Member who reaches his or her Normal Retirement Date while Totally Disabled shall be retired as of that date, and shall receive the pension benefit described in Article 6.

Article 10 - Death Benefits

10.01 Death In Service Before Retirement

If a Member dies in service he or she shall be deemed to have terminated employment as of the date of death and the Commuted Value of the deferred life annuity to which the Member would have been entitled under Section 11.01 in respect of service after December 31, 1986 and any Excess Contributions attributable to such service shall be payable in a lump sum to the Member's Spouse or, where there is no Spouse, or where the Member and the Member's Spouse have delivered to the Pension Committee a written waiver in the form prescribed under the Pension Benefits Act, such amounts can be payable to the Member's Beneficiary or estate.

In addition the Member's Beneficiary shall receive an amount equal to the Member's regular Employee contributions made up to December 31, 1986 and any additional voluntary contributions, all with Credited Interest to date of death.

10.02 Death After Termination Of Employment

If a Member who terminated employment and who is entitled to benefits under this Plan dies before commencement of his or her pension, the Commuted Value of the portion of the pension which is in respect of his or her service after December 31, 1986 together with any Excess Contributions attributable to such service shall be payable in a lump sum to the Member's Spouse or, where there is no Spouse, or where the Member and the Member's Spouse have delivered to the Pension Committee a written waiver in the form prescribed under the Pension Benefits Act, such amounts can be payable to the Member's Beneficiary or estate. In addition, the terminated Member's Beneficiary shall receive an amount equal to the Member's
regular Employee contributions made prior to December 31, 1986 and any additional voluntary contributions, all with Credited Interest to date of death.

10.03 Optional Annuity Payments

In lieu of the lump sum amounts payable to a Member’s Spouse under Sections 10.01 and 10.02 above, the Spouse may elect, within 180 days of being advised of the entitlement under this Section, that payment be made to the Spouse in the form of an immediate or deferred life annuity commencing no later than the first day of the month coincident with or next following the Spouse’s attaining age 65. Any life annuity elected shall not have a guaranteed period in excess of 15 years. If the Spouse fails to elect within 180 days of being advised of the entitlement under this Section, the Spouse will be deemed to have elected an immediate annuity without a guaranteed period. The post-retirement cost of living adjustment under Article 7 shall apply to any pension payable under this Section 10.03.

10.04 Death After Retirement

On the death of a Member after retirement benefits will be paid in accordance with the optional form selected by the Member.

10.05 Beneficiary

Each Member may designate in writing a Beneficiary to receive any amounts payable on his or her death other than those which are required to be paid to the Member's Spouse, and may change such Beneficiary designation by completing and delivering to the Pension Committee the form prescribed for the purpose. If there is no Spouse or Beneficiary surviving on the death of the Member, payment shall be made to the Member's estate.

10.06 Payment Of Death Benefits

Any death benefit payable in a lump sum under the Plan shall be paid as soon as practicable after the Member's death.

Article 11 - Termination Of Employment

11.01 Termination Prior To Statutory Vesting

On termination of employment other than by death or retirement, a Member who has not

(i) attained age 45 and completed 10 or more years of Continuous Employment, or

(ii) completed two or more years of Plan membership,

shall receive a refund of his or her regular Employee contributions with Credited Interest or in lieu thereof may elect to receive a deferred life annuity, commencing at Normal Retirement Date calculated in accordance with Section 6.01. Such deferred pension calculated pursuant to this Section 11.01 shall be paid in the form of pension described in Section 8.01. Any Excess Contributions shall be dealt with as provided in Section 11.03.

11.02 Termination Following Statutory Vesting

On termination of employment a Member who has

(a) attained age 45 and completed 10 or more years of Continuous Employment, or

(b) completed two or more years of Plan membership,

shall not be entitled to a refund of his or her regular Employee contributions but shall receive instead the deferred pension described in Section 11.01 above.

Notwithstanding the above, a Member who terminates employment and who has not attained age 45 and completed 10 years of Continuous Employment may elect to receive a refund of his or her regular Employee contributions made prior to January 1, 1987 together with Credited Interest in which case he or she will receive a deferred pension in respect of Credited Service following January 1, 1987.

11.03 Maximum Member Cost

On termination of employment of a Member his or her required contributions with Credited Interest shall not provide for more than 50% of the Commuted Value of the pension elected by the Member under Sections 11.01 and 11.02 above.

Any Excess Contributions arising from the application of this Section shall at the option of the Member:

(a) be paid to the Member in a lump sum cash settlement, or

(b) be used to purchase an additional amount of immediate or deferred life annuity from an insurer designated by the Member, or

(c) be transferred to another registered pension plan or tax exempt trust or plan designated by the Member.

11.04 Treatment Of Additional Voluntary Contributions Made To The Plan Prior To January 1, 1999

Additional voluntary contributions made by a Member to the Plan prior to January 1, 1999 in accordance with Section 4.03 plus Credited Interest shall at the option of the terminating Member:

(a) be paid to the Member in a lump sum cash settlement,

(b) (See Amendment) be used to purchase an additional amount of immediate or deferred life annuity from an insurer designated by the Member, or

(c) be transferred to another registered pension plan or tax exempt trust or plan designated by the Member.

11.05 Transfer Of Commuted Values

(a) (See Amendment) A Member who terminates employment may request that an amount equal to the Commuted Value of the deferred pension be transferred

(i) to the pension fund of another pension plan on a locked-in basis if the administrator of that plan agrees to accept it,

(ii) into a prescribed locked-in retirement savings arrangement, or

(iii) for the purchase for the former Member of a life annuity that will not commence before the earliest date on which the former Member would have been entitled to receive pension benefits under this Plan. The amount of the annuity purchased shall be determined on a basis independent of the sex of the Member.

(b) The Pension Committee shall not permit a transfer or purchase under paragraph 11.05(a) unless the Pension Committee is satisfied that:

(i) the transfer or purchase is in accordance with the Pension Benefits Act;

(ii) any restrictions in the Pension Benefits Act with regard to the solvency of the Plan have been met; and

(iii) the transfer is made in accordance with Section 147.3 of the Income Tax Act.

(c) Amounts transferred in accordance with paragraph 11.05(a) on and after January 1, 1989 shall not exceed the maximum amount prescribed under the Income Tax Act, and the excess of the Commuted Value, plus Credited Interest, if any, over the amount transferred shall be paid to the Member in a lump sum as permitted under the Income Tax Act and the Pension Benefits Act.

(d) A Member who is entitled to a refund of required contributions under Article 11 may elect to transfer the refunded amount to a registered retirement savings plan.

(See Amendment for 11.06)

Article 12 - Transfer Of Monies To And From Pension Fund

12.01 Transfers To Pension Fund

An Employee, who immediately prior to entering the service of the University was a participant in a previous employer's registered pension plan may transfer to the Pension Fund monies payable from such previous registered pension plan, subject to the consent of the Pension Committee, and upon application therefore within six months of entering the service of the University. The Pension Committee may approve the transfer only if the Employee has provided certification from the previous employer that, after the transfer to the Pension Fund, no benefits remain payable from the previous registered pension plan, and certification of pensionable service and pension adjustment history.

12.02 Credited Past Service and Calculation of Pension Benefits (See Amendment)

As a result of the transfer to the Plan under Section 12.01 and subject to the certification of any past service pension adjustment (as defined under the Income Tax Act), the University shall grant to the Member the amount of Credited Service which can be purchased by the transferred amount, based on the recommendation of the Actuary, calculated using the financial and demographic assumptions used for the purpose of performing the last actuarial valuation of the Plan, using the service history of the Member with the previous employer, using Earnings of the Member with the University, and using the assumption that the maximum pension described in paragraph 6.07(a)(i) will be indexed to increases in the Average Industrial Wage to the Member’s Normal Retirement Date, as permitted by the Income Tax Act. For purposes of this Section 12.02, and Section 12.04, if applicable, such Credited Service shall be classified as Credited Past Service.

Notwithstanding any other provision of the Plan:

(a) the University shall not grant Credited Past Service under the Plan in excess of the pensionable service granted to the Member under the registered pension plan of the previous employer; and

(b) upon the Member’s subsequent retirement, termination of employment or death, the Member shall be entitled to receive a benefit equal to:

(i) the benefit payable in accordance with Articles 6, 10 or 11, as applicable, for Credited Service to the date the Member’s Continuous Employment terminates, exclusive of the Member’s Credited Past Service granted under this Section 12.02, and under 12.04, if any; plus

(ii) the greater of:

(1) the portion of the amount transferred into the Plan pursuant to Section 12.01 that represents the Member's contributions to the previous employer's registered pension plan, if any, with credited interest to the date of transfer, and the amount contributed to the Plan pursuant to Section 12.04, if any, credited each Plan Year with interest calculated at a rate equal to the rate of return as can reasonably be attributed to the Pension Fund; and

(2) the Commuted Value of the benefit payable under Articles 6, 10 or 11, as applicable, for the Member’s Credited Past Service granted under this Section 12.02, and Section 12.04, if any.
The benefit payable to a Member under this Section 12.02(b) shall be payable in the form and manner provided under Articles 6, 10 or 11, as applicable, except as provided in Section 12.03.

Any monies transferred pursuant to this Section 12.01 and any contributions made by a Member pursuant to Section 12.04, and any Credited Past Service granted in respect thereof, shall be excluded in determining the Member’s Excess Contributions for purposes of Section 11.03.

12.03 Vesting And Locking-In

Upon subsequent termination of employment with the University or retirement under the Plan, the amount transferred to the Plan pursuant to Section 12.01, or the amount contributed to the Plan pursuant to Section 12.04, and the benefits provided therefrom shall be fully vested and non-commutable and the Member shall receive only a pension benefit therefrom or a transfer pursuant to Section 11.05.

12.04 Purchase Of Additional Credited Service

Should the amount transferred to the Plan pursuant to Section 12.01 be insufficient to purchase Credited Service equal to the pensionable service credited to the Member in the previous employer's pension plan, the Member may purchase Credited Service up to or equal to the difference, by contributing an amount or amounts to the Plan, as determined by the Actuary and calculated using the rules described in Section 12.02 to establish the amount of Credited Past Service attributable to the amounts transferred to the Plan. The purchase of Credited Past Service and the making of contributions for that purpose pursuant to this Section 12.04 shall be permitted only after certification of the appropriate past service pension adjustment (as defined under the Income Tax Act) is received from the Canada Customs and Revenue Agency, if applicable, and only as permitted pursuant to the Income Tax Act.

12.05 Transfers From Pension Fund

Any transfer of monies from the Pension Fund on behalf of a Member shall be dealt with in accordance with the appropriate paragraphs of Articles 6 and 11.

Article 13 - Payment Of Benefits

13.01 General

All amounts due under the Plan shall be payable in accordance with the provisions of this Article 13 and no payment shall be made under the Plan unless it shall have been authorized by the Pension Committee or any person or persons delegated by the Pension Committee to act on its behalf.

13.02 Duration Of Pension

Every pension payable hereunder to a retired Member shall commence as of the date of the Member's retirement, subject to the provisions of Article 6 and shall be payable on the first day of each calendar month thereafter during his or her lifetime subject to the provisions of Article 8.

13.03 Re Employment Of A Retired Member

The pension payable under the Plan to any retired Member who is rehired by the University shall cease as of the Member's date of re hire, and shall resume as of the first day of the month following his or her subsequent retirement, unless contrary to the terms of the Pension Benefits Act of Ontario and other applicable legislation.

In any case where the payment of a pension is suspended on account of re employment, the amount of the pension to be paid on subsequent retirement, whether before or after normal retirement date, shall be actuarially determined on the basis of the increased service, age, amount of benefit already paid prior to final retirement, Employee contributions and any other relevant factors, subject to any limits prescribed in the Income Tax Act. Notwithstanding the foregoing, if the retired Member has ever been in receipt of a pension from the Plan while employed by the University, he or she shall continue to receive his or her pension and the Member shall not accrue further benefits during the period of re-employment.

13.04 Commutation Of Small Payments

In the event that the pension payable at Normal Retirement Date is less than an annual amount equal to two (2) percent of the Year's Maximum Pensionable Earnings in the year of the Member's retirement or termination, the Pension Committee may direct that in lieu of the periodic payments, the Commuted Value thereof be paid to the Member in a lump sum.

13.05 Payments To Minors And Incompetents

If the Pension Committee shall receive evidence satisfactory to it that a Member, Spouse or Beneficiary entitled to receive any benefit under the Plan is, at the time when such benefit becomes payable, a minor or is physically or mentally incompetent to receive such benefit and to give a valid release thereof and that another person or an institution is then maintaining or has custody of such Member, Spouse or Beneficiary, and that no committee, guardian or other representative shall have been duly appointed, the Pension Committee may authorize payment of such benefit otherwise payable to the Member, Spouse or Beneficiary to such other person or institution, and the release of such other person or institution shall be valid and complete discharge for the payment of such benefit.

13.06 Mis Statement In Application To Enter Plan

If a Member in his or her application to enter the Plan, or in response to any request of the University or the Pension Committee for information, makes any statement which is erroneous or omits any material fact or fails before receiving his or her first pension payment to correct any information previously incorrectly furnished to the University or the Pension Committee for its records, the amount of any overpayment or underpayment theretofore made to such Member shall be deducted from or added to his next succeeding payments as the Pension Committee shall direct.

Article 14 - Pension Fund

14.01 Pension Fund

(a) The University has established and shall maintain a Pension Fund into which shall be paid the contributions made under the terms of the Plan. The Pension Fund shall not form any part of the revenue or assets of the University.

(b) At no time shall any part of the corpus or income of the Pension Fund be used for, or diverted to, any purposes other than for the exclusive benefit of Members, their Spouses and Beneficiaries. No person shall have any interest in or right to the Pension Fund or any part thereof, except as expressly provided in the Plan.

14.02 Payment Of Expenses

All normal and reasonable expenses incurred in the operation of the Plan shall be paid from the Pension Fund, unless paid directly by the University. The outside providers of such services shall be deemed to be retained by the Pension Committee regardless whether their expenses are paid from the Pension Fund or paid directly by the University.

14.03 Annual Actuarial Examination

At least once in each year the Pension Committee shall cause the liabilities of the Plan to be evaluated by the Actuary who shall report to the Pension Committee as to:

(a) the soundness and solvency of the Pension Fund in relation to the aforesaid liabilities and the requirements of any applicable legislation; and

(b) the amount of the contributions by the University for the year in question which would be sufficient to provide for the accruing benefit liabilities.

14.04 Investments

The investments of the Pension Fund shall be restricted to the securities and loans permitted by the Pension Benefits Act and the Income Tax Act or other applicable legislation and shall be made in accordance with the written statement of investment policies and goals for the Plan.

Article 15 - Administration

15.01 Pension Committee

The Plan shall be administered by the Pension and Benefits Committee of the University of Waterloo. For purposes of administering the Pension Plan, the Pension and Benefits Committee shall be referred to as the Pension Committee.

The membership of the Pension and Benefits Committee and the method of appointing members to the Committee will be as determined from time to time by the Board of Governors.

The Secretariat will function as Secretary to the Pension Committee.

Day to day operation of the Plan will be a function of the Human Resources Department with operating decisions based on rules and regulations adopted by the Pension Committee.

15.02 Powers Of Pension Committee

The Pension Committee shall have full responsibility for and control of the administration of the Plan as this directly affects Employees and Members, which shall include, but not be limited to, the following:

(a) to make and enforce such rules and regulations as it shall deem necessary or proper for the efficient administration of the Plan;

(b) to interpret the Plan, its interpretation thereof in good faith to be final and conclusive, subject to the provisions of the Pension Benefits Act;

(c) to compute the amount of benefits or other payments which shall be payable to any Member, Spouse, or Beneficiary, in accordance with the provisions of the Plan, and to determine the person or persons to whom such amount shall be paid, having regard to applicable legislation;

(d) to authorize all payments to be made for such purposes;

(e) to prepare accounts and records showing the detailed operation of the Plan; and

(f) to arrange for the audit of such records and accounts by independent auditors.

15.03 Uniform Administration

Whenever, in the administration of the Plan, any action by the Pension Committee or the University is required, such action shall be uniform in nature as applied to all persons similarly situated.

15.04 General

Members of the Pension Committee may participate in the benefits under the Plan provided they are otherwise eligible to do so. Except as otherwise provided by the Board of Governors of the University, no member of the Pension Committee shall receive any compensation for his or her services as such. No bond or other security shall be required of any member of the Pension Committee in such capacity in any jurisdiction, except as expressly provided by law.

In administering the Plan neither the Pension Committee, nor any member thereof, nor the Board of Governors of the University, nor any officer or employee thereof, shall be liable for any acts of omission or commission, except for his or its own individual, wilful and intentional malfeasance or misfeasance. The University and its officers and directors, and each member of the Pension Committee shall be entitled to rely conclusively on all tables, valuations, certificates, opinions and reports which shall be furnished by an Actuary, accountant, trustee, counsel or other expert who shall be employed and engaged by the University or the Pension Committee.

Article 16 - General Conditions Of Membership

16.01 Limitation On The Rights Of Members And The Obligations Of The University

The rights of any person entitled to receive any payment or benefit under this Plan shall be limited to the assets of the Pension Fund as existing from time to time. No right or claim of any employee or other person entitled to receive any payment or benefit under this Plan shall be asserted or made against the University, the Pension Committee or the Officers or Governors of the University by reason of this Plan or of the Trust Agreement except in respect of a benefit provided for by this Plan which has become due and payable in accordance with the provisions hereof.

16.02 Plan Not A Contract Of Employment

Nothing contained in this Plan or in the Trust Agreement shall confer or imply any right in any person to be retained in the service of the University.

16.03 Non Alienation

Except as specified in Section 16.04 money payable under the Plan is subject to the following restrictions:

(a) Non-Enforceable Transactions: any transaction that purports to assign, change, anticipate, surrender, or give as security any right of a person under the Plan or money payable under the Plan shall not be enforceable against the Plan; and

(b) Exemption From Seizure: money payable under the Plan is exempt from execution, seizure or attachment.

16.04 Alienation Of Benefits On Marriage Breakdown

(a) Support Obligations: upon the breakdown of a Member's spousal relationship, payments under the Plan are subject to execution, seizure or attachment in satisfaction of an order for support or maintenance enforceable in Ontario or another relevant jurisdiction to a maximum of one-half of the money payable.

(b) Division Of Property: upon the breakdown of a Member's spousal relationship, the Member may assign, pursuant to a court order under Part I of the Family Law Act of Ontario or a written domestic contract as defined by Part IV of that Act, up to 50% of the pension benefits accrued by the Member under the Plan during the spousal relationship to his Spouse or former Spouse, calculated in accordance with the requirements of the Pension Benefits Act.

16.05 Explanation To Members

Each Member shall be given a written explanation of the terms and conditions of this Plan and amendments thereto applicable to him or her together with an explanation of his or her rights and duties with respect to the benefits available to him or her under the terms of this Plan.

16.06 Severability

If any provision of the Plan is held to be invalid or unenforceable by a court of competent jurisdiction, its invalidity or unenforceability shall not affect any other provision of the Plan and the Plan shall be construed and enforced as if such provision had not been included therein.

16.07 Notice Of Amendment

The University shall provide a notice and written explanation of an amendment to the Plan to each Member, or any other person entitled to payment from the Pension Fund, who is affected by the amendment, within the applicable time period prescribed under the Pension Benefits Act.

16.08 Annual Statement

The University shall provide annually to each active Member a written statement containing the information prescribed under the Pension Benefits Act in respect of the Member's benefits under the Plan.

Article 17 - Termination Of The Plan

17.01 Amendments Or Modification

The University expects and intends to maintain the Plan in force indefinitely but necessarily reserves the right to amend, terminate or wind up the Plan in whole or in part at any time. No amendment, termination or wind up of the Plan shall result in a reduction of any accrued benefits of Members, pensioners, Spouses, or Beneficiaries including any cost of living adjustments granted except where due to insufficient funds in the Pension Fund upon termination or wind up, a reduction of benefits is authorized by the provincial regulatory authorities.

Where an amendment results in a certifiable past service pension adjustment (as defined under the Income Tax Act) in respect of a Member, the amendment shall not apply to such Member prior to certification of the past service pension adjustment in accordance with the Income Tax Act.

If the Plan is wound up in whole or in part, and in the event of insufficient funds, the University shall make further contributions to the Pension Fund, as required, equal to the difference between the normal cost and the contributions that were remitted in accordance with Section 4.02.

In the event of the termination or wind up of the Plan, such wind up will be carried out in accordance with the provisions of the Pension Benefits Act and the Income Tax Act.

17.02 Distribution Of Surplus

Any surplus remaining in the Pension Fund after the satisfaction of all benefit rights or contingent rights accrued under the Plan shall be allocated among all Members, pensioners, Spouses and Beneficiaries in proportion to the Commuted Value, as determined by the Actuary, of the benefits other than voluntary contributions to which they are entitled, subject to the maximum benefit paid under Section 6.07, and subject to certification of any past service pension adjustment under the Income Tax Act.

Article 18 - Applicable Law

18.01 This Plan shall be construed and interpreted in accordance with the laws of the Province of Ontario.

Article 19 - Optional Ancillary Contributions And Optional Ancillary Benefits

19.01 Purpose and Implementation

The purpose of this Article 19 is to enable Plan Members to make optional ancillary contributions to the Plan in order to enhance the ancillary features of their pension otherwise payable under the defined benefit component of the Plan. This section is being added to the Plan for the sole purpose of improving Plan Members’ ability to save for retirement on a tax sheltered basis.

The additional benefits associated with this Article 19 are to be fully Employee paid. For greater certainty, the minimum employer contribution rule prescribed by Section 6.06 shall be applied to the pension otherwise payable from the defined benefit component of the Plan, without regard to the optional ancillary benefits associated with this Article 19.

In the event the addition of this Article 19 to the Plan would have the effect under applicable pension legislation of increasing the cost to the University of otherwise providing benefits under the Plan, this Article will be terminated as of its original effective date, and any Member contributions to the Plan made in accordance with this Article 19 will be returned to the affected Members, with interest credited in accordance with Section 19.04.

19.02 Definitions

The following phrases shall for the purposes of this Article 19 have the following meanings:

Net Contribution Account means “net contribution account” as defined in the Income Tax Act.

Post-1989 Optional Ancillary Account means the account established by the University in the name of the Member, to which shall be credited all the Member’s optional ancillary contributions made in accordance with Section 19.03(a) plus applicable interest and/or investment earnings.

19.03 Optional Ancillary Contributions

(a) Subject to Section 19.03(c), a Member may elect to make optional ancillary contributions to the Plan in the manner prescribed by the University. Upon such election by the Member, optional ancillary contributions will be made by regular payroll deduction and/or, upon the approval of the University, by one or more lump sum contribution(s). Such contributions shall be credited to the Member’s Post-1989 Optional Ancillary Account.

(b) The Member’s election to make such optional ancillary contributions, or to vary, suspend, or terminate the amount of such contributions are subject to the terms and conditions as prescribed by the University from time to time, such terms and conditions which shall be submitted to the Canada Customs and Revenue Agency.

(c) The optional ancillary contributions made by a Member in a calendar year shall not exceed the amount, if any, by which

(i) the lesser of:

(1) 9% of Member’s compensation for the year from employers participating in the Plan; and

(2) $1,000 + 70% of the Member’s defined benefit pension credits for the year under the Plan,

exceeds
(ii) the amount of current service contributions (other than optional ancillary contributions) the Member makes in the year under the defined benefit component of the Plan.

(d) Each Member’s optional ancillary contributions shall be remitted to the Pension Fund within 30 days following the month the amount was deducted or received, and credited to the Member’s Post-1989 Optional Ancillary Account in the Pension Fund.

(e) The amount in a Member’s Post 1989 Optional Ancillary Account must be used to provide optional ancillary benefits as described in Section 19.05 and may not be used for any other purpose. Subject to Section 19.07, the Member’s Post-1989 Optional Ancillary Account may not be refunded to the Member, the Member’s Spouse or Beneficiary, as the case may be.

(f) The University shall provide to Members who elect to make optional ancillary contributions to the Plan pursuant to this Section 19.03, information described in Section 19.09 in order to assist Members in monitoring their Post-1989 Optional Ancillary Account balances.

19.04 Interest on Optional Ancillary Contributions

Each Member’s Post-1989 Optional Ancillary Account shall be credited in each Plan Year with interest calculated at a rate equal to the rate of return as can reasonably be attributed to the Pension Fund in respect of such Plan Year.

19.05 Benefits on Termination/Retirement

When a Member retires, or terminates prior to pension commencement, the Member’s Post-1989 Optional Ancillary Account shall be applied to purchase optional ancillary benefits in respect of the pension otherwise payable to the Member from the defined benefit component of the Plan in respect of the Member’s service on or after January 1, 1990.

Such optional ancillary benefits shall include the following:

(a) early retirement pension
provide an early retirement benefit as described in Section 6.02(a), except that the pension described in Section 6.01 based on Credited Service, Final Average Earnings and average Year’s Maximum Pensionable Earnings at actual retirement date is reduced by 1/4 of 1% per month for each month by which early retirement precedes the earliest of the dates on which:

(i) the Member will attain age 60;

(ii) the Member’s age plus Continuous Employment (excluding periods of layoff) would have equalled 80; and

(iii) the Member would have completed 30 years of Continuous Employment (excluding periods of layoff),

provided that no reduction applies in the case of a pension payable as a result of a Total and Permanent Disability;

(b) bridge benefit
provide a bridge benefit, payable monthly, commencing on the Member’s early retirement date and payable until the earlier of his death or attainment of age 65. The amount of such bridge benefit shall be limited as follows:

(i) The maximum annual bridge benefit shall be equal to an amount up to but not exceeding the sum of the maximum benefits payable to the Member under the Canada Pension Plan, as applicable, and the maximum Old Age Security benefit, that would be payable if the Member were age 65 as at the Member’s pension commencement date.

(ii) The maximum annual bridge benefit described in paragraph (i) above shall be reduced by the minimum amount required by the Income Tax Act, which is a proportional reduction in the case of a Member who has completed less than 10 years of Credited Service at the pension commencement date, and a further reduction of 1/4 of 1% for each month by which the pension commencement date precedes the date that the Member will attain age 60.

(iii) In addition, the annual bridge benefit (payable under this Section) combined with the annual lifetime pension (payable under Section 6.02 and under an associated defined benefit provision as defined for this purpose by the Income Tax Act, all provided in respect of periods after December 31, 1991), shall not exceed (1) plus (2) as follows:

(1) $1,722.22 or such greater amount as may be prescribed for this purpose by the Income Tax Act, multiplied by the Credited Service of the Member after December 31, 1991; plus

(2) 1/35th of 25% of the average of the Year’s Maximum Pensionable Earnings for the year of retirement and each of the two immediately preceding years, multiplied by the Credited Service of the Member after December 31, 1991, not exceeding 35 years;

(c) pre-retirement indexing during the deferral period
add the following to the end of the definition of “Final Average Earnings” in Section 2.14, for the purpose of determining the pension benefit in Section 6.01:
The monthly Earnings used in such calculation may be indexed to increases in the average wage (as defined in section 147.1 of the Income Tax Act) to the year of pension commencement of the Member’s pension; and

(d) survivor benefits
replace the normal form of pension for a Member with a Spouse as provided in Section 8.02(a) with a joint and survivorship form of pension payable in an unreduced amount for the lifetime of the Member and then reduced to an amount not exceeding 66-2/3% on the death of the Member, with or without a guarantee of up to 60 monthly payments; or
replace the normal form of pension for a Member without a Spouse as provided in Section 8.01 with a pension payable in an unreduced amount for the lifetime of the Member, with or without a guarantee of up to 180 monthly payments;
The cost of purchasing such optional ancillary benefits shall be equal to the Commuted Value of the optional ancillary benefits in respect of the Member.

In the event the Member’s Post-1989 Optional Ancillary Account balance exceeds the Commuted Value of the optional ancillary benefits elected by the Member in respect of the Member’ service on or after January 1, 1990, the Member shall not have any entitlement to such excess amount, and such excess amount shall be reallocated from the Member’s Post-1989 Optional Ancillary Account in the Pension Fund to the unallocated assets in respect of the defined benefit component of the Plan in the Pension Fund.

19.06 Portability

Alternatively to Section 19.05, in the event a Member retires, or terminates prior to pension commencement, and elects to transfer the Commuted Value of his or her pension otherwise payable from the defined benefit component of the Plan in accordance with Section 11.05 of the Plan, the transfer amount shall include the Commuted Value of the optional ancillary benefits elected by the Member.
In the event the Member’s Post-1989 Optional Ancillary Account balance exceeds the Commuted Value of the optional ancillary benefits elected by the Member in respect of the Member’s service on or after January 1, 1990, the Member shall not have any entitlement to such excess amount, and such excess amount shall be reallocated from the Member’s Post-1989 Optional Ancillary Account in the Pension Fund to the unallocated assets in respect of the defined benefit component of the Plan in the Pension Fund.

For the purpose of greater clarity, the limit prescribed under Section 11.05(c) shall apply to the transfer amount inclusive of the Commuted Value of the optional ancillary benefits elected by the Member.

19.07 Refund of Net Contribution Account

Notwithstanding the prohibition on the refund of part or all of the Member’s Optional Ancillary Account described in Section 19.03(e), and notwithstanding the reallocation of the excess portion of the Member’s Post-1989 Optional Ancillary Account described in Sections 19.05, 19.06 and 19.08, in the event

the Member’s Post-1989 Optional Ancillary Account balance, plus the Member’s required contributions made under the Plan, plus Credited Interest, credited to his or her Net Contribution Account in respect of the defined benefit component of the Plan

exceeds

the Commuted Value of the Member’s pension otherwise payable from the defined benefit component of the Plan, plus the Commuted Value of the optional ancillary benefits elected by the Member,

the Member shall be entitled to a refund of such excess amount.

19.08 Pre-Retirement Death

In the event a Member dies prior to pension commencement, the Member’s Post-1989 Optional Ancillary Account shall be applied to purchase optional ancillary benefits as if the Member had terminated employment the day before he died. The Member’s Spouse shall elect the optional ancillary benefits on the Member’s behalf. If the Member does not have a Spouse on the date of death, the University shall elect the optional ancillary benefits on the Member’s behalf.

In the event the Member’s Post-1989 Optional Ancillary Account balance exceeds the Commuted Value of the optional ancillary benefits elected in respect of the Member’s service on or after January 1, 1990, the Member’s Spouse or Beneficiary, as applicable, shall not have any entitlement to such excess amount, and such excess amount shall be reallocated from the Member’s Post-1989 Optional Ancillary Account in the Pension Fund to the unallocated assets in respect of the defined benefit component of the Plan in the Pension Fund.

For greater certainty, the form of the benefit payable to the Spouse, or to the Beneficiary, pursuant to this Section 19.08, shall be in the same form elected by the Spouse, or payable to the Beneficiary, pursuant to Sections 10.01, 10.02, or 10.03, as applicable.

19.09 Information to Members

In addition to the information required by the Pension Benefits Act to be included on the Member’s annual statement, the University shall include a statement of the amount in the Member’s Post-1989 Optional Ancillary Account as at December 31 of the statement year.

19.10 Designated Plan

Optional Ancillary Contributions cannot be made in any year that the Plan is a designated plan as defined in the Income Tax Act. Optional ancillary benefits cannot be provided for any period in a year in which the Plan is a designated plan as defined in the Income Tax Act.

(See Amendment for Article 20) (See Amendment for 20.01)

(See Amendment for Schedule A)

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