Important Information Bulletin Regarding your GIDIP Policy Renewal with Manulife Financial Effectiv

Important Information Bulletin Regarding your GIDIP Policy Renewal with Manulife Financial Effectiv

January 5, 2009 at 12:00 AM
RE: CAW Local 2002 Disability Trust Fund
Group Insurance Disability Income Plan (GIDIP)
Manulife Policy 71405
Policy Renewal – June 1, 2008

Dear Member:

We wrote to you in June 2008, to inform you of the renewal for GIDIP. We highlighted the direction your Trustees had to take to ensure the best value for the Members of CAW Local 2002. Effective June 1, 2008 we had to reduce the own occupation definition of disability from 36 months from date of disability to 24 months in order to minimize the renewal cost increase to our plan. With this change to the Plan, our premium rate increased by less than 0.25% of payroll for the next policy year.

The Trustees had decided not to pass along the rate increase to our Members for at least six months as we absorbed the higher rate funded by the investment income reserves in our Trust Fund. By the end of December 2008, the surplus funds will have absorbed $37,000 per month for a total of $222,000, which will not leave sufficient funds to further support the monthly shortfall of premiums over the balance of the policy year period to May 31, 2009.

During the course of the last five months, we continued to closely monitor the financial position of the Plan and at the end of September 30, 2008; the Long Term Disability Plan continues to have a significant deficit due to the growing number of disability claimants and the higher insurance reserve requirements to fund those claims over time. Although that’s the purpose of GIDIP and we’re proud that it was there to assist our colleagues in times of trouble and protect their wages, the Trust Fund is no longer in a financial position to continue to absorb the premium increase.

Therefore, Effective January 1, 2009 your GIDIP premium rate will increase from 3.30% of salary to 3.542%. In terms perhaps more easily understood, GIDIP premiums will increase by approximately $4.84 bi-weekly for Full Time Members and $2.42 bi-weekly for Part Time Members.

We will continue to keep you informed of the financial position of our plan and we are confident that the GIDIP represents the best balance of value for money and protection of our Members and we appreciate your support in this matter.

 

In Solidarity,

Your GIDIP Board of Trustees

Sophia Michailidis, Eastern Region, Chairperson; Terry Carlucci, Atlantic Region, Secretary-Treasurer; Darryl Draeger, Western Region, Trustee; Juanita Sumner, Central Region, Trustee; Ross McConkey, Pacific Region, Trustee

 

For more information:
CAW Local 2002