Message From The President Highlights It's A Defined Benefit Plan Sources Of Funding Buyer Beware Cost-Of-Living Adjustments Membership Benefit Changes Pension Commmittee Investment Committee Asset Mix Investments At December 31, 2000 Asset Types Investment Managers Custodian/Trustee Pension Plan Performance Financial Statements

You are in: The Plan : Publications : 2000 Annual Report : Financial Statements   Financial Statements Statement of Net Benefits Available for Benefits As at December 31   (in thousands) 2000   1999   Assets Cash $ 403   $ 87 Investments (Note 3)   962,533     960,990 Receivables   Investment income   1,916     3,139   Employee contributions   2     3       964,854     964,219   Liabilities Accounts payable & accrued liabilities   645     765 Net Assets Available for Benefits $ 964,209   $ 963,454   Statement of Changes in Net Assets Available for Benefits For the Years Ended December 31   (in thousands) 2000   1999   Increase in Net Assets Contributions $ 8,746   $ 8,611 Net investment income (Note 4)   59,653     86,260 Current period change in market value of investments   (1,420)     (12,083)       66,979     106,954 Decrease in Net Assets Pension benefits   37,117     36,029 Termination benefits   28,190     19,218 Administrative expenses   917     814       66,224     56,061 Increase in Net Assets for the Year   755     50,893 Net Assets Available for Benefits at  Beginning of Year   963,454     912,561 Net Assets Available for Benefits at  End of Year $ 964,209   $ 963,454   1. DESCRIPTION OF PLAN   The following description of the Manitoba Telecom Services Inc. and Participating Subsidiaries Employee Pension Plan (the “Plan”) is a summary only. For more complete information, reference should be made to the Plan document.   a) General     The Plan is a contributory defined benefit pension plan covering substantially all current and former employees of Manitoba Telecom Services Inc. (“MTS”) and its participating subsidiaries. The Plan came into effect on January 1, 1997 in accordance with The Manitoba Telephone System Reorganization and Consequential Amendments Act (the “Reorganization Act”). All current and former employees of The Manitoba Telephone System and its subsidiaries who were members of the Civil Service Superannuation Fund became members of the Plan on January 1, 1997. At December 31, 2000, the participating subsidiaries included MTS Communications Inc., MTS Advanced Inc., and MTS International Inc. The Plan is registered under the Pension Benefits Standards Act, 1985 (Canada) (“PBSA”).   b) Funding Policy     The Plan document sets out the arrangements for MTS and its participating subsidiaries, being the Plan sponsors, to fund the benefits determined under the Plan together with the employees. The amount of the funding by employees is based on a defined formula. The determination of the funding by the Plan sponsors is made on the basis of an actuarial valuation performed on at least a tri-annual basis. As required by the PBSA, MTS is responsible for making special payments to finance any unfunded liabilities of the Plan over a period not exceeding 15 years. Conversely, if the Plan is in a surplus position, MTS’s contributions could be reduced to zero.   c) Retirement Pensions     A retirement pension is based on the number of years of pensionable service and the highest five year average earnings. A retirement pension is payable to members who retire after completion of at least one year of membership in the Plan and who have attained age 65. Unreduced pensions are also payable to members who have reached at least age 55 and the sum of their age plus continuous service equals 80. With certain restrictions, reduced early retirement benefits are available to members with at least two years of membership in the Plan, who retire on or after age 55 with the sum of their age plus continuous service totaling less than 80, and to members who retire before age 55.   d) Disability Benefits     Members who are on long term disability after January 1, 1997 may be credited with pensionable service while disabled without making contributions to the Plan. Members may also be able to retire immediately and receive a disability pension from the Plan.   e) Termination Benefits     Subject to lock-in provisions, refunds and commuted value transfers are available when an active member ceases employment.   f) Death Benefits     Death benefits are available upon the death of an active member or deferred member and may be available upon the death of a retired member depending on the pension option chosen. The benefit may take the form of a lump-sum payment or a survivor pension.   g) Cost-of-Living Adjustments     The Plan provides for a guaranteed cost of living increase each year equal to 2/3 of the increase in the Consumer Price Index (“CPI”) for Canada to a maximum CPI increase of 4.0%.   h) Income Taxes     The Plan is a Registered Pension Plan as defined in the Income Tax Act (Canada). The MTS Pension Fund is not subject to income taxes.   2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   These financial statements have been prepared in accordance with generally accepted accounting principles and include the following significant accounting policies:   a) Basis of Presentation     These financial statements are prepared on the going concern basis and present the aggregate financial position of the Plan as a separate financial reporting entity independent of the Plan sponsor and Plan members.   b) Investments     Investments are recorded at market value where quoted prices are readily available. Real estate values are estimated based upon external appraisals conducted throughout the year.   c) Foreign Exchange     Foreign currency transactions are translated into Canadian dollars at rates of exchange prevailing at the dates of the transactions. At year end, the market value of investments denominated in a foreign currency are translated at the year-end exchange rate. Exchange differences are included in the determination of investment income or current period change in market value.   3. INVESTMENTS   (in thousands) 2000   1999 Short-term investments   Notes and securities $ 1,953   $ 6,530   Cash equivalent mutual funds   37,798     17,474   Total short-term   39,751     24,004 Bonds and debentures   Government guaranteed   144,518     136,845   Corporate   60,488     55,043   Mutual funds   143,660     135,190   Total bonds and debentures   348,666     327,078 Mortgages   Mortgage loans   143     146   Mutual funds   46,864     42,458   Total mortgages   47,007     42,604 Equities   Investment corporations   946     1,500   Real estate corporations   4,211     4,044   Resource corporations   33,006     44,318   Other   261,992     295,270   Mutual Funds   173,559     173,640   Total equities   473,714     518,772 Real Estate   Direct Investments   2,475     2,476   Mutual funds   50,920     46,056   Total real estate   53,395     48,532     $ 962,533   $ 960,990   4. NET INVESTMENT INCOME     (in thousands) 2000   1999 Investment Income $ 33,143   $ 41,156 Realized gains   29,463     47,927 Investment management and custodial expenses   (2,953)     (2,823)     $ 59,653   $ 86,260   5. AUDITORS REPORT   The financial information presented in these statements is an excerpt of the financial information included in the Plan’s audited financial statements. The financial statements have been audited by Deloitte & Touche LLP. Copyright 2004. All rights reserved.