LETTER OF UNDERSTANDING REGARDING FOUNDRY CREDITS. Xx. Xxxxx Xxxxxx National Representative CAW/TCA Canada 0000 Xxxxxxx Xxxxxx 0xx Xxxxx Xxxxxxx, Xxxxxxx X0X 0X0 Dear Xx. Xxxxxx: During the 1993 negotiations, the parties (the Employer, GM and the Union) agreed to continue the foundry credit provisions that were in effect at GM before Securitas acquired the GM security division. The provisions at GM allowed employees to acquire additional credited service for periods of employment at a foundry location. The provisions for additional credited service are now prohibited by Revenue Canada. However, to be consistent with the intent of these provisions, it has been agreed that the employees should be compensated for the loss of these provisions. In other words, such employees should be entitled to the same benefits with respect to credited service and eligibility as if Revenue Canada did not prevent the accrual of this additional service. To further clarify, eligibility for early retirement benefits, such as an enhanced immediate pension, the supplementary benefit and the special allowance, will be based upon service that includes these additional credits. However, if eligibility for any of these early retirement benefits was met by including these additional credits but would not be met if the additional credits were not included, the early retirement benefit(s) must be paid outside the pension fund. The parties agreed that, at termination, retirement or death, the employees will receive a lump sum payment of the commuted value of the above-described additional benefits (due to additional service and/or eligibility) to the extent that these additional benefits cannot be paid from the pension fund. The commuted value shall be calculated on the basis specified in the Canadian Institute of Actuaries Recommendations for the Computation of Transfer Values from Registered Pension Plans (effective September 1, 1993) or, if this is no longer in effect, the generally accepted actuarial practice applicable to the determination of commuted values at the calculation date. To the extent allowed by the Income Tax Act (Canada) and its Regulations, the lump sum will be paid as a retiring allowance which may allow for some or all to be deposited to a Registered Retirement Savings Plan or to a Registered Retirement Income Fund. The Employer will only be responsible for the payment of the commuted value of the additional benefits that is applicable to the credited service since October 30, 1993 and that was accrued while a member...
