Why create a Trust?

The decision to establish the CWBR Trust was prompted by the federal government’s decision to privatize the CWB by 2017. In order to ensure the sale, the government needed to find a way to improve the balance sheet position of the CWB. This necessary step included removing the long-term accrued liabilities of the CWB retiree benefits plan.

The federal government provided a one-time payment of just over $55-million to fund this employee life and health trust or “ELHT”, which is intended to ensure ongoing coverage and protection for CWB retirees in the plan. This amount—determined by an independent actuary – was deemed appropriate to cover the expected future cost of potential benefit claims under the plan (future liabilities). The amount was calculated using estimates for things such as future healthcare costs, life expectancy, investment returns, administrative expenses, and potential adverse events that may occur in the future.

The ELHT provisions of the Income Tax Act specify conditions that must be met by the CWBR Trust, including those eligible to participate and the type of benefits it can provide. The Trustees are obligated to ensure that the CWBR Trust always complies with the ELHT provisions. As such, benefits provided and eligibility to participate in the plan may be modified by the Trustees to comply with the ELHT provisions of the Income Tax Act as they may be amended.