Public Accounts Committee on Dec. 14th, 2011

[RAdm Andrew Smith]

Since the plan was implemented in March 2007, we have continually evaluated this issue and have hired staff along the way. That is something we continually evaluated in order to determine, in light of the number of hours required to process each file, whether we should adjust the number of employees. We do that every day on an ongoing basis.

Right now, we are determining whether we should hire 50 people. That is something we have not yet found an answer to, but we are looking at that option.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Thank you.

[VAdm Bruce Donaldson]

Also, I believe that we need three to six months to train new members of the team. Every new employee is a huge investment. There must be a balance there.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

For the time being, you are not discarding the possibility of hiring other people, based on the results of your assessment?

[RAdm Andrew Smith]

Yes, that is still a possibility.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Thank you.

You have told us a lot about what you did to fix the shortcomings highlighted in the report. What challenges remain to be overcome? What recommendations from the auditor general's report must still be implemented? We know what you have done, but what must you continue to do? What challenges remain to be able to reach maximum efficiency?

[RAdm Andrew Smith]

There are two things, in my opinion. First, we must continue to produce a performance report to ensure that we are transparent.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

What do you mean by “performance report”?

[RAdm Andrew Smith]

We must measure our performance and openly and transparently communicate that.

Furthermore, I think that it is still a challenge to communicate efficiently and regularly with our reservists.

In my opinion, those are the two things we should continue to focus on.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

In your opinion, there are improvements to be made, related to those two points.

[RAdm Andrew Smith]

Absolutely.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

I do not know if anyone wants to add anything. Mr. Berthelette could perhaps comment on the recommendations of the report that he does not think have been implemented yet.

[Jerome Berthelette]

Mr. Chair, I'm not really in a position to be able to answer the question because we've not actually audited the action plan. We have a copy of the action plan, which we appreciate receiving, but....

audit, I am not able to comment.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Thank you.

[VAdm Bruce Donaldson]

I believe that we have addressed, in almost every respect, the observations of the Auditor General. But clearly, there are continuing areas, as the plan and the implementation evolve, that we are tracking as well. Communication is clearly one of those. Whereas, I think in large respect, we have addressed the concerns expressed in the audit, we are tracking those areas to address issues as they emerge as we move forward. So when we say that we are continuing to deal with communication issues and reporting issues, the whole challenge continues to evolve and we're trying to evolve our processes and our solutions with it.

[The Chair, NDP, David Christopherson]

Thank you. The time has expired.

Mr. Dreeshen, you have the floor, sir.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much, Mr. Chair.

Thank you, gentlemen, for being here today.

There are a couple of things, actually, that I was looking at. I know the AG report talked about this particular pension plan being a rare and specialized undertaking, and I think we have a feel for that. I believe what Mr. Grandmaison has gone through, the list of different types of things required to actually fulfill the needs of the individuals, is extremely important.

One of the things I'd like to get some information on is just how long it would take, usually, when you're serving in the reserve force to reach required service levels, and if there are other factors that are taken into account.

I'm not sure who would care to answer that question.

[Dave Grandmaison]

To qualify for the pension plan, a reservist must work for two years. But to get an immediate pension, they would have to work for 25 years. If they retired after the two years, before four years they could get a return of contributions. After the four years, the pension plan is vested. They can elect to transfer value options, so if they become a public servant or joined the RCMP, etc., their plan is portable to that other entity. They could elect receive a deferred annuity of they've earned at age 60, or they could get what's called a reduced annuity once they hit age 50. It all depends on when they leave the plan, how many years they've worked, and what value they've earned. There are multiple combinations.

[Earl Dreeshen, Conservative, Red Deer, AB]

What type of interest rate is there usually on that annuity you're looking at? Do you have a general range?

[Dave Grandmaison]

I don't believe I have that.

[Earl Dreeshen, Conservative, Red Deer, AB]

All right, then. I'll go on to my next question.

I believe the Auditor General had spoken about the need to communicate the pension plan, and there was some discussion earlier with regard to a website and so on. I guess what I'm looking at is this. For those who are trying to decide and who wonder if the buyback is a requirement, or for those who have made an application, what types of things are important to make it easier so they have a little bit more upfront information? I'm just wondering whether what you said was on the website was helping you in any way to speed some of that up?

[RAdm Andrew Smith]

That's a great question.

This is based on some of the lessons learned that we experienced after the coming into force...which I think validates the decision to go forward on March 1, 2007. At the time it was introduced, there was an online calculator that people could use to get an appreciation of the buyback liability, and pension benefits, but it wasn't really reflective of the part-time nature of reserve force service. Since that time, there have been some really heroic internal efforts by the staff to put in place an online calculator that allows people to put in their service and their rates of pay and what not, which they can do themselves, to get a better appreciation of where they are and what that means, i.e., how much of a payback liability they might have, subject to confirmation obviously.

[Earl Dreeshen, Conservative, Red Deer, AB]

I think, too, when I look at exhibit 3.2 from the report, there are a number of different aspects to it. I can get down to where it describes pre-authorized debit payments being started so that reservists can begin paying for pension buybacks, with the final amounts pending the files' completion. I think that's another aspect of it. I assume that is coming through because of the base information they have given, or perhaps it might have to do with the time that it's been computerized versus the paper-trail aspect of it. I wonder if you could comment on how that works, and what one can expect.

There's one last part, because I know I'll probably run out of time. Does trying to make that happen, on this interim basis for some of these files, slow down the overall process as well?

[Dave Grandmaison]

That's part of the process before it actually gets to the buyback. All members must gather the documents. My staff help them do that. They then input it, as the admiral said, into the calculator. From there, there is a very high-level estimate of what they will get and how much it will cost. They then take that printout or report, whatever they happen to have, and come back to my staff. They start the monthly deposits saying, “The calculator said I should pay $500 a month for the next 20 years”. We start their banking information. From there, once we get to the priority system--and I mentioned the priority one, two, three, and four system to another member of the committee--that's when we get to their files. But they've already used the calculator and know roughly what they're going to get; they know roughly what it's going to cost and they've started to pay for it.

[The Chair, NDP, David Christopherson]

Thanks.

Your time has expired, Mr. Dreeshen. Thank you.

We've concluded our rounds. I would like to make a couple of comments, though, before we totally conclude. I must say that--