34. Towers Perrin was appointed Investment Consultant to the Trust Fund pursuant
to Orders of the Courts. Attached hereto and marked as Schedule
"K" is a letter dated May 8, 2002 from Towers Perrin summarizing
their activities for the fiscal year ended March 31, 2002. Attached and marked
as Schedule "L" is a copy of the
Trust Fund Investment Summary from the Annual Report of Towers Perrin, which
has been provided to the Joint Committee.
35. The Courts approved an annual budget for Towers Perrin in the amount of
$56,000.00. The actual expenses of Towers Perrin for the year ended March
31, 2002 were the budgeted amount. Towers Perrin has proposed the same budget
for the year commencing April 1, 2002 and ending March 31, 2003 of $56,000.00
plus GST. The proposed budget of Towers Perrin is set out in Schedule
"K".
36. Towers Perrin has discussed with the Joint Committee
the proposed terms under which it is prepared to continue
as Investment Consultant to the Trust Fund. The terms sought
by Towers Perrin would, in effect, limit the potential liability
of Towers Perrin to an amount equal to or less than the
fees received from the Trust fund. The Joint Committee is
not prepared to recommend such terms to the Courts.
37. Independent of the seeking of new contractual terms,
a separate issue has arisen as to the utility of the role
performed by Towers Perrin in light of the ongoing nature
of the Trust Fund. In particular, the Joint Committee has
looked more to Jack Levi, of Eckler Partners for information
on the matching of investments to actuarial liabilities.
The reports of Towers Perrin, although informative, have
not added much to the information, which the Joint Committee
has already been receiving from the Trustee and the Investment
Manager.
38. The Joint Committee has discussed with Eckler Partners
its absorption of the role of Towers Perrin relating to
the review of investments. Eckler Partners has proposed
to take on this retainer for an annual fee of $20,000.00
in addition to the actuarial budget for Eckler Partners,
which is referred to below at paragraph 40.
39. The Joint Committee recommends an Order of the court
removing Towers Perrin as the Investment Consultant to the
Trust Fund. If and when advice is required by the Joint
Committee in respect of investments, such advice will be
sought either through the direction of Eckler Partners or
by special application to the courts for approval of the
retainer of an outside expert.
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