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2002 Annual Report

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Towers Perrin

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.