January 1 to December 31, 2016

In accordance with the NJC By-Laws, the undersigned submit this annual report regarding the performance and the administration of the Disability Insurance Plan during the period of January 1 to December 31, 2016.


Monique Paquin

Employer Side Members

Dan Couture, Canada Revenue Agency
Claude Houde, Department of Foreign Affairs, Trade and Development
Catherine Monette, Treasury Board Secretariat
Sandi Wright, Public Services and Procurement Canada

Bargaining Agent Side Members

Sandra Guttmann, Association of Justice Counsel
James Infantino, Public Service Alliance of Canada
John Staric, Professional Institute of the Public Service of Canada
Tony Tilley, Public Service Alliance of Canada


The Disability Insurance Plan Board of Management (the “Board”) is pleased to provide this report on the administration of the Public Service Disability Insurance Plan (the “DI Plan”), its financial performance and the activities of the Board for the period of January 1 to December 31, 2016.

Plan Overview

The DI Plan provides income replacement for Plan members during periods of long-term disability for up to 70% of insured earnings. Employees who meet the criteria of total disability to perform the duties of their regular employment become eligible for long-term DI benefits at the expiration of the longer of paid sick leave or the 13 week elimination period for the DI Plan. Employees receive income replacement payments as well as disability case management and rehabilitation services from the plan insurer, Sun Life Financial. These payments are offset by payments that employees may be eligible for from other disability benefit programs.

The DI Plan is a group insurance policy underwritten and administered by Sun Life Assurance Company of Canada.


As of the end of 2016 the DI Plan had $2.197B in claims reserves, 218,000 Plan members (up from 217,700 members at the end of 2015), and 11,343 members on benefits. Total benefits paid out by the Plan during the 2016 year amounted to $307.9M, compared to $305.8M in 2015.

The overall result of the 2016 financial experience for the Plan at year end was positive, with an in-year gain of $9.8M. At December 31, 2016, the balances in the Claims Fluctuation Reserve (CFR) and the Surplus Account were $89.3M and $220.6M respectively for a total Plan Surplus of $309.9M. This compares to a $300.1M total Plan Surplus at December 31, 2015. The CFR, a fund that is used to cover emerging in-year deficits, was fully funded at the maximum of 25% of annual premiums.

The premium income increased slightly from a total of $356.1M in 2015 to $357.1M in 2016.

The disability incidence rate decreased from 12.3 approved claims per thousand plan members in 2015 to 10.6 in 2016. The rate of termination of approved claims in payment slightly decreased from 2.30 terminated claims per 10 claims in payment in 2015 to 2.29 terminated claims in 2016.

Overall, the financial experience in 2016 can be summarized as a somewhat good but uncommon financial year in part due to the need for a special IBNR to account for claims expected but not yet received due to the complications of the implementation of Phoenix. Some factors which contributed to this year’s result are the decrease in the claims incidence, the relatively good termination experience, combined with good earned rate and plan credited rate on the plan assets (including the surplus), and finally a low inflation environment which has kept the COLA relatively low again this year. All of these have contributed to generate a modest in-year plan gain.

In accordance with the premium guidelines, the actual surplus level was at the end of 2016 at an acceptable level, between the target and the maximum. However, the full impact of the implementation of Phoenix, the new public service compensation system, and the outcome of recent collective bargaining on benefit payments has yet to be ascertained. As such, the Board of Management accepted the recommendation from the Sun Life actuarial analysis that there be no change to the premium rate for 2017. The Board of Management, in its role of overseeing the sound financial management of the Plan, will continue as always to monitor the trends in plan experience in the coming year, keeping a watchful eye on the Plan’s financial position going forward.

In addition to its accountability to oversee the financial results of the Plan, the Board continued during the year to work actively with the Plan Administrator (Sun Life) and the Plan Sponsor (Treasury Board Secretariat) to strengthen and improve the effectiveness of the administration of the Plan. Some to the key activities in this area are outlined below.

The Board was briefed by Sun Life at its January meeting on the results of the annual claimant survey conducted during 2015. The overall positive satisfaction rate (scoring 8 or higher on a scale of 10) of plan members surveyed on their claim experience was 67%, compared to 71% in 2014, and 65% in 2013. As in recent years, the highest ratings received were for “actively involved in establishing return to work goals” and “knowledge of the case manager”; while the lowest ratings continue to be regarding the application process and instructions around claim submission. Sun Life is working in conjunction with TBS toward improving claims forms, member communication, decisions turnaround time, as well as providing additional training for case managers. These measures are expected to improve the plan members' experience with the claims process.

The Board requested and received presentations from Sun Life on several topics. These included the Learning and Development Program for its Abilities Case Managers, the adjudication process surrounding claims related to substance abuse, the Claims Decisions Quality Assurance Program, the use of surveillance in claims adjudication, and improvements to the Attending Physician Statements.

Additionally, the Board received a highly informative presentation from a Sun Life Senior Mental Health Consultant (SMHC) on the role and impact of this new function on the adjudication of claims. SMHCs are highly-trained, experienced, registered Psychologists located throughout Canada and their role is to coach the regional disability management team; optimize the duration of complex mental health claims; support better workplace mental health; ensure high quality case management; and to contribute to the ongoing development of the Case Management Team. SMHC’s provide input on return to work planning and accommodations, provide education and training on mental health illnesses and rehabilitation, and ensure that Abilities Case Managers have the skills and knowledge necessary to communicate effectively with Plan members regarding their condition.

Continuing its ongoing dialogue with the Plan Administrator, the Board expressed concerns to Sun Life regarding its recent practice of charging fees to plan members for copies of their claim files. Sun Life representatives explained that this practice was implemented as a result of an internal review which uncovered inconsistencies in that regard across Sun Life’s entire block of business. However, after further review, Sun Life will no longer charge such fees to members going forward.

Board Membership 

The Board met seven (7) times during the period covered by this report, devoting much of its time to hearing appeal cases and overseeing the administration and financial experience of the DI Plan.

Over the course of the year there were several changes to the Board of Management’s membership. Catherine Monette, Treasury Board Secretariat, replaced William Leffler at the beginning of the year; Sandra Guttmann, Association of Justice Counsel, left the Board mid-June; and Sandi Wright, Public Service and Procurement Canada, was appointed in October 2016. Lastly, Monique Paquin was appointed as Chairperson in October 2016, replacing Paul Burkholder, who served as Chair with dedication for 4 years.

The members of the Board at the end of the 2016 reporting period were:

Financial and Administrative Oversight

The Board held its annual meeting in June 2016 with the Plan insurer to review the year-end financial results for 2015 and to receive updates on the status of the Plan. Highlights are presented in the following charts.


The Board reviewed the premium rating analysis at its November meeting. This timing allows for factoring into the analysis, Sun Life’s fall update of the Reserves Basis and for considering more substantial current year plan experience. In addition, this new approach supports timely implementation of any required premium rate adjustment recommendation.


Summary of Annual Financial Results


Premium Income
($ Million)

Interest Income
($ Million)

Paid Claims*
($ Million)

Total Plan Expenditures*
($ Million)

In-year gain/loss
($ Million)



















* Total plan expenditures are calculated as paid claims, expenses and premium taxes, as well as the change in the claims reserves held at the beginning of the year as compared to the end of the year. (Note: The paid claims amount column is included in the total Plan expenditures column. The In-year gain/loss equals the Premium and Interest Income minus the Total Plan Expenditures.)

Claims Experience

The 2016 annual report prepared by the Plan insurer includes a broad overview of Plan claims data. During the 2016 calendar year there were 3,099 notified claims, a decrease of 632 or 16.9%; and 2,314 claims approved, a decrease of 364 or 13.6%. The number of claims declined during the year also decreased by 282 or 27.8% and the number of claims terminated (closed) during the year declined by 57 or 2.1%.


The statistical information for this year reflects the significant decrease (between 500 and 600 claims) in the number of notified claims in 2016, as compared to what was typically seen in recent years. Issues caused by the centralization of compensation services to Miramichi and the new Phoenix pay system resulted in delays in the receipt of fully and correctly completed claims to Sun Life. Solutions are being pursued to improve this, and the Board is closely monitoring this situation and the work of all stakeholders in resolving these anomalies.


Claims Statistics





Number of claims notified during the year




Number of claims approved during the year




Number of declined claims during the year




Number of terminated claims during the year




Total number of approved claims at year-end




Total number of pending claims at year-end




Distribution of Causes of Disability for Approval Year 2016

Cause of Disability

Per Cent









Mental Health Conditions

  • Adjustment Disorder (Grief, Separation, Etc)
  • Bipolar Affective Disorder
  • Depressive Episode/Depression
  • Generalized Anxiety
  • Post-Traumatic Stress Disorder
  • Recurrent Depressive Disorder/Depression
  • Others


  •  4.9
  •  2.5
  • 18.8
  •  4.5
  •  3.3
  •  9.4
  •  5.6

Neoplastics (Cancer)




Spine / Sacro-Iliac




Mental health conditions continued to be the most frequent causes of new disability claims approved in 2016. This continues to be the experience across other Canadian disability plans.

The distribution of causes of disability for all new claims approved in 2016 is shown in the chart above. As noted above, the most frequent cause of new approved claims were mental health conditions (49.0% of the total), as it was in 2015. The actual number of newly approved claims for this cause of disability decreased slightly from 1,311 in 2015 to 1,133 this year. Of the appeal files before the Board, 58% involved cases where mental health conditions were claimed as the primary cause of disability.

For the first time since 2013, there was an increase in neoplastic diagnoses (cancer), from 11.2% in 2015 to 13.5%.

Appeal Cases

The Board’s terms of reference include the duty to examine appeals against claims declined by the Plan insurer, making recommendations to the Plan insurer on these and in certain circumstances providing advice to the employer on practices related to disability management in departments and agencies.

The Board reviewed a total of 24 new appeal cases in 2016. The Board disagreed with Sun Life’s decision to deny benefits in 1 of those cases and found no reason to disagree with Sun Life in 23 cases.


The Board acknowledges the large number of appeals in the queue for examination. In this regard, the Board is exploring approaches with Sun Life to manage these volumes, including adding additional meetings to hear appeals.

Board Member Training

In order to build on their expertise and to stay abreast of current information and trends in the disability field, members of the Board of Management regularly participate in conferences and learning sessions held by the International Foundation of Employee Benefit Plans (IFEBP).

Two (2) members participated in the Canadian Public Sector Pensions and Benefits Conference and (1) one member participated in the 49th Annual IFEBP Canadian Employee Benefits Conference. Given the importance of the Board’s duties and good governance practices, reasonable investment in Board member skill and knowledge development will continue as an on-going priority.

Financial Reporting

The Board has reviewed the monthly and annual reports received from Sun Life and it has found that the current format continues to serve its needs and purposes.

Plan Governance

The Board of Management continues to focus on good governance in its responsibilities to oversee the administration of the DI Plan.


Over the course of 2016, the Board of Management has been very engaged with the insurer on topics and issues of interest. In the coming year, this mutually beneficial and helpful engagement will continue to be welcomed by both the Board and the insurer.

Workplan For 2017

In the coming year, the Board plans to address the following key areas through a variety of activities:

  1. Monitor and advise on DI Plan finances and operations;
  2. Monitor trends in claims processing and engage with the Plan Administrator on issues of concern to the Board;
  3. Review appeal processes to ensure timeliness of hearing appeals cases;
  4. Monitor the impact of the implementation of Phoenix, the new compensation system, on claim processing;
  5. Provide learning and development opportunities to Board members;
  6. Provide feedback, based on appeal case reviews, to TBS and other stakeholders on opportunities for improvement of the in enabling employees to return to work following absences due to disability; and
  7. Continue to monitor the results of the Plan Member survey with a view to improving services for Plan Members and explore new survey methodology.


The Board would again like to thank Dr. Raymond Aubin for providing expert medical advice during the review of appeals.

Finally, the Board would also like to express its appreciation to Sun Life for its commitment and collaboration in working with the Board. A number of constructive initiatives were undertaken over the year in the interests of supporting and communicating with Plan members and providing the Board with the knowledge and information it needed to fulfil its duties.