1. 1
De-risk, c’est de rigueur
Lucie Dutil
Vice-President, Human Resources
Bell Canada

2. 2
Pension has Bell senior management’s attention
• One of the largest and oldest pension plan in Canada, Bell’s plan is significant in relation to
its core business and is an important benefit for employees
o Regulated by federal authorities
o Defined benefit assets total $13B as of December 31st, 2012
o Defined contribution assets total $280M as of Dec 31st, 2012
o 31,000 active employees, 10,000 deferred vested and 33,000 retirees participate in Bell pension plans
o The plan is funded at 84% on a solvency basis as of the end of last year
• As early as 2005 Bell started to seek avenue to stabilize cost and secure pension promise
• Although somewhat buffered, the 2008 financial crisis impacted Bell’s solvency ratio by 24%
• Elements of our pension strategy includes:
o Better control on company funding and reduction of contribution volatility in a disciplined manner
o Look and investigate all the levers available
• Benefit design
• Funding policy
• Investment policy
• Financial alternatives
o Recognize that circumstances change and economic environment is in constant evolution
o Remain flexible allowing for management discretion on all levers

3. 3
Managing risk in a disciplined manner
• Bell undertook a review of its benefit plans
o Closed defined benefit plans and implemented defined contribution plans for all new employees
o Eliminated post-retirement benefits over 10 years for future retirees
o Eliminated retirement allowances
• Option of making advance funding is looked at annually
o More than $2.7B has been made in advance contribution funding in 2009, 2010, 2011 and 2012
• Investment strategy has been modified to better align with liability
o Extension of duration of bond portfolio to better match pension liabilities duration
o Current fund assets have been allocated into a Low Risk Portfolio and a Return Generating Portfolio
o Change in asset allocation of more than 20% from Return Generating to Low Risk portfolio over the past
five years

4. 4
Moving to a Financial Risk Management (FRM) framework
Typical portfolio structure
BondsUniverse CanadianEquity
USEquity InternationalEquity
MoneyMarket
FRM investment framework
ReturnGeneratingPortfolio
Low Risk Portfolio
• Indicative of Bell Fund prior to March 2009
• Traditional pension fund managers seek returns
in each asset category which are higher than the
associated benchmark
• Traditionally have higher weights in riskier asset
categories as these categories have a greater
risk premium and added value potential
FRM investment framework is built on the premise
risk is taken by deviating from the liability proxy and
that the fund return needs to outperform the liability
proxy in order to maintain or improve the funded
status of the plan
As we proceed with the FRM framework, we
continue to better align our portfolio with the
liabilities and therefore modified our investment
framework to enhance our monitoring and
measurement capabilities

5. 5
Moving to a Financial Risk Management framework
• A new investment framework has been implemented to de-risk the pension plan over a
period of time in a disciplined and systematic fashion
• The framework is built around the solvency deficit/surplus in line with the objective to
reduce contribution volatility
• Assets are moved from the Return Generating Portfolio to the Low Risk Portfolio as the
solvency position improves

6. 6
Monitoring to maintain discipline and ensures timely actions
Monitoring ensures the strategy responds to changes in the market and incorporates
ongoing pension liability dynamics:
• How we monitor?
o Asset has been split into two segment :Return generating and Low risk
o Liability has been allocated to each portfolio segment
• What is monitored ?
o Solvency status for each segment
o Performance of the investment strategy of each segment
o Investment performance of the low risk against the asset-based liability benchmark
• DAILY REPORT:
o Track the solvency ratio against our glide path
• MONTHLY REPORT:
o Measure asset performance vs. liability performance
o Allow monitoring of our investment strategy vs. investment benchmark
o Allow to monitor our de-risking strategy against interest rate risk

7. 7
Governance is key to Bell’s strategy and is deliberately flexible
Wide spectrum of possible models
Possible Approaches Description
A. Interactive Specify a series of broad rules/triggers which, once satisfied, action a meeting of the main
stakeholders to discuss and agree to the next steps
B. Mechanistic Specify a series of detailed rules (and triggers) which, once satisfied, action automatic (or
mechanistic) switches between and within the Return Generating Portfolio and the Low
Risk Portfolio
• Triggers are agreed upon by
the Pension Fund
Committee (PFC)
– Solvency ratio triggers
– Review annually
• Triggers are monitored on a
daily basis by Bell’s
actuaries
• Trigger Monitoring1
• Actuaries bring updated
indicators to Senior
management
• Senior management can
decide to act or not
• Decision reported to the
next PFC
Trigger Breach2
• If decided to act, asset is
being transferred as per
glide path from Return
Generating portfolio into
the Low risk portfolio
Actions3
• Impact of changes is
presented to the PFC
Reporting4
Our approach

8. 8
Bell is a market leader in pension risk management strategy
END POINT:
Target Risk
Level
Plan design
changes
Bond portfolio
changes
Funding
strategy
adjustments
De-risking
strategy
sophistication
De-risking &
“Lock-Down”
strategies
Closed DB to
new entrants
in 2005
Increased
bond
portfolio
duration from
6 to 11 over
several
years
Increased
bond
allocation:
Fixed
income
changed
from 40% of
assets in
2008 to 60%
of assets in
2013
Before each
year end,
assess if
additional
advance
contribution is
desired
($2.7B made
since 2009)
Establish
guidelines on
deficit funding
decision
process
Daily tracking of
financial situation
Split portfolio by
Return
Generating (RG)
and Low Risk (LR)
to better align
investment
strategy with
liability
Structure a plan
to progressively
shift to ultimate
asset mix with
acceptable risk
level (glide path)
Keep abreast
of emerging
initiatives and
legislation
changes
STARTING
POINT
BellInitiatives
Typical de-risking path