APEX SUPPLEMENTARY PENSION PLAN

Notes to the Financial Statements

Year ended December 31, 2022

10. Capital risk management:

The main objective of the Plan is to provide Plan members with supplemental retirement benefits. To achieve this objective and meet the pension obligations of the Plan, it must sustain a certain level of net assets available for benefits.

The Plan seeks to fulfill its pension obligations by adhering to a funding policy which guides the actions of the Board of Governors based on the Plan’s funding level. To ensure that the assets of the Plan are prudently invested, the Board of Governors also endeavours to economically design an investment structure whereby its assets are allocated to optimize the risk/reward relationship of the excess return over going concern liabilities. This investment structure is reflected in the Plan’s Statement of Investment Policy and Goals (the "SIP&G") which is reviewed annually by the Plan’s Trustees. As at December 31, 2022 and 2021, the Plan is in compliance with its SIP&G.

The Plan is required to file audited financial statements with the Government of Alberta, Ministry of Finance within 180 days after the Plan year end.

11. Financial instruments:

(a) Fair value:

The fair values of investments are determined as described in note 3(e). The fair values of other financial assets and liabilities, such as cash, accounts receivable, contributions receivable and accounts payable and accrued liabilities approximate their carrying values due to the short-term nature of these financial instruments.

Fair value measurements recognized in the statement of net assets available for benefits are categorized into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date.

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table details the classification of investments in the fair value hierarchy.

During the year ended December 31, 2022, $1,310,019 was transferred from level 2 to level 3 as a result of rebalancing the investment portfolio per internal policies.