Metropolitan Toronto Police Benefit Fund

1998 Pensioner Increase, Amendment to By-Law No. 181-81

 The Corporate Services Committee recommends:

 (1)the adoption of the Recommendations of the Board of Trustees of the Metropolitan Toronto Police Benefit Fund, embodied in the communication (April 26, 1998) from the Interim Board Secretary, Metropolitan Toronto Police Benefit Fund, with the exception of all benefit improvements relating to active members of the Metropolitan Toronto Police Benefit Fund; and

 (2)the amendment of By-law No. 181-81 in accordance with the draft amending By-law referred to in the aforementioned communication from the Interim Board Secretary, Metropolitan Toronto Police Benefit Fund.

 The Corporate Services Committee reports, for the information of Council, having directed that the proposed changes respecting the Metropolitan Toronto Police Benefit Fund be forwarded, in writing, to the Toronto Police Pensioners Association for their information; and that they be advised of the date that this matter will be considered by City Council.

 The Corporate Services Committee submits the following communication (April 26, 1998) from the Interim Board Secretary, Metropolitan Toronto Police Benefit Fund:

 The Board of Trustees of the Metropolitan Toronto Police Benefit Fund on April 24, 1998, had before it the Actuarial Report and Cost Certificate for the Fund as at December 31, 1997, submitted by Mr. Robert Camp, Senior Vice-President, Sedgwick Noble Lowndes, and setting out full details of the Fund=s financial position on the valuation date, making recommendations as to the utilization of the experience gains, and illustrating the effect of the recommendations on the funded position.

 The Board of Trustees also had before it a report dated April 21, 1998, from the Chief Financial Officer and Treasurer submitting comments on the aforementioned Actuarial Report and Cost Certificate; advising that the Actuary=s recommendations to significantly improve the benefits of the Metro pension plans require consultation with and endorsement by employers and employee groups; and recommending that:

 (i)a consultation process be commenced by means of the recommendations of the Actuary relating to changes to the Metropolitan Toronto Pension Plan and the Metropolitan Toronto Police Benefit Fund, other than the cost-of-living increase to pensions, being referred to the Corporate Services Committee and the Toronto Police Services Board, respectively and to the appropriate corresponding employee bargaining units for comment; and

 (ii)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

 Mr. Robert Camp, Senior Vice-President, Sedgwick Noble Lowndes, made a presentation to the Board of Trustees in connection with the foregoing matter and filed a copy of his presentation with respect thereto.

 The Board of Trustees recommended to the Corporate Services Committee that:

 (1)effective July 1, 1998:

 (a)an increase of 0.7 percent be granted on pensions to pensioners on benefit for more than one year, and a proportionate increase of .058 percent for each month of pension payment made in 1997 be granted for pensioners who retired during 1997;

 (b)current member and employer contributions be reduced by 2 percent of contributory earnings for the five-year period ending June 30, 2003;

 (c)the basic percentage for spousal survivor pensions be increased to 66 2/3 percent from 60 percent for all active and retired members;

 (d)in addition to the pensioner increases provided for in Recommendation No. (1)(a), all current spousal benefits be increased by one-ninth if the spouse is in receipt of a 60 percent spousal benefit and, further, if the spouse is in receipt of a 65 percent, 70 percent or 75 percent optional spousal benefit that the pensions be recalculated using revised reduction factors to reflect the increase in the basic spousal benefit to 66 2/3 percent from 60 percent;

 (e)the spousal benefit for post-retirement marriage be amended to one-thirty-sixth of the normal pension of the deceased member per month of marriage, to a maximum of 66 2/3 percent; and

 (f)the benefit being paid to pensioner members who have elected increased spousal benefits, be adjusted using the revised reduction factors to reflect the increase in spousal benefits to 66 2/3 percent; and

 (2)the authority be granted for the introduction in Council of the necessary Bills to give effect to Recommendation No. (1).

 The Board of Trustees also:

 (i)requested the City Solicitor to draft the appropriate amending by-law respecting Recommendation No. (1), and submit such draft by-law directly to the Corporate Services Committee for consideration with this matter; and

 (ii)received the aforementioned report dated April 21, 1998 from the Chief Financial Officer and Treasurer.

 The Corporate Services Committee also submits the following communication (May 22, 1998) from the Interim Board Secretary, Board of Trustees of the Metropolitan Toronto Police Benefit Fund:

 The Board of Trustees of the Metropolitan Toronto Police Benefit Fund on May 22, 1998, had before it, for information, a report dated May 12, 1998, addressed to the Corporate Services Committee from the Chief Financial Officer and Treasurer, headed AActuarial Valuation Results - Metropolitan Toronto Pension Plan and the Metropolitan Toronto Police Benefit Fund,@ commenting on the recommendations of the Actuary relating to the actuarial valuation as at December 31, 1997; and recommending that:

 (1)the Corporate Services Committee endorse that the Chief Financial Officer and Treasurer approach the Boards of Trustees of the Metropolitan Toronto Pension Plan and the Metropolitan Toronto Police Benefit Fund and to the governing bodies of the City of Toronto Civic Employees= Pension and Benefit Fund, the City of Toronto Fire Department Superannuation and Benefit Fund and the City of York Employees= Pension and Benefit Fund with the view that the pension funds should bear the total administration costs of the plans in order to allocate actuarial gains more equitably; and

 (2)the Chief Financial Officer and Treasurer, in conjunction with the Executive Director of Human Resources, be requested to report on the cost and funding of benefit improvements, similar to those proposed by the Boards of Trustees of the Metropolitan Toronto Pension Plan and the Metropolitan Toronto Police Benefit Fund, for the City of Toronto Civic Employees= Pension and Benefit Fund, the City of Toronto Fire Department Superannuation and Benefit Fund and the City of York Employees= Pension and Benefit Fund.

 The Board of Trustees decided to request the Corporate Services Committee and Council that, whatever action is taken on the said Recommendations of the Chief Financial Officer and Treasurer, the adoption of the following Recommendations embodied in the communication dated April 26, 1998 from the Interim Board Secretary, Metropolitan Toronto Police Benefit Fund, be proceeded with:

 (i)Recommendation No. (1) (a), viz.:

 " (1)effective July 1, 1998:

 (a)an increase of 0.7 percent be granted on pensions to pensioners on benefit for more than one year, and a proportionate increase of .058 percent for each month of pension payment made in 1997 be granted for pensioners who retired during 1997;"; and

 (ii)Recommendations Nos. (1) (c) to (f), viz.:

 " (1)effective July 1, 1998:

 (c)the basic percentage for spousal survivor pensions be increased to 66 2/3 percent from 60 percent for all active and retired members;

 (d)in addition to the pensioner increases provided for in Recommendation No. (1)(a), all current spousal benefits be increased by one-ninth if the spouse is in receipt of a 60 percent spousal benefit and, further, if the spouse is in receipt of a 65 percent, 70 percent or 75 percent optional spousal benefit that the pensions be recalculated using revised reduction factors to reflect the increase in the basic spousal benefit to 66 2/3 percent from 60 percent;

 (e)the spousal benefit for post-retirement marriage be amended to one-thirty-sixth of the normal pension of the deceased member per month of marriage, to a maximum of 66 2/3 percent; and

 (f)the benefit being paid to pensioner members who have elected increased spousal benefits, be adjusted using the revised reduction factors to reflect the increase in spousal benefits to 66 2/3 percent;",

 it being the opinion of the Board that the proposed spousal benefit increase relating to active members is not an active-member improvement.

 The Board of Trustees reports, for the information of the Corporate Services Committee and Council, having initiated a consultation process with the Actuary, City officials, and representatives of the Toronto Police Association, the Toronto Police Services Board and the Senior Officers' Organization, respecting, amongst other things, benefit improvements to the Fund and the assumption by the Fund of the total costs of its administration.

 The Corporate Services Committee reports, for the information of Council, also having had before it the following communications:

 (i)(May 12, 1998) from Mr. D. Brown, Legal Department, forwarding a copy of the draft amending by-law to amend further By-law No. 181-81 as requested by the Board of Trustees of the Metropolitan Toronto Police Benefit Fund on April 24, 1998.

 (ii)(May 15, 1998) from Mr. Norman Gardner, Chair, Toronto Police Services Board, noting that the Police Services Board has concerns with the Benefit Fund Surplus being utilized in this manner as the Toronto Police Association has submitted bargaining proposals for the year 1998 on pension issues other that those referred to in the letter dated April 26, 1998.

 (iii)(May 14, 1998) from Mr. A. Christofaro, President, Toronto Police Senior Officers Organization, advising that the Organization does not have any concerns with respect to the improvements recommended for the Police Benefit Fund Plan.

 D R A F T

 CITY OF TORONTO

 BY-LAW No. -1998

 To amend further By-law No. 181-81

of the former Municipality of Metropolitan Toronto

respecting pensions and other benefits.

 The Council of the City of Toronto HEREBY ENACTS as follows:

 1.By-law No. 149-97 of the former Municipality of Metropolitan Toronto, a by-law "To amend further By-law No. 181-81 respecting pensions and other benefits", is amended by striking out the words "first line of" in the first line of clause 4(11)(a) thereof.

 2.(1)Subsection 8(1) of By-law No. 181-81 of the former Municipality of Metropolitan Toronto, a by-law "To provide pensions and death benefits to members of the Metropolitan Police Force", as heretofore amended, is further amended by striking out the first word and substituting therefor "Subject to the contribution reduction provided for by subsection (1.1) and subject".

 (2)Section 8 of said By-law No. 181-81 is further amended by adding thereto the following subsection:

 "Contribution

Reduction

1998 - 2003

8.(1.1)During the period from and including July 1, 1998, to and including June 30, 2003, subsection (1) shall be interpreted as if it specified a contributory rate of 62 per cent. rather than the rate of 82 per cent. provided for therein."

 3.(1)Clause 17(3)(a) of said By-law No. 181-81, as such clause was re-enacted by By-law No. 66-94 of the former Municipality of Metropolitan Toronto and amended by By-law No. 149-97 of that former municipality, is further amended by

 (a)striking out the text "60 per cent." in the third line of item (i)(A) thereof and substituting therefor "66b per cent.";

 (b)striking out that part of item (i)(B) thereof following the text "subsisted," appearing in the third line thereof and substituting therefor "one-thirty-sixth (1/36th) of a pension calculated in the manner prescribed in section 11, to a maximum of 66b per cent."; and

 (c)striking out the text "60 per cent." in the second line of subclause  (ii) thereof and substituting therefor "66b per cent.".

 (2)Clause 17(3)(b) of said By-law No. 181-81, as such clause was re-enacted by said By-law No. 66-94 (as clause 17(3a)(b)) and amended by said By-law No. 149-97, is further amended by striking out the text "60 per cent." where same appears in the third line of each of subclauses (i) and (ii) thereof and substituting therefor in each case "66b per cent."

 (3)Subsection 17(7) of said By-law No. 181-81 as such subsection was enacted by By-law No. 86-89 of the former Municipality of Metropolitan Toronto and amended by By-law No. 95-96 of that former municipality, is further amended by striking out the text "65%," where same appears therein.

 (4)Clauses 17a(3)(a) and (b) of said By-law No. 181-81, as such clauses were enacted by By-law No. 17-86 of the former Municipality of Metropolitan Toronto and amended by said By-law No. 66-94, are further amended by striking out the text "60 per cent." where same appears in the third line of each thereof and substituting therefor in each case "66b per cent.";

 (5)Subsection 17b(3) of said By-law No. 181-81, as such subsection was enacted by said By-law No. 17-86 and amended by said By-law No. 66-94, is further amended by striking out the text "60 per cent." in the second line thereof and substituting therefor "66b per cent."

 (6)Subsection 17c(3) of said By-law No. 181-81, as such subsection was enacted by said By-law No. 66-94 is amended by striking out striking out that part thereof following the text "subsisted," appearing in the third line thereof to and including the text "60%" appearing in the fifth line thereof, and substituting therefor "one-thirty-sixth (1/36th) of a pension calculated in the manner prescribed in section 11, to a maximum of 66b per cent."

 (7)Clause 23(1)(b) of said By-law No. 181-81, as such clause was amended by By-law No. 156-96 of the former Municipality of Metropolitan Toronto, is further amended by striking out the text "60%" at the end thereof and substituting therefor "66b per cent."

 (8)Clause 23(1)(c) of said By-law No. 181-81, as such clause was re-enacted by said By-law No. 156-96, is amended by striking out the text "60%" in the third line of subclause (i) thereof and substituting therefor "66b per cent."

 (9)Section 32i of said By-law No. 181-81, as such section was enacted by By-law No. 82-88 of the former Municipality of Metropolitan Toronto and amended by By-law No.83-92 of that former municipality, is further amended by

 (a)striking out the text "60 per cent" in the first line of clause (b) thereof and substituting therefor "66b per cent."; and

 (b)striking out the text "32m" in the second line of subsection (2) thereof and substituting therefor "32s".

 4.(1)Said By-law No. 181-81 is further amended by adding thereto the following section:

 "General

Pensioner

Increase

(1998)

32s.(1)Save and except for those pensions increased pursuant to subsection (2), the amount of pension payable under this By-law is hereby increased by 0.7 per cent effective the 1^st day of July, 1998, in respect of

 (a)each pensioner in receipt of a pension; and

 (b)each member entitled to a deferred pension under section 18 or a predecessor thereof,

 on or before the 31^st day of December, 1997.

  Adjusted

Pensioner

Increases

(1998)

(2)Effective the 1^st day of July, 1998, the amount of pension

 (a)payable

 (i)to each member in receipt of a pension; and

 (ii)to each pensioner under section 17 or a predecessor thereof in respect of a deceased member who died prior to retirement; and

 which commenced on a date shown in Column I;

 (b)payable to each pensioner under section 17 in respect of a deceased pensioner member whose retirement commenced on a date shown in Column I;

 (c)payable to each member entitled to a deferred pension under section 18 as a result of termination of employment which took place after December 1, 1996, on a date shown in Column I, treating any such termination which occurred on any day of a month other than the first as if it had occurred on the first day of the next following month,

 is hereby increased by the percentage set out opposite such date in Column II:

  Column IColumn II

 January 1, 19970.700 per cent.

February 1, 19970.642 per cent.

March 1, 19970.583 per cent.

 April 1, 19970.525 per cent.

May 1, 19970.467 per cent.

June 1, 19970.408 per cent.

 July 1, 19970.350 per cent.

August 1, 19970.292 per cent.

September 1, 19970.233 per cent.

 October 1, 19970.175 per cent.

November 1, 19970.117 per cent.

December 1, 19970.058 per cent."

 (2)For the purposes of subsection (1), sections 3 and 5 shall be deemed to have come into force immediately prior to the increases called for by the new section 32s.

 5.Effective July 1, 1998,

 (a)the reduced benefit then being received by any pensioner member; and

 (b)the increased benefit then being received by the widow(er) of any member,

 pursuant to subsection 17(9) of said By-law No. 181-81 shall in each case be modified so as to take proper account. in the manner calculated by the actuary, the increase in the basic survivor benefit from 60 per cent. to 66b per cent. resulting from the operation of section 3 of this by-law.

 6.(1)Subject to subsections (2) and (3), this by-law shall come into force on the date of its enactment and passing.

 (2)Section 1 shall be deemed to have come into force on the 1^st day of January, 1992.

 (3)Sections 2 and 3 shall come into force on the 1^st day of July, 1998.

 ENACTED AND PASSED by an affirmative vote of at least two-thirds of the Members of Council present and voting this day of June, A.D. 1998.

    MayorCity Clerk.

 (A copy of:

 (1) the document, entitled AThe Municipality of Metropolitan Toronto Actuarial Report and Cost Certificate with Respect to the Metropolitan Toronto Police Benefit Fund as at December 31, 1997", prepared by Sedgwick Noble Lowndes, April, 1998; and

 (2)the report (April 21, 1998) from the Chief Financial Officer and Treasurer, entitled AActuarial Valuation Results@,

which was attached to the foregoing communication, was forwarded to all Members of Council with the May 25, 1998, agenda of the Corporate Services Committee, and a copy thereof is also on file in the office of the City Clerk.)