Metropolitan Toronto Pension Plan

1998 Pensioner Increase, Amendment to By-Law No. 15-92

 The Corporate Services Committee recommends:

 (1) the adoption of the Recommendations of the Board of Trustees of the Metropolitan Toronto Pension Plan, embodied in the following communication (April 26, 1998) from the Interim Board Secretary, Metropolitan Toronto Pension Plan; and

 (2)the amendment of By-law No. 15-92 in accordance with the draft amending By-law referred to in the aforementioned communication from the Interim Board Secretary, Metropolitan Toronto Pension Plan:

 The Board of Trustees of the Metropolitan Toronto Pension Plan on April 24, 1998, had before it the Actuarial Report and Cost Certificate for the Plan as at December 31, 1997, submitted by Mr. Robert Camp, Senior Vice-President, Sedgwick Noble Lowndes, and setting out full details of the Plan'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 Boards 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 0.058 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 2.0 percent of contributory earnings for the five-year period ending June 30, 2003;

 (c)the current early retirement factor of 85 points be reduced to 80 points for the five-year period ending June 30, 2003;

 (d)the current reduction penalty for shortfalls in the early retirement factor be reduced from 4.0 percent to 2.5 percent for the five-year period ending June 30, 2003;

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

 (f)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;

 (g)the benefit being paid to pensioner members who have elected increased spousal benefits, be adjusted using revised actuarial 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;

 (ii)requested the Chief Financial Officer and Treasurer to submit a report to the Board of Trustees for its next meeting scheduled to be held on May 22, 1998, on the costs of administering the Plan; and

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

 The Corporate Services Committee also had before it a communication (May 12, 1998) from Mr. D. Brown, Legal Department forwarding a copy of a draft amending by-law to amend further By-law No. 15-92 as requested by the Board of Trustees of the Metropolitan Toronto Pension Plan on April 24, 1998.

 D R A F T

 CITY OF TORONTO

 BY-LAW No. -1998

 To amend further By-law No. 15-92

of the former Municipality of Metropolitan Toronto

respecting pensions and other benefits.

 The Council of The Municipality of Metropolitan Toronto HEREBY ENACTS as follows:

 1.(1)Clause 1(1)(e.1) of By-law No. 15-92 of the former Municipality of Metropolitan Toronto, a by-law "To provide pensions for employees, their spouses and children of the Metropolitan Corporation and other participating employers", as such clause was enacted by By-law No. 148-97 of that former municipality, is repealed and the following substituted therefor:

 "(e.1)`City' means the City of Toronto incorporated by the City of Toronto Act, 1997;" .

(2)Subclause 1(1)(ee)(i) of said By-law No. 15-92 is amended by striking out the words "at that time" in the second-last line thereof and substituting therefor "at the member's death".

 (3)Subsection 13(1) of said By-law No. 15-92 as heretofore amended is further amended by re-labelling clauses (a) and (b) added by clause 3(4)(b) of By-law No. 148-97 of the former Municipality of Metropolitan Toronto as clauses (c) and (d) respectively.

 (4)Subsection 32(3) of said By-law No. 15-92 is amended by inserting the words "or after" immediately preceding the word "retirement" in the first line thereof.

 (5)Subsection 37(2) of said By-law No. 15-92 as amended by said By-law No. 148-97 is further amended by inserting the word "a" immediately preceding the word "stepped" where same appears therein.

 2.(1)Subsection 13(1) of said By-law No. 15-92 as heretofore amended is further amended by inserting the text "subsection (1.1)," immediately following the words "Subject to" at the beginning thereof.

 (2)Section 13 of said By-law No. 15-92 is further amended by adding thereto the following subsection:

 "Contribution

Reduction

1998 - 2003

13.(1.1)During the period from and including July 1, 1998, to and including June 30, 2003, clauses (1)(a) and (b) shall be interpreted as if the contributory rates specified therein were 6 per cent. and 5 per cent. respectively rather than the rates of 8 per cent. and 7 per cent. provided for therein."

 3.(1)Subsection 23(3) of said By-law No. 15-92 as such subsection was amended by By-law No. 45-94 of the former Municipality of Metropolitan Toronto is further amended by striking out the first word thereof and substituting therefor the text "Subject to subsection (3.1), the".

 (2)Section 23 of said By-law No. 15-92 is further amended by adding thereto the following subsection:

 "Modified

Reduction

1998 - 2003

23.(3.1)During the period from and including July 1, 1998, to and including June 30, 2003, subsection (3) shall be interpreted as if

 (a)the number of completed years specified immediately following clause (b) thereof were eighty rather than eighty-five as there provided;

 (b)the percentage specified immediately prior to clause (c) thereof were 22 per cent. rather than 4 per cent. as there provided;

 (c)the number specified at the beginning of clause (d) thereof were eighty rather than eighty-five as there provided."

 4.(1)Subclauses 31(3)(a)(i) and (b)(i) of said By-law No. 15-92 are amended by striking out the text "60 per cent" where same appears at the beginning of each such subclause and substituting therefor "66b per cent".

 (2)Subsection 32(1) of said By-law No. 15-92 as such subsection was amended by said By-law No. 148-97 is further amended by

 (a)striking out the text "60 per cent" in the third and fourth lines thereof and substituting therefor "66b"; and

 (b)striking out the text "65," in the fifth line thereof.

 5.(1)Said By-law No. 15-92 is further amended by adding thereto the following section:

 "General

Pensioner

Increase

(1998)

42.7(1)Save and except for those pensions increased pursuant to sub-section (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 employee member entitled to a deferred pension under clause 28(1)(a) and, if applicable, clause 28(4)(b), or predecessors thereof,

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

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

Pensioner

Increase(a)payable

(1998)

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

 (ii)to each pensioner under section 29 or a predecessor thereof in respect of a deceased employee member who died prior to retirement; and

 which commenced on a date shown in Column I;

 (b)payable to each pensioner under section 31 or any predecessor thereof in respect of a deceased employee pensioner whose retirement commenced on a date shown in Column I;

 (c)payable to each employee member entitled to a deferred pension under clause 28(1)(a) and, if applicable, clause 28(4)(b), 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 4 and 6 shall be deemed to have come into force immediately prior to the increases called for by the new section 42.7.

 6.Effective July 1, 1998,

(a)the reduced benefit then being received by any pensioner member pursuant to clause 32(3)(a) of said By-law No. 15-92; and

 (b)the increased benefit then being received by the spouse of any deceased employee member pursuant to clause 32(3)(b) of said By-law No. 15-92,

 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 4 of this by-law.

 7.(1)Subject to subsections (2) to (5), this by-law shall come into force on the date of its enactment and passing.

 (2)Subsection 1(1) shall be deemed to have come into force on the 1^st day of January, 1998.

 (3)Subsections 1(2), (4) and (5) shall be deemed to have come into force on the 1^st day of January, 1992.

 (4)Subsection 1(3) shall be deemed to have come into force on the 1^st day of January, 1997.

 (5)Sections 2 to 4 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 ^th 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 Pension Plan 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.)