Item - 2015.AU4.1

City Council on November 3 and 4, 2015, adopted the following:

1.  City Council request the Director, Pension, Payroll and Employee Benefits, in consultation with the Executive Director, Human Resources, to review alternate ways of managing the City’s Long-Term Disability benefit program, including a review of how the Toronto Police Service and the Toronto Transit Commission manage their respective Long-Term Disability benefit programs.

2.  City Council request the City Manager to ensure contract documents are finalized by the parties within a reasonable time period after an award of the contract.  Prior to City authorization, staff should ensure the contracts fully reflect the terms and conditions in the bid proposals, in particular the terms relating to bid prices.

3.  City Council request the Director, Pension, Payroll and Employee Benefits, to strengthen management controls in the next Long-Term Disability Group Benefits contract.  Steps to be taken should include but not be limited to:

a.  developing an administrative fee cost structure in the Request for Proposal that would not inevitably provide an incentive for the Benefit Carrier to approve more Long-Term Disability claims;

b.  including appropriate clauses in the Request For Proposal to enable the Auditor General to conduct an audit of the Carrier’s claims operation and adhere to relevant privacy and confidentiality legislation; and

c.  including a third-party audit clause in the Request For Proposal and the audit fee to be payable by the Benefits Carrier.

4.  City Council request the Executive Director, Human Resources, to develop and track performance indicators for assessing and continuously improving the City’s return to work process for employees in receipt of Long-Term Disability benefits.

5.  City Council request the Director, Pension, Payroll and Employee Benefits, in consultation with the City Solicitor and the Executive Director, Human Resources, to review the current process to seek consent from Long-Term Disability claimants to facilitate employee return to work process.

6.  City Council request the Executive Director, Human Resources, to explore ways to further enhance staff awareness and knowledge of early intervention and accommodation for employees with health issues, including an assessment of alternate training delivery methods.

7.  City Council request the Director, Pension, Payroll and Employee Benefits, to review the amount of refund from Manulife in relation to the “Regular Medical Correspondence” charges since 2003 as part of the Long-Term Disability benefit administration agreement to ensure the refund amount is complete and accurate.

8.  City Council request the Director, Pension, Payroll and Employee Benefits, to request supporting documents and cost breakdowns from Manulife for all “Other Charges” in the monthly billing statement for Long-Term Disability benefit administration services.  Staff to recover charges paid by the City for which Manulife cannot provide supporting documents or reasonable cost breakdowns.

9.  City Council request the Director, Pension, Payroll and Employee Benefits, to incorporate in the next Request for Proposal for Long-Term Disability benefit administration a requirement for the benefit carrier to provide supporting documents and cost breakdowns for all charges.

10.  City Council request the Director, Pension, Payroll and Employee Benefits, to take steps to minimize overpayments to employees receiving Long-Term Disability benefits.  Such steps should include but not be limited to:

a.  improving management oversight;

b.  ensuring timely notification of the Benefit Carrier of employee changed status; and

c.  ensuring timely contacts with claimants to negotiate a payment plan to recover the overpayments.

11.  City Council request the Director, Pension, Payroll and Employee Benefits, to explore ways to encourage better cooperation from Canada Pension Plan and Workplace Safety and Insurance Board in remitting benefit payments to City employees who are also receiving Long-Term Disability benefit payments. 

12.  City Council request the Director, Pension, Payroll and Employee Benefits, to ensure uncollectable Long-Term Disability overpayments are written off according to City procedures and reported to the appropriate Standing Committee.

13.  City Council adopt the confidential recommendations contained in Confidential Attachment 1 to the report (October 6, 2015) from the Auditor General.

14.  City Council authorize the public release of the Confidential recommendations and information contained in Confidential Attachment 1 to the report (October 6, 2015) from the Auditor General, at the discretion of the City Solicitor, in consultation with the City Manager.

The confidential recommendations and information contained in Confidential Attachment 1 to the report (October 6, 2015) from the Auditor General remain confidential in their entirety at this time in accordance with the provisions of the City of Toronto Act, 2006, as they pertain to labour relations or employee negotiations.  The confidential recommendations and information contained in Confidential Attachment 1 to the report (October 6, 2015) from the Auditor General will be made public at the discretion of the City Solicitor, in consultation with the City Manager.

The following confidential recommendations adopted by City Council were made public on October 27, 2016:

1.  City Council request the City Manager to review the appropriateness and financial impact of providing temporary employees Long-Term Disability benefits.

2.  City Council request the City Manager to review the Long-Term Disability benefit plan provisions including salary replacement level and salary threshold for returning employees to work.

3.  City Council request the City Manager to review City policies and practices in relation to continuing Long-Term Disability benefits to employees terminated with cause and employees facing allegations of fraud or disciplinary action with a view to minimizing potential abuse of Long-Term Disability benefits. 

4. City Council request the Director, Pension, Payroll and Employee Benefits Division, in consultation with the Executive Director, Human Resources Division, to review the appropriateness and financial impact of ending the employment relationship by offering settlement options to employees deemed totally disabled to age 65 and are unlikely to return to work.

Confidential Attachment 1 to the report (October 6, 2015) from the Auditor General has been made public with redactions and can be accessed under Background Information (City Council).