Item - 2019.GL5.6

The General Government and Licensing Committee received the report (May 8, 2019) from the Controller for information, including Attachment 1, titled City of Toronto - The Toronto Civic Employees' Pension and Benefit Plan: Actuarial Valuation Report as of December 31, 2018, prepared by Buck HR Consulting with respect to the Toronto Civic Employees’ Pension and Benefit Plan and its underlying Fund.

This report submits, for the General Government and Licensing Committee's information, a Funding Valuation Summary as at December 31, 2018 on the Toronto Civic Employees' Pension Plan (the Plan) prepared by Buck HR Consulting. The Plan is financed by the Toronto Civic Employees' Pension and Benefit Fund (the Fund). This valuation provides information on the automatic cost-of-living increase of 2.30 percent in pensioner benefits effective January 1, 2019, called for under By-law 100-2018 governing the Plan and the Fund. The By-law contains a consolidation of former governing By-law 380-74, all its subsequent amending By-laws, and harmonizes the Plan text with a number of established administrative practices.

The Civic Pension Plan, similar to the Fire Plan, but unlike the Metro and Police Plans, has specific criteria in its By-law which, if satisfied, grants members an automatic cost-of-living increase assuming an appropriate valuation and, therefore, Council is not required to approve it.

On May 1, 2018, new provincial funding rules for defined benefit pension plans came into effect which are incorporated into the 2018 Valuation Report, which sets forth the financial position of the Fund for the year ended December 31, 2018 on Going Concern and Solvency bases and confirms that the Fund does not require any special payments by the City of Toronto.

The charts below summarize the financial position of the Fund as at December 31, 2018 and December 31, 2017 based on the actuarial valuations for those years.

Going Concern Valuation - This type of valuation assumes that the Plan will continue to operate until all pensions are paid out.

Solvency Valuation - This type of valuation assumes that the Plan was wound up on the valuation date (i.e., December 31, 2018) and the assets used, to the extent necessary, to meet existing liabilities, including the purchase of annuities for the pensioners and any unretired members.