Item - 2019.GL5.8

The General Government and Licensing Committee recommends that:

1.  City Council receive the report (May 8, 2019) from the Controller for information, including Attachment 1, titled Metropolitan Toronto Police Benefit Fund: Report on the Actuarial Valuation for Funding Purposes as at December 31, 2018, prepared by Mercer (Canada) Limited with respect to the Metropolitan Toronto Police Benefit Fund and its underlying Plan.

2.  City Council approve, effective January 1, 2019, a total ad hoc cost-of-living increase of 2.22 percent in pension benefits to pensioners of the Metropolitan Toronto Police Benefit Plan.

3.  City Council amend By-law 116-2018 to provide for an increase, effective January 1, 2019, of 2.22 percent in current pension benefits under the By-law.

This report submits, for the General Government and Licensing Committee's information, a Funding Valuation as at December 31, 2018 on the Metropolitan Toronto Police Benefit Fund (the Fund) prepared by Mercer (Canada) Limited. The Fund finances the Pension Plan (the Plan). This valuation provides information on the cost-of-living increase of 2.22 percent in pensioner benefits effective January 1, 2019, called for under By-law 116-2018 governing the Plan and the Fund. The By-law contains a consolidation of former governing By-law 181-81, all its subsequent amending By-laws, and harmonizes the Plan text with a number of established administrative practices.

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 information 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.