Item - 2019.GL6.9

The General Government and Licensing Committee received the report (June 10, 2019) from the Controller for information, including Attachment 1, titled Toronto Fire Department Superannuation and Benefit Fund Actuarial Valuation Report as of December 31, 2018 (May 2019), prepared by Buck HR Consulting with respect to the Toronto Fire Department Superannuation and Benefit Fund and its underlying Plan.

This report submits, for the General Government and Licensing Committee's information, a Funding Valuation as at December 31, 2018 on the Toronto Fire Department Superannuation and Benefit Fund (the Fund) prepared by Buck HR Consulting. The Fund finances the Pension Plan (the Plan). 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 10649, as amended, governing the Plan and the Fund.

At its meeting of May 2, 2019, the Toronto Fire Department Superannuation and Benefit Fund Committee (Benefit Fund Committee) decided in favour of continuing to use existing assumptions to assess the future liability of the spouses of retired members, despite the fact that City staff had compiled actual data regarding these same spouses. Had the actual spousal data been used, the Going Concern and Solvency liabilities would have increased to a point where only an automatic 0.35 percent cost-of-living increase could have been granted, as any additional increase would have put the Plan into a Solvency deficit. 

The Fire Pension Plan, similar to the Civic 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.