Toronto Fire Department Superannuation and Benefit Fund - Funding Valuation Report as at December 31, 2019

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The decision

2020-07-28 · Toronto City Council · adopted

As filed

City Council on July 28 and 29, 2020, adopted the following: 1. City Council receive the report (June 22, 2020) from the Controller for information, including Attachment 1 to the report titled "Toronto Fire Department Superannuation and Benefit Fund - December 31 Funding Valuation" and Attachment 2 titled "Toronto Fire Department Superannuation and Benefit Fund - Financial Position Updates - Follow-up to May 26, 2020

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Pension Committee Meeting" prepared by Buck HR Consulting with respect to the Toronto Fire Department Superannuation and Benefit Fund and its underlying Plan.

On the agenda

As the city filed it

This report submits, for the Committee's information, a Funding Valuation as at December 31, 2019 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 1.95 percent in pensioner benefits effective January 1, 2020, called for under By-Law 10649 as amended, governing the Plan and the Fund.

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The Fire Pension Plan has specific criteria in its By-law which, if satisfied, grants members an automatic cost-of-living increase, and therefore council is not required to approve it. So long as sufficient surpluses exist on both a Going Concern and Solvency basis, members are entitled to an increase comprised of the lesser of (a) The Plan's 5-year average rate of return less the discount rate used for the current year's Solvency valuation; (b) the increase in the year-over-year level of the average Consumer Price Index (CPI) as published by Statistics Canada. In this case, the second criterion is the lesser of the two, and hence members are entitled to an automatic increase of 1.95 percent. On May 1, 2018, new provincial funding rules for defined-benefit pension plans came into effect which are incorporated into the 2019 Valuation Report, which sets forth the financial position of the Fund for the year ended December 31, 2019 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, 2019 and December 31, 2018 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. Table 1 - Going Concern Valuation ($ millions) December 31, 2019 December 31, 2018 Assets $197.5 $206.1 Liabilities $180.5 $179.6 Surplus / (Deficit) $17.0 $26.5 Solvency Valuation - This type of valuation assumes that the Plan was wound up on the valuation date ( i.e., December 31 st , 2019) and the assets used, to the extent necessary, to meet existing liabilities including the purchase of annuities for the pensioners and any unretired members. Table 2 - Solvency Valuation ($ millions) December 31, 2019 December 31, 2018 Assets $202.0 $197.7 Liabilities $187.2 $186.3 Surplus / (Deficit) $14.8 $11.4 Valuation will be filed with FSRA Valuation was filed with FSRA

Staff recommended

The Controller recommends that: 1. The General Government and Licensing Committee receive this report for information, including Attachment 1 titled "Toronto Fire Department Superannuation and Benefit Fund - December 31 Funding Valuation" and Attachment 2 titled "Toronto Fire Department Superannuation and Benefit Fund - Financial Position Updates - Follow-up to May 26, 2020 Pension Committee Meeting" prepared by Buck HR Consulting with respect to the Toronto Fire Department Superannuation and Benefit Fund and its underlying Plan.

Considered

2020-07-07 · General Government and Licensing Committee · amended
Decision as filed
The General Government and Licensing Committee recommends that: 1. City Council receive the report (June 22, 2020) from the Controller for information, including Attachment 1 to the report titled "Toronto Fire Department Superannuation and Benefit Fund - December 31 Funding Valuation" and Attachment 2 titled "Toronto Fire Department Superannuation and Benefit Fund - Financial Position Updates - Follow-up to May 26, 2020
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Pension Committee Meeting" prepared by Buck HR Consulting with respect to the Toronto Fire Department Superannuation and Benefit Fund and its underlying Plan.
Clerk’s note
The General Government and Licensing Committee requested that: 1. The Director, Pension, Payroll and Employee Benefits report directly to City Council with the following information: - 2019 Annual Valuation / Actuarial Report - Financial Statement 2018 - Financial Statement 2019 - Link to the by-law that governs the Toronto Fire Department Superannuation and Benefit Fund - Breakdown / Details of the annual administration cost.
2020-07-28 · Toronto City Council · adopted

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