Koskie Minsky LLP has been retained by a group of retired members of the Metropolitan Toronto Pension Plan (the “Plan”) to assist them in the negotiation of a surplus sharing agreement in respect of the Plan, between the City of Toronto and Plan members, and to advise Plan members regarding a proposed merger of the Plan with the Ontario Municipal Employees’ Retirement System (“OMERS”). This group, the Pension Committee for the Metropolitan Toronto Pension Plan Surplus Distribution (the “Committee”), is comprised of three Plan members, Wes Rowe, Paul Enright and John Walford.
As Plan members may be aware, the City of Toronto (the “City”) has decided to merge the Plan with OMERS. If this merger proceeds, members’ pensions will be protected, and they will continue to receive their monthly benefit from OMERS, but with the added benefit of guaranteed cost of living increases. In addition, because the Plan is very well funded, there will likely remain substantial assets in the Plan following this merger (referred to herein as “surplus”), which will have to be distributed.
The Committee has negotiated and signed an agreement in principle (the “Proposal”) with the City, effective January 31, 2018. Details regarding the Proposal are set out in a package mailed to Plan members on February 23, 2018. Plan members are encouraged to attend one of three meetings being held in the Greater Toronto Area, on March 19, March 20 and April 10, details of which are included in the member information packages, to obtain further information.
The key provisions of the Proposal include the following:
- assets and liabilities of the Plan will be transferred to OMERS, which will continue to pay pensions, including guaranteed cost of living increases;
- following a proposed transfer of assets of the Plan to OMERS, remaining surplus in the Plan will be shared on a 50/50 basis between Plan members and the City;
- expenses incurred by the City in negotiating and implementing the Proposal will be deducted from the City’s share of surplus, while expenses incurred by the Committee in negotiating and implementing the Proposal will be deducted from the Plan members’ share; and
- each Plan member’s share of surplus will be determined with reference to the value of the member’s monthly pension, subject to a minimum payment of $2,500.
The Proposal is subject to a number of conditions, most importantly the following:
- at least 75% of Plan members must vote in favour of the Proposal, by no later than May 15, 2018; and
- the Proposal cannot proceed if the Plan does not merge with OMERS.
Plan members who support the Proposal are encouraged to complete the Authorization and Retainer Form contained in their information package and return it to Koskie Minsky prior to May 15, 2018.
Plan members who have any questions regarding the Proposal can contact Koskie Minsky either by telephone or email, details of which are set out under the “Contacts” tab below.