Board Communique: December 5, 2022
The Municipal Pension Plan will provide additional funding for the Municipal Retiree Benefit Trust
In 2021, the plan partners—the employer and employee sponsors of the plan—created the Municipal Retiree Benefit Trust (MRBT) as part of plan redesign changes. The MRBT provides a new way for retired members to access group health benefits. When the plan partners established the MRBT, the plan provided initial funding of $100 million. At the time, the specific amount needed for sustainable funding was not known.
At the request of the plan partners, the board will transfer additional funds to supplement the seed funding and extend the sustainability of the trust. The additional funding is not a response to inflationary or cost pressures that have arisen since the transition.
The additional funding will be taken from employer contributions that would otherwise go into the inflation adjustment account.
The additional amount—up to $70 million—will be transferred between November 17 and December 31, 2024.
The Municipal Pension Plan remains healthy. The plan is fully funded, as determined by the valuation taken at December 31, 2021. Half of the available basic surplus (i.e., 50 per cent of $1.018 billion) from the 2021 valuation went into the inflation adjustment account, as directed by the Joint Trust Agreement. The plan’s actuary has confirmed that the additional funding for MRBT does not affect the health of the plan.
What it means for active members
You do not need to take any action. Your contribution rates are not changing.
What it means for retired members
You do not need to take any action.
What it means for employers
Employers do not need to take any action. Contribution rates are not changing as a result of this action. Please continue to remit according to the latest contribution rate letter you have received.
The additional funds will be taken from a portion of employer contributions that would otherwise go into the inflation adjustment account. The amount is separate from the 0.6 per cent of salaries used as ongoing funding for the MRBT.