HomeMy WebLinkAboutHUR 02-16 - -- C4 Report to
PlC K E RI N G Executive Committee
Report Number: HUR-02-16
Date: November 14, 2016
From: Jennifer Eddy
Division Head, Human Resources •
Subject: OMERS Normal Retirement Age Conversion
- Fire Non-union Management Group
- File: A-4420-001
Recommendation:
1. That Council enact a By-law to amend the normal retirement age from 60 years under the
Ontario Municipal Employees Retirement System (OMERS) primary pension plan to provide
that the normal retirement age for the Fire Non-union Management Group shall be 65 years
effective January 1, 2017; and
2. That the appropriate officials be authorized to take the necessary actions included in this
report.
Executive Summary:
The City is recommending converting the Fire Non-union Management group to NRA 65 effective
January 1, 2017. The NRA for members of the Pickering Professional Firefighters' Association will
remain at 60.
A change in NRA from age 60 to 65 will have the following effects:
• The contribution rate of 9.2% will decrease for both the City and the members to the NRA 65
rate of 9.0%.
• The member will be required to work longer to qualify for an unreduced pension or normal
retirement age pension (employee's eligibility extended by 5 years).
Financial Implications:
Savings of approximately $3,500 per year (based on current contribution rates and current
earnings).
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HUR-02-16 November 14, 2016
Subject: OMERS Normal Retirement Age Conversion Page 2
Discussion:
Normal Retirement Age (NRA) is applicable to an entire class of employees, not individual
employees. Most OMERS members with the City of Pickering have a NRA of 65 with the
exception of Fire Services who have a NRA of 60 due to the physically demanding nature of the
job.
The City is recommending converting the Fire Non-union Management group (3 employees) to
NRA 65 effective January 1, 2017. NRA 60 for members of the Pickering Professional Firefighters'
Association will remain unchanged as this is a negotiated benefit. A decision to convert the NRA
for a group of employees is authorized by the employer and not the affected members. There is
no requirement under OMERS that an employer obtain the consent of the affected members,
although our Fire Non-union Management group is supportive of this change. A NRA conversion
would affect all three current incumbents of positions within the Fire Non-union Management
group. The affected positions are:
1. Fire Chief
2. Deputy Fire Chief (2 incumbents)
A change in NRA from age 60 to 65 will have the following effects:
• The contribution rate will decrease for both the members and the employer to the NRA 65
rate. The current contribution rates outlined below for NRA 65 and NRA 60, as determined by
OMERS, will remain in effect for 2017:
o 9.0% - NRA65
o 9.2% - NRA 60
• The employee must wait 5 years longer to be eligible for early retirement or normal retirement
and their early retirement factor (years of eligible service plus age) changes from 85 to 90.
Financial Implications
• Based on current contribution rates set by OMERS and current salaries within the Fire Non-
union Management group the annual savings are approximately $3,500.
• Affected members would receive a refund of the excess contributions between the NRA 60
and NRA 65 rates plus interest, less withholding tax.
• The City would not receive a refund of our matching contributions.
•
Attachments:
1. Draft By-law •
CORP0227-07/01 revised
HUR-02-16 November 14, 2016
Subject: OMERS Normal Retirement Age Conversion Page 3
Prepare. By: Approved/Endorsed By:
- chell CHRL . J- - P.d
A y
Coordinator, Compensation & Benefits D ..io Head, Human Resources
JE:am
Recommended for the consideration
of Pickering City Council
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3/. 20/Co
Tony Prevedel, P.Eng.
Chief Administrative Officer
CORP0227-07/01 revised
The Corporation of the City of Pickering
By-law No. /16
Being a by-law to amend By-law Number 2995 to
change the normal retirement age under the OMERS
primary pension plan ("Primary Plan"), and the
retirement compensation arrangement that provides
benefits for members and former members of the
Primary Plan ("RCA"), in respect of the employees
identified herein.
Whereas the City of Pickering ("Employer") previously enacted By-law No. 2995 and
elected to participate in the Primary Plan and the RCA.
And Whereas By-law No. 2995 provides that the normal retirement age for the Fire Non-
union Management group identified therein shall be 60 years.
And Whereas it is deemed desirable to change the normal retirement age from 60 years
to 65 years for the Fire Non-union Management group identified herein.
Therefore the Council of the employer enacts as follows:
Effective as of the first day of January 2017, the normal retirement age of employees
who are employed by the Employer as firefighters as defined in subsection 1(1) of the
Fire Protection and Prevention Act, 1997, as amended from time to time, and who are
employed in the following classes: Fire Non-union Management, is 65 years.
Now therefore the Council of The Corporation of the City of Pickering hereby enacts as
follows:
By-law passed this day of , 2016.
David Ryan, Ma
Mayor
y
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Debbie Shields, City Clerk
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