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HomeMy WebLinkAboutCST 35-11 Cit'l Report To Executive Committee PT 1CKERI G Report Number: CST 35-11 Date: September 12, 2011 113 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: Council Compensation Policy Recommendation: 1. That Report CST 35-11 of the Director, Corporate Services & Treasurer be received; 2. That the revised wording for.Section 06.03 of the Council Compensation Policy, included as Attachment #1, be approved; and, 3. That the appropriate officials of the City of Pickering be authorized to take.the necessary actions to give effect hereto. Executive Summary: Section 06.03 of the Council Compensation Policy provides that the City shall contribute to a Member of Council's Registered Retirement Savings Plan (RRSP). Currently, the section requires that the City make the contribution directly to the respective member's. financial institution in January of the following year. The proposed change is to provide the Members of Council with a second option for receiving a contribution to their RRSP from the City. The Member of Council could make a contribution to their RRSP during the course of the year and the City then, reimburse that member, to a maximum of 13%. of their earned salary, in January of the following year. Financial Implications: There are no financial. implications associated with this report. Sustainability Implications: There are no sustainability implications associated with this report. Background: Section 06.03 of the Council Compensation Policy provides that the City shall contribute to a Member of Council's Registered Retirement Savings Plan (RRSP) to a maximum of 13% of the member's earned salary. This contribution is i Report CST 35-11 September 12, 2011 Subject: Council Compensation Policy Page 2 made directly to the member's financial institution before January 31St of the following year and is only provided if the member confirms they have sufficient contribution room. With the contribution being made in January, the member of Council has the benefit of recognizing the deduction in either the previous or current tax year. However, at the same time, it may limit when the contribution is being made. There may be times that it may be advantageous to make contributions to an RRSP at other times throughout the year to benefit from conditions in the financial markets. In effect, the member would be limited to only having a contribution made in January or having to reduce their contribution to account for the City's contribution being made in January on their behalf. The City can only make the contribution in the following year to ensure the member of council has earned their full salary for the year as this is what the contribution is based upon. Therefore, it is proposed that the member of council have the option of making a contribution to their RRSP during the course of the year and the City would then reimburse the member directly, to a maximum of 13% of the member's earned salary, in January of the following year after the member provided evidence of the contribution being made to their own or spousal RRSP. This would provide the member the flexibility of the timing of the contribution. Two options would now be available to members of Council. Attachments: 1. Revised Section 06.03 of Council Compensation Policy Prep red By: Approved/Endorsed By: Kristine Senior, CA Gillis A. Paterson, CMA Manager, Accounting Services Director, Corporate Services & Treasurer Copy: Chief Administrative Officer Recommended for the consideration of Pickering City Council Tony Prevedel, P.Eng. Chief Administrative Officer ATTACHMENT # I TO REPORT# L73 - li' Section 06.03 of Council Compensation Policy (revised) 115 06.03 A Member of Council may maintain a Registered Retirement Savings Plan (RRSP), either own or spousal, under Federal legislation to which the Corporation shall contribute a maximum of 13% of the Member's earned salary each year. a) To have the City make the contribution or reimburse for the contribution, the Member of Council must provide: i. Written confirmation that a member has sufficient contribution room, as provided by the Canada Revenue Agency on their notice of assessment, to accommodate the City's contribution shall be provided to the Treasurer no later than December 31St in any given year and the City's contribution shall be made directly to that RRSP no later than January 31 st of the next calendar year. OR ii. Evidence of a contribution by a Member towards an RRSP shall be provided to the Treasurer no later than December 31St in any given year. The member will then be reimbursed for the contribution, to a maximum of 13% of the Member's earned salary, no later than January 31St of the next calendar year. b) The word "salary" shall mean the annual base salary, pro- rated for a Member not holding office for an entire calendar year, of the Mayor and Councillors and it excludes all, taxable benefits and allowances. The contribution to an RRSP is a taxable benefit regardless of whether it is paid to the Member of Council or the financial institution. c) The City shall make its contribution only in the month of January of the next calendar year regardless of when the Member of Council made a contribution, except when a Member of Council ceases to hold office during the year, in which case a whole or partial contribution will be made in that year.