Summary of Group 2 Proposed Changes
Group 2 (G2) is a small group within the Municipal Pension Plan with approximately 340 police officers and fire fighters who are not in Group 5. There are very few proposed changes that would affect this group.
The following benefits will remain in effect:
- G2 will retain a dual benefit accrual rate; and
- G2 will see no changes to early retirement subsidies or their bridge benefit.
The proposed changes which will affect Group 2 members include:
- Members will have a single contribution rate of 8.92%, which includes a contribution to the inflation adjustment account. Currently, G2 members contribute 8.5% on salary below YMPE and 10.0% on salary above YMPE, which includes a contribution to the inflation adjustment account. The proposed single contribution rate is equivalent to the current average G2 rate.
- Members will participate in the group contribution rate rebalancing account (GCRRA). The GCRRA will help to protect G2 and G5 members and employers from potential future contribution rate swings. Public safety’s share of surplus will be used to fund the account.
- Members will have a highest average salary (HAS) calculated based on their four highest earning years, as opposed to five, which generally means a HAS 4 would result in a higher HAS at retirement.
- Members will have a change in the normal form of pension from a single life with no guarantee to a single life with a 10-year guarantee. This provides an increase on all pension amounts, even if a different optional form is selected.
Plan partners are also proposing to make changes that will benefit all members. These include:
- Establishing a new health benefit trust to support the sustainability and affordability of group health benefits for retirees.
- Funding the rate stabilization account to mitigate increases in future contributions for either employers or employees.
- Strengthening inflation protections to support cost of living adjustments over the long-term for retired members.