After lengthy negotiations with the City and consultation with the Business Agents and the Executive Board, I am happy to announce that there was a significant surplus in the LTD Plan at the end of 2015. The negotiations & consultation were around how to distribute the surplus funds in the fairest possible way.
A surplus in the Plan means that there are more assets in the Fund than are required to provide the anticipated benefits for qualified Plan members. The rules by which the Plan operates require that a “Rate Stabilization Fund” be the first priority in distributing any surplus finds.
Once the Rate Stabilization Fund is set, the rest is available for distribution. The details of the distribution are as follows:
- There will be no change to the premium rate – it will be held steady at 2¼%. The Union agrees with the actuaries that this is a point at which the plan is well funded and should be steady for the foreseeable future.
- Long term disability recipients have received an increase that exceeds the cost-of-living.
- All premiums paid by plan members in the calendar year 2015 will be refunded. As this money was taxed when it was earned and deducted from your paycheques, it will not be taxed again.
- It’s expected that the refund will appear on your paycheque on September 13 – perfect for those back-to-school expenses. And again – it is NOT subject to income tax.
The amount of your personal refund should be the same as the Year-to-Date (YTD) amount shown for LTD on your final pay stub for 2015.
Steve Bradshaw
President/Business Agent