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May 12, 2010
City of Toronto reduces financial liability with new Illness or Injury Plan (IIP)
  
The City of Toronto's current and future sick leave liabilities have been reduced by approximately $194.1 million with the implementation of the new Illness or Injury Plan (IIP). Participation results show that a combined 40% of full-time members of CUPE Local 79 and TCEU Local 416 employees have signed on to the City's new IIP. The report will be presented to the Employee & Labour Relations Committee on May 19, 2010.

The transfer of employees to the new IIP resulted in a one-time special payout of approximately $20 million which was funded by the Employee Benefits Reserve.

The introduction of the new IIP plan was one of the key objectives of the City in the 2009 collective bargaining negotiations with TCEU Local 416 and CUPE Local 79. The existing Sick Pay Plan (SPP) allowed employees to carry-over and bank unused sick days. The new collective agreements ratified with TCEU Local 416 and CUPE Local 79 on July 31, 2009 eliminated the SPP for all employees hired as of date of ratification and allowed existing employees in an SPP a one-time option to switch to the City's new IIP. Eliminating the SPP for new employees and allowing existing employees to switch to the new IIP was a way to contain the growing sick leave liabilities.

Employees hired before July 31, 2009, who were previously enrolled in the SPP, were provided a one-time option to switch to the new IIP and either receive a special payout of their sick credits, or freeze their sick credits for a payout upon termination or retirement. Employees were also offered the option of remaining in the existing SPP.

The elimination of the SPP for new employees and the transfer of 40% of employees to the new IIP will help achieve significant cost savings. As of December 31, 2009, the current sick leave liability was $243 million compared to $279 million at December 31, 2008. Details regarding the City of Toronto’s benefit liabilities will be reported to the Audit Committee through the City of Toronto’s consolidated financial statements in June.

Fact Sheet is available at http://www.toronto.ca/newsroom/

Toronto is Canada's largest city and sixth largest government, and home to a diverse population of about 2.6 million people. It is the economic engine of Canada and one of the greenest and most creative cities in North America. Toronto has won numerous awards for quality, innovation and efficiency in delivering public services. Toronto's government is dedicated to prosperity, opportunity and liveability for all its residents. For information about non-emergency City services and programs, Toronto residents, businesses and visitors can dial 311, 24 hours a day, 7 days a week.

Media contacts:
Celine Chiovitti, Director, Pension, Payroll and Employee Benefits, cchiovitti@toronto.ca, 416-397-4143
Cindy Bromley, Finance & Administration Communications Manager, cbromley@toronto.ca, 416-392-4993



 

 

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