Estimated minimum employer contribution	$0(contribution holiday)	$176,000	$176,000
Estimated maximum employer contribution (only if the plan were to be wound up)	$2,888,000(contribution holiday)	$4,274,000	$4,274,000

*Although the valuation report identified preliminary special payment requirements of $76,000, it was determined these payments may not be required and therefore were not paid during the first half of 2020. This assumption was confirmed when the 2019 valuation was completed.

As indicated above, the asset value of the Plan has increased to $34,774,000 ($34.78 million). The Plan liabilities have increased due to a number of factors, such as life expectancy as well as expected future benefit costs. With the increase in the Plan’s assets, the minimum employer contribution, based on a solvency valuation, has declined to zero for 2020 (previously projected $176,000) with no additional payment required to cover the solvency deficit. With the plan performing well, the solvency ratio is now over 105% which allows for a contribution holiday, meaning no service costs are required to be paid in cash for 2020. With the valuation completed mid year, the contribution holiday will take effect from July 2020 to June 2021. Due to experienced gains within the Plan, there is no longer a going concern deficit and as such, the special payments related to this have also been eliminated.

The above chart also indicates the estimated maximum employer contribution of $2,888,000, which excludes the face value of the Letter of Credit and represents the theoretical amount that would need to be paid if the Plan were to be wound up. As the Plan is ongoing in nature, there is no requirement to fund this amount; however, Council should be aware that if the Plan were to be wound-up, transferred, or should legislation change, this full amount may be callable and require funding at some point in the future.

Risk Analysis:

The Office of the Superintendent of Financial Institutions (OSFI) requires that the attached Actuarial Valuation of the Transit Windsor’s Pension Plan be filed with OSFI no later than six months (June 30th) after the Plan’s year-end. The Executive Director, as the Plan Administrator, has filed the report to meet this deadline; however, still requires approval of the report. Failure to file the report in a timely manner would result in an audit by OFSI and any further action they deem appropriate.

Since 2011, a decision to fund the solvency deficit by way of draws upon the LOC has been recommended. While use of the LOC is the preferred methodology, should the market value fall, Transit Windsor would be required to fully fund the amount that was previously covered by the Letter of Credit. Of further note, should the Plan be wound up or transferred to another pension, the amount secured by way of the LOC would need to be fully funded to The Plan and would require an actual cash outlay to be completed by the City.