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2006-07-17_Supplemental Agenda Packet--Dossier de l'ordre du jour supplémentaire City of Saint John C mmon Council Meeting onday, July 17, 2006 C mmon Council Chamber upplemental Agenda Re: 11.2 Pension Plan A ministration Re: 11.2 City of Saint Jo n Management/Professional Staff Re: 15.5 St. Joseph's Ho pital I I I I I I City of Saint John Seance du conseil communal e lundi 17 juillet 2006 S lie du conseil communal Alinea 11.2 Alinea 11.2 Alinea 15.5 L'or re du jour supph~mentaire Ie deficit du regim~ de retraite un rapport intitulelManagementlProfessional Staff I'hopital 51. Jose1h j I I I I 1 I I I I I 1 \\, \~' I I I January 30, 2006 I j I Depnty Mayor Michelle Hoot In and Members of Common counc~ I I ] I I I Your Worship and Councillor: RE: Pension Pia Administration The Board of Trustees of the Ci of Saint John Employee Pension Plan has requested that this letter be sent in respons to continued concerns being raised over the administration of the City's Pen ion Plan. As the body responsible for the administration of the Plan the Board is very co cemed that, if unaddressed, the concerns could have a serious impact on the credibility of their work. While many of the concerns rais d to date have been non-specific, the one area that has been noted on several occasions is the management ofthe long-term disability provisions of the Plan. It has been alleged hat improper management of this portion of the Plan is costing millions of dollars on an annual basis. i DISABILITY ADMINISTRA ION The City's Pension Plan is som what unique in that it not only provides for a defined benefit pension but it also provi es for the long-term disability coverage for City employees. In order to qualify r long-term disability an employee must be found to be "Totally and Permanently" Disa led which is defined as follows: "Totally and permanently dis bled" means in relation to a member suffering from a physical or mental impairment that prev ts the member from engaging in any employment for which the member is reasonably suited y virtue of the member's education, training or experience and that can reasonably expected to la t for the remainder of the member's lifetime. I Under the provisions of the Pen~ion Plan no disability pension shall be paid unless the Board of Trustees: I a) has received ~ application for a disability pension signed by the member in a f9rm prescribed by the Board, I ! ~ '" c) has received a ~tten certification from a medical doctor, who is licensed to pra ise under the laws of New Brunswick or of the place where the mem er resides, that the member is totally and permanently disabled, and is satisfied that e member is totally and permanently disabled within the meaning of . s Act. b) The Plan also provides that if an ployee qualifies for disability under the Canada Pension Plan they are automatic By deemed to be totally and permanently disabled and thus qualify for the disability be efits under the Plan. for approving applicants has always been to refer ical practitioner (often referred to as the Pension ith a written opinion as to whether of not the person der the Plan. In each and every case, the Board's een based on the Pension Doctor having provided the Applicant is totally and permanently disabled within The process utilized by the Boar individuals to an independent m Doctor) who provides the Board meets the definition of disability acceptance of an application has Board with a certification that th the meaning of the Pension Act. As part of the work being perfo ed by Morneau Sobeco in 2002 .and 2003, the actuary made the observation that the nu ber of persons receiving disability benefits was high in relation to other industry standar s and employ~s. The Board immediately began to review this matter and sought ad ice from a number of sources including the Pension Doctor, the Board's Solicitor an the Board's Actuary. One ofthe items that clearly bec e apparent during this preliminary review was a number of interpretation issues "th the current definition of long-term disability. Views of the Pension Doctor and the Bard's solicitor made it clear that work was needed to clarify how the definition was in erpreted. In addition it was determined that simply relying on a medical opinion wh n approving applications was no longer sufficient. It was suggested that current best p actices would have the Board receiving input from not only a medical practitioner but a so the employer, occupational/functional assessment professionals and any other prof! ssionals as may be needed on a case by case basis. Similar observations and views ere subsequently expressed to the Board by Mr. Ron Pink, a lawyer with whom many of the Trustees were familiar as a presenter at educational pension conferences attended by Board members. Since that time, and on an on-going basis, the Board has so ght and received legal advice respecting issues associated with the past and fu e application of the disability provisions of the Plan. The Board decided to take imme iate action and to engage expertise to provide advice on best practices, current trends and to oversee a process that would ultimately result in the Board of Trustees receiving ind endent adjudication support services. While this review was being undertaken the Board ecided not to process any applications for Disability Benefits with the exception of a lications from individuals providing evidence that they .; , , are in receipt of CPP disability enefits. Accordingly no new disability cases have been approved since October of 2003 To carry out the review the Bo d engaged the services of Bill Leudey of Leudey Consultants Inc. Mr. Leudey ha considerable expertise in the area of benefit plan administration. Over the past 0 years he has led the Board through a series of discussions aimed at better und standing the scope of the Plan's definition of disability and the role the Board play's in . 'stering this section of the Plan. This process has resulted in the oard agreeing to retain professional assistance in the area of adjudication support s ices for disability applications. A Call for Proposals was completed and the Board is in e final stages of entering into an agreement with Lifemark Inc., who have demon trated expertise in providing this type of service. As part of their initial work Liti ark have already recommended a completely new application process and will be roviding adjudication support involving both medical reviews and occupational/functi nal assessments of applicants. Lifemark will also be reviewing all existing approved disability cases. The Pension Plan allows for a review on an annua basis to ensure that individuals continue to qualify for disability benefits. At present there are 99 individu Is in receipt of ~ disability pension from the City. Of 1 these 20 individuals were appro ed under the City's old Pension Plan (perI994). Under this previous plan individuals w re deemed to be disabled if they could not carry out the duties of their own occupation. Of the remaining 79 the followi g table summarizes some pertinent data: # of individuals % A 47 59.5 A 9 11.4 5 6.3 18 22.8 79 NOTES: l. Deemed Service - the PI provides that in calculating the disability pension, if the individual's pensionable service is less than 30 years, pensionable service shaU include the number of years from the dale of disability 0 age 65 to a maximum of 30 years service in total. If there is no deemed service the Pensio Plan incurs no additional cost as a res1l1lt of an individual going out under the disability provis ons verses normal retirement. 2. Of the ] 8 "other" approve applicants 3 are over the age of 60. As can bel. seen from the table p esented earlier the number of cases that need to be reviewed is.small (approximate 15-20) as most applicants are also in receipt of Canada .. . Pension Disability. The Board rains confident that an on-going review of these cases will show that most individuals ere and continue to be disabled in accordance with the provisions of the Act. It should be pointed out howev of all disability claimants to ens terms of the Pension Act. If at disability definition their pensio that the Pension Act clearly allows for an annual review e that they continue to qualify as disabled under the y time it is found that an individual no longer meets the payments can be discontinued. The Board of Trustees has consi tently applied the provisions of the Act based on the best professional advice availabl . When issues have been raised 1lhe Board has spared no effort in seeking out independen professional advice and is continuing in its efforts to apply best practices in the matt of disability adjudication procedrures. The Board is of the opinion that he recent public comments with respect to disability management and pensions are b ing made without full knowledge of the activities of the Board and without full knowled e of all of the professional advice that has been provided to the Board. These types of uni formed and unfounded comments cast a very negative and distorted cloud over the acti "ties of the Pension Board. In addition and most significantly it creates the impre sion that all individuals in receip~ of a disability pension from the City are in some way c eating the system. This is unacceptable and unwarranted. - In the meantime if any member f Council has specific informatidn that would give rise to concerns over the administrat'on of the Plan we would ask that it be brought forward so that appropriate action can be taken. Yours truly, Mayor Norman McFarlane Chair City of Saint John Employee Pe sion Plan ": . \\.'J-~ \~ ity of Saint John Mana ement/Professional Staff Establishment - 2002 Establishment - 2003 Establishment - 2004 Establishment - 2005 Establishment - 2006 83 69 70 77 80 In approving applications under e 2002 Early Retirement/V oluntary Separation Program the following positions were eliminated by Council: Position Assistant Superintendent - Arenas Manager, Real Estate & Develop ent Superintendent Intergovernment Affairs Officer Public Affairs Manager Superintendent Superintendent Administrator Fleet Services Financial Analyst Budget Control Officer Superintendent Superintendent Superintendent Superintendent Land Surveyor .. . ... < Department Building & Inspection Sel"'tices Building & Inspection Serrices Building & Inspection Services City Manager's Office Community Services Community Services Community Services Corporate Services Corporate Services Municipal Operations Municipal Operations Municipal Operations Municipal Operations Municipal Operations Planning & Development Since 2003 the following 12 m agement positions have been added to the Estatllishment: Position Deputy City Manager - Programs & Priorities Program Manager - Vision 2015 Administration Officer Manager of Planning Planner Municipal Engineer (3) Solicitor Corporate Records Manager Commissioner of Corporate Servi es Operations Manager - Leisure Services Programs Department One position was eliminated d a net increase of 11 positions ov City Manager's Office City Manager's Office Leisure Services Planning & Development Planning & Development Municipal Operations City Solicitor's Office Common Clerk's Office Corporate Services Leisure Services g this time - Commissioner of Community Services for the years 2003 to 2006 inclusive. In all cases positions were adde only with the approval of Counoil during the annual budget process and the subsequ t approval of the Establishment of Permanent Positions. ~ , St. Joseph's Hospital The St. Joseph's Hospital parkin project is a joint project between the Atlantic Heath Sciences Corporation and the Sa nt John Parking Commission to ~mprove the parking situation around the hospital. . 2 hour parking meters w re introduced on Coborg Street and Bayard Drive about three or four years ago a the request of St. Joseph's Hospital. . Discussion stated on the present parking project with the Atlantic Heath Sciences Corporation a couple of ears ago to see how we could work together to improve parking at St. Joseph's ospital. . Doctors parking in front of the hospital will move to the rear of the hospital to free up 15-20 spaces in ont ofthe hospital and this will provide more parking for patients going to the ospital. . There will be a total of pay and display parking machines in front of the hospital that will servic 76 parking spaces. One of these machines will be handicap and set lower t the ground. . The Golding Street park ng lot by Castle Street will have 73 spaces on the upper lot and II spaces on the lower lot and will be serviced by2 pay and display parking machines. . The hours of operation n the street and in the 2 parking lots (in front of hospital and Golding Street by C stle) parking lots will be Monday-Friday from 7am to 6pm. . The parking rate will be $1.25 per hour on the street and in the two parking lots. The Golding Street Lot ill be $1.25 per hour with a 6.00 daily rate and the rate for the lot in front of the hospital will be $1.25 per hour with no daily rate. . The parking lot behind t e hospital next to the cathedral will be staff parking. . The two new parking 10 s off Golding Street will be paved and landscaped and concrete sidewalks in fr nt of these parking lots have been upgraded. . The project cost is esti ated around $370,000 and the capital cost and capital cost interest will be rep id over a five year period from parking revenue. . The SJPC will operate t e parking operation, collect the revenue, pay the expenses and split the n t revenue on a 65%HospitaI35%SJPC after operating expenses and Capital C sts. . The pay and display par ing machines on the parking lots will accept money from 6am in the mornin but the time will not start until 7 am. Benefits: . Provide more patient p rking. . Substantial portion oft e patient parking will be much closer than it has been in the past because doctor will move to the rear of the hospital. . The more controlled pa king should eliminate or at least reduce the number of illegal parkers and con sion about where to park.