Mayor John Tory stands firm on low taxes in the face of massive budget shortfall, declining city services, and growing public concern over Tory’s decision to keep three large Toronto pension funds on life-support.
City council in July voted to delay a key deadline to determine the future of Mayor John Sewell’s pension plan, citing mounting costs and concerns over the future of other city-run employees — including the city’s 311 service, which is already understaffed and underfunded.
In the face of opposition from a growing group of councillors who fear Sewell’s decision to hold the plan open until 2020 rather than converting to defined contribution plans would jeopardize a significant portion of the roughly $9-billion in pension assets, Tory said he is standing by the decision to hold the plan open.
“I believe it’s a better plan for Toronto pensioners,” he said.
“I’d like to keep the pension plan open, but that’s not the only financial aspect of the situation. It’s about making sure that we’re doing the right things for the city.”
Tory has been adamant since day one that Sewell’s decision to keep three of Toronto’s largest pension funds on life-support while converting to a new model for workers on defined contribution plan (DC) would not impact the city’s obligations under its own plan. The Tories still support converting to an all-employee defined benefit plan, but have not said where that decision should be made.
In January, the City of Toronto announced it would no longer run its pension plan on a life-support basis until 2020. At the time, sources told the Star that the city had set aside $1 billion to make it possible, and that the decision was made after several months of negotiations with the province and the private sector that the province is not going to continue to fund its contribution.
Sewell announced the plan to keep the three pension funds on life support in the face of public outcry from the opposition.
“When the city first announced to do so, a group of local councillors and residents immediately went to the media and said that we could not do it, because that would mean the city would lose money,” he told reporters at the time. “I want to tell you that