A joint committee of RTAM (Rosalie Bornn, JoAnne Hoyak, Wayne Hughes) and MTS (Norman Gould, Roland Stankevicius, Bobbie Taillefer) representatives was established and was tasked with developing a plan to deal with the disbursal of the Restricted Surplus funds.

The following is a result of that Committee’s work and can be found on the TRAF website:

• - 2019 COLA was 1.23%.
• - 2020 COLA will be 1.35%.
• - Both the 2019 and 2020 COLA include the release of approximately $5.6 million of restricted surplus as required under the Teachers’ Pensions Restricted Surplus Regulation, 2017.
• - The restricted surplus will be available to provide COLA in 2021 and 2022, after which it will be depleted, as planned.

RESTRICTED SURPLUS
Restricted surplus represents funds in the Pension Adjustment Account (PAA) that are held in reserve as a result of the legislative cap that existed on COLA granted on July 1 each year for the 10-year period from 2008 through 2017. COLA during this period was limited to a maximum of two-thirds of the increase in the Consumer Price Index (CPI).

To the extent that the PAA had capacity to support a COLA greater than two-thirds of CPI, the excess funds were set aside as restricted surplus to be used to support COLA granted in 2018 or later. Restricted surplus was generated in each year from 2012 to 2016 inclusive. As the two-thirds CPI maximum ended with the grant of the 2017 COLA, no further restricted surplus will accumulate.

The Teachers’ Pensions Restricted Surplus Regulation, 2017 was enacted on
May 18, 2018. Under this regulation, the annual COLA will benefit from the release of the restricted surplus at a rate of 20% of the total restricted surplus for each year from 2018 to 2022 inclusive. Based on a restricted surplus amount of $27,987,000, this equates to $5,597,400 per year.