Pension tension | Workers jam city hall meeting
"This is affecting all city staff across the board and their families long term," employee spokeswoman Kathy Edwards, sergeant-at-arms for CUPE Union 3864, told city councillors. "It's very important to us."
The union's president, Wade Kierstead, and an actuarial consultant, Paul Duxbury, also made presentations, suggesting a sober second look at how to preserve indexation in the pension fund for the 753 current contributors.
The pension fund is facing a $39.4-million paper loss due to the market downturn in mid-2007. Due to provincial legislation, the city has to account annually for the unfunded liability and create a plan to rebalance the fund's assets within 15 years.
But Duxbury said financial markets are rebounding. The pension fund had a gain of nine per cent over the first year and he urged council to wait for the newest valuation of its fund due to be provided by the end of 2010.
After the employees made a detailed presentation to council, Council introduced a notice of motion for Oct. 12 to reconsider the Sept. 13 resolution of council removing the indexation of pensions.
The employee representatives said they want to work to find solutions without de-indexing.
"We would absolutely be willing to sit down with our superannuation board representatives and anyone from council that's interested in trying to find other alternatives," Edwards said.
Kierstead said the average city employee will have a pension of just under $23,000 after 25 years of service.
But the city's finance and administration committee chairman, Coun. Mike O'Brien, said it would be too costly to keep increasing employee and employer contributions to the pension fund.
City council is balking at paying $167,500 in its 2011 budget with employees matching that same contribution level to retain the indexing provision.
O'Brien has said as much as $905,000 per year each - by employees and the city - might be required to eliminate the pension deficit over 15 years..
But Edwards said that's not taking into account how and when the financial markets will rebound and that it's unlikely that it will cost $905,000 annually.
"Don't overreact to a bump in the road," Edwards said.
With the average city employee earning $47,500 annually, unless the pension remains indexed, workers will lose buying power.
The city's pension fund is indexed to two-thirds of the increase in the annual cost of living. The spouse of a deceased pensioner is entitled to 60 per cent of the pension.
Rank-and-file workers are suggesting that council rescind the last amendment made to the fund which raised the maximum pensions for 35 employees earning more than $86,000 and reintroduce that as the markets continue to improve.
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