Wednesday, October 13, 2010

Council pension proposal defeated - De-indexing | City workers applaud council decision (as published in the Daily Gleaner, October 13/10)

A proposal to de-index the pensions of city workers commencing Jan. 1 has been defeated.

Councillors voted Tuesday night to ask the city's superannuation board to sort through alternative measures to start reducing a $39.4-million pension fund deficit.

Coun. Marilyn Kerton introduced a motion to reconsider the proposed amendments to the pension fund, which was passed.

Then Kerton reintroduced the original motion that was passed by councillors Sept. 13. This time, however, the motion was unanimously rejected by council, which essentially scrapped the de-indexing plan.

Finance and administration committee chairman Coun. Mike O'Brien introduced a third motion to send the pension financing discussion back to the superannuation board.

The decision drew a round of applause from city hall employees who once again packed council chambers to show their support for the addition time to seek better solutions to bolster their pension account.

The provision was introduced when the pension account was flush with cash and before the financial market collapse of 2008-09, which reduced the earnings on investments in the fund.

The city has long argued that it shouldn't have to bring its pension fund into a balanced position over 15 years, which is what the legislation requires.

Instead, it wants the province to allow it to wipe out the deficit over 25 years. So does the City of Saint John, which is wallowing in a much larger deficit of $129 million on its pension account.

City leaders didn't get a hearing ear from the Liberals, but they're hoping Premier David Alward's government will listen. Mayor Brad Woodside said a meeting was held last Wednesday with the newly elected Conservatives in the Fredericton area.

"At the end of the day, together, we shall come back with a report to this council that is good for our employees, good for the people of Fredericton and everybody's happy. That's not an easy thing to do. That's the challenge to the superannuation board," Woodside said.

"We're going to work really hard to come up with something, but that's going to be a tall order and we might not come back with the exact number ... We'll work really hard, but it's not always easy to come up with something that will satisfy everybody," McConaghy said.

Woodside shot back: "I've made that clear that this is not for the faint of heart. There's five of you on there (on the superannuation board), if you think you can't deal with it, let me know and I'll find somebody who can.''

Wade Kierstead, president of CUPE Local 3864, said he didn't take offence at McConaghy's comments.

"The mayor has set an excellent mandate for the superannuation board ... but Coun. McConaghy is being realistic. It's all in a balance," Kierstead said.

Having 25 years instead of 15 to make up the pension deficit would be a help because it reduces the up-front cash demands for both employees and the employer, he said.

"It's the same as if you go out and you need to repay something over 15 years versus 25, obviously the 25 is better when you're waiting for the markets to rebound and overall improvement," Kierstead said.

"We just have to stick handle it along and make sure it's going in the right direction overall.''

Kathy Edwards, also a member of CUPE 3864, agreed.

"We were asking for more time to come up with solutions that would serve our city well, serve our staff well and into the long term for people after they retire," she said.

Edwards said if pension contributions have to go up, it would likely have to take place by July, but right now the numbers are speculative because they're based on past performance of the fund in a market downturn.

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