Pension decision angers union leaders - Reforms | Overtime won't be part of pension income calculation, city rules

(Excerpts from article published in the Daily Gleaner, May 25/11)

The City of Fredericton has changed its employee pension plan, eliminating overtime in the calculation of pensionable income and capping annual cost-of-living adjustments at 1.5 per cent. Unionized employee groups, including firefighters, police officers and public works employees, had lobbied councillors not to do away with the overtime calculation. They argued they're routinely expected to work overtime to keep the city safe and roads clear in snowstorms.

The employees rallied at a family-style barbecue in the parking lot at city hall before heading to the council gallery to watch the vote. They held signs reading: "We just want a secure future for all" and "Invest in us, we are part of the city." When councillors voted in favour of the amendments package the workers stood up in the upper gallery, turned their backs to the councillors on the floor below and booed.

"We were under the understanding that there would be some discussion around it and that council had varying opinions. Some people were for this. Some people were thinking that there were better ways to address this," said Wade Kierstead, president of CUPE Local 3864, which represents technical and professional employees at the city.

Glenn Sullivan, vice-president of the city's firefighters union IAFF Local 1053, said the city blindsides its workers with changes. "They don't listen to the employees. It's the same thing over and over again. It's quite disheartening. We thought we'd have some support from some of the councillors," he said.

Sullivan said society needs to recognize that pension improvements are needed across the board, even the Canada Pension Plan, rather than leaving many seniors living hand to mouth. "It's time that people got on board with this and realized we need to protect our seniors and have a decent retirement," he said. Mayor Brad Woodside said workers made their pitch, but councillors didn't agree.

Coun. Mike O'Brien, who sat in on the pension reform discussions, said 17 options were considered during 20 meetings on pension reform and this is the best compromise that could be reached to try to reduce the $37.5-million deficit.

O'Brien, who had earlier voted against the pension amendments package, said with the elimination of overtime in the calculation of contributions, the city will save $115,000 in premiums. Since employees match the city dollar for dollar on premiums, workers will also pay $115,000 less per year on their share of the premiums.

"If you do the math, the net cost to the city now, is a little more favourable than what we looked at it in October with completely de-indexing the pension fund, so the taxpayers benefitted even better tonight. The employees, even though change is difficult, will now have a more stable pension plan. We don't have to revisit this for quite a few years."

O'Brien said 80 per cent of pension plans across the country don't allow overtime to be used in the calculation of pensionable earnings. The highest users of overtime - police and firefighters - also have higher levels of earnings annually compared to some of their city hall counterparts, he said. Employees made concessions and so did the city, he said.

In the days ahead, O'Brien said the city should look at additional pension reform, but any reforms should be undertaken on a go-forward basis with new city workers, leaving those contributing under the existing pension system intact.

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