The employees and employee sponsors of the Regina Civic Pension and Superannuation Plan have finalized a letter of intent to address the pension deficit.
The plan, which covers about 6,700 city employees, had a deficit of about $293 million at the end of 2011.
Some of the proposed changes include the following:
- legislative changes to allow the plan to pay off its existing deficit over 20 years, as opposed to the 15 years currently required;
- sharing of special payments: employers are to pay 60% of the contributions required to fund the deficit with the remaining 40% to be paid by active employees;
- no benefit increases while the deficit is being paid off;
- years of earning calculation to be changed from an average of three years to an average of five consecutive years;
- overtime pay is no longer included in the calculation of an employee’s pension;
- the rule of 80 (age plus years of service) to be changed to the rule of 85 for pension eligibility;
- the cost-of-living adjustment becomes conditional instead of guaranteed for future pensionable service; and
- the adoption of the funding policy to provide a framework of management policies to avoid future deficit problems.
“While this has been a long process to reach this point, I am encouraged that all parties were able to come together and make the trade-offs to balance the needs of both employees and taxpayers,” says Brent Sjoberg, deputy city manager and chief financial officer.
The proposed changes still need to be approved, and ongoing discussions are being held to review potential governance modifications.
Before any changes can come into effect, amendments to a bylaw must be made—which must then be approved by the Civic Pension and Benefits Committee, Regina City Council and the provincial government.
The city hopes that the benefit changes, contribution rate changes, the amending formula and the funding policy will be in place in 2014.
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