Montreal city workers to lose $160M in pension, union says

The union representing most of Montreal's municipal workers is calling on Mayor Denis Coderre to reverse a recent decision to trim pension benefits.

Union says it is ready to take City of Montreal to Supreme Court over cuts

The city's suspension of indexation on several pension plans is 'illegal,' says CUPE regional director Marc Ranger. (Radio-Canada)

The union representing the majority of Montreal's municipal workers is calling on Mayor Denis Coderre to reverse a recent decision to trim pension benefits.

The Coderre administration announced earlier this month it would suspend indexation on retirement plans for more than 15,000 municipal workers starting Jan. 1, 2017.

Pension plans are typically indexed annually to cover the rising costs of living.

With the changes, the Canadian Union of Public Employees says retired Montreal city workers stand to lose around $160 million over the next decade.

"For us, this decision is illegal. We're going to challenge it, of course. This decision to suspend the indexation is going to go to the Supreme Court," said the union's regional director, Marc Ranger.

The pension cuts will affect retired blue collar workers, managers, foremen, civil servants, firefighters and professionals.

Laval, Longueuil and Lévis to also make cuts

Cities in Quebec were given the power to suspend indexation through the province's controversial Bill 3, now known as Law 15, which passed in 2014.

The law contained a number of pension reforms the government said were necessary to combat a pension fund deficit that, at the time, stood at $4 billion.

The City of Montreal says the six retirement plans affected by the changes currently have a deficit of about $945 million. 

By suspending indexation, the city says that deficit will be reduced by nearly $170 million.

Laval, Longueuil and Lévis will also make cuts to municipal pension plans starting on New Year's Day.

Ronald Martin, president of the Montreal's firefighters union, doesn't believe the city had to go down this path.

"It's not an obligation, it's only a possibility. Some other cities, like Gatineau, did not suspend the indexation for their pensioners," he said.

The City of Montreal says the move was a necessary step for the future of municipal pensions and for "intergenerational equity."

With files from Matt D'Amours