Fredericton councillors have approved a contentious package of changes to the city's pension plan to battle the plan's $37-million deficit.

The reform package will force city workers to increase their personal contributions, the indexing of pensions will be capped and any overtime hours will no longer count as pensionable benefits.

The city is struggling to get its pension fund back into the black. City councillors argue that taxpayers will save $115,000 annually by eliminating overtime from pension calculations.

Fredericton Mayor Brad Woodside said the pension changes represent a fair deal for both taxpayers and city staff.

"The committee was represented by the union, and did everybody get what they wanted? No. But that's the report that we asked for, that's the report that we got back and that's the report that council supported tonight," Woodside said.

The pension changes were hardly unanimous.

Coun. Jordon Graham, who is the new chairman of the city's finance committee, opposed the changes. He said earlier in May the pension package was too expensive.

Meanwhile, Wade Kierstead, president of Canadian Union of Public Employees Local 3864, which represents 56 technical and professional employees, said workers are upset about the reforms.

"This significantly impacts a lot of people — mainly outside workers, police and fire — so that it makes a significant amount of difference to what they calculate for their post-retirement pension," he said.

The union leader said if the overtime change was removed from the reform package that the proposal would have received "99 per cent support from employees."

Fredericton isn't the only New Brunswick city council having trouble coming to grips with mounting deficits in their employee pension plans.

Saint John has also been forced to freeze wages and cut benefits to deal with its $129-million pension deficit.