Saint John’s outgoing deputy mayor alleges city council was "duped" into voting for pension reforms that will benefit the city’s top earners if approved by the provincial legislature.
The package of reforms was designed to cut employee benefits, such as cost-of-living increases, to help deal with the pension plan’s crippling $193 million deficit.
But Stephen Chase claims the package approved by council on May 7 included an "unauthorized change" that will improve retirement benefits for high-earning senior staff.
'Cunning senior management dupe councillors by providing an increased retirement benefit to themselves.'—Deputy Mayor Stephen Chase
"In the final moments of the last episode of council, the cunning senior management dupe councillors by providing an increased retirement benefit to themselves. Meanwhile retiree benefits reduced," he posted on Twitter Wednesday.
"Selfish and thoughtless greed," wrote Chase, who did not seek re-election in the May 14 municipal election.
He suggests the province’s attorney-general should investigate the matter.
City manager Pat Woods could not be reached for comment.
The proposed changes — currently being advertised in the Royal Gazette, as required by law before the legislature can vote on them — include a provision that employees who retire early would be able to receive pension benefits for years of service when they weren’t contributing to the plan.
Chase says that would benefit managers who have worked long enough to secure maximum retirement benefits, no longer contribute to the plan and whose work hours are no longer considered pensionable income.
"Senior staff dogged council for four years to give them greater retirement benefits," Chase posted on Twitter.
"And council [said] no — not going to cut retirees and other employees and then turn around and increase the high-earning senior staff with already rich retirement benefit."
Council was rushed
The proposed changes were not included in the council package that is normally posted on the city's website three days before each meeting and members of the media were not given the document.
Chase says council only received a copy of the proposed changes minutes before the open session of the council meeting that night and felt rushed to make a decision.
Council members were told the reforms had to be passed swiftly for fear the needed changes could miss another deadline to be approved by the legislature.
If council missed that deadline, it would have to wait until the fall sitting of the legislature.
Meanwhile the 2012 city budget is based on the proposed pension changes being approved, so if the changes didn't go through, further cuts might be required.
"New twist on transparency — if senior management can't discuss proposed pension reform behind closed doors then they will not disclose details at all (until someone reads the fine print in amendment notice)," Chase wrote on Twitter.
"It's really disturbing," Chase later told CBC News.
He said he's reviewed his documents and can't find any record of council approving the clause that lifts the cap on years of pensionable service for a handful of high-income staff if they elect to take early retirement.
It applies to only those with about 25 or 30 years of service who earn about $100,000 a year.
"The fact is there was never any debate or formal decision around it, which is, to me, very problematic," said Chase.
Other councillors perplexed
Coun. Bill Farren, who was re-elected to the new council, also told CBC News he did not see the change in question in the pension package he voted on.
"We have to revisit this," he said, referring to the newly elected members of council.
Farren said he can't understand how the clause got into the list of pension changes published in the Royal Gazette for approval of the legislature.
He noted the city's police commission — an arm's length group — previously lifted the same cap on the police chief's pension and other senior managers have since asked for the same consideration.
"Different staff people have tried through council to get this cap lifted individually. And we have always said no."
Coun. Donnie Snook, who was also re-elected, also said he cannot recall discussing the change before council voted.
All members of council present at the meeting voted in favour of the changes, with the exception of Coun. Patty Higgins, who complained about not having more time to read and absorb the document before being asked to vote.
"If this was OK'ed by council, it certainly didn't happen in my presence," Higgins wrote in an email to CBC News.
Chase suggests the attorney-general should investigate senior city managers for "slipping a benefit change (enhancement) in without any debate or approval by council."
In addition, he contends management should be probed for allegedly "deceiving council about reason why pension should be discussed behind closed doors" and "always waiting to last minute before requesting council approval and never submitting docs beforehand (giving time to study)."
Chase believes the MLAs also have the ability to strike the clause out of the package when they vote in the legislature.
Under the reform plan, about 1,700 city workers and retirees will lose more than $100 million in pension benefits and city taxpayers will invest an additional $10 million a year to pay down the rest of the pension deficit.
Saint John’s pension plan is a part of a provincial law so any changes must be approved by the legislative assembly.
If approved, the reforms are expected to eliminate the pension plan’s deficit in 14 years, according to city officials.
The city had originally planned to have changes in front of the legislative assembly in December, but missed a series of deadlines.