Saint John may have new pension deal in August
Mayor Mel Norton says pension changes will be good news for taxpayers
Saint John could have a plan in place to fix the city's growing pension deficit by the end of August, the new council heard on Monday.
Saint John's finance commissioner led the recently-elected council through the last of its orientation sessions, including a section on its troubled pension plan.
The highlight of the two-hour meeting on Monday was that a deal with the provincial government to fix the plan's $193-million deficit could be in place by the end of the summer.
Saint John Mayor Mel Norton said that deal could be good news for the city’s taxpayers.
"I'm hopeful we'll take away from this that the city will have budgeted enough from its previous decision to not have to put more into the pension plan," he said.
Just before the legislature adjourned for the summer, the MLAs voted to repeal the Saint John Pension Act.
That decision is giving the city more power to deal with its pension crisis.
Premier David Alward’s government also introduced a new pension framework that has been accepted by a handful of public and private unions.
The new pension framework, which is a shared-risk model, is following the Dutch system. The changes will not cut the benefits that are in place for retirees but it will likely lead to "marginal" increases to employee contributions.
Other changes include, basing pensions on an "enhanced career average" of earnings rather than the employee’s final salary.
Further, the retirement age will be moved to 65 from 60 over a 40-year period.
Unfunded liability could drop
The Saint John mayor announced last week the city had asked the provincial pension task force to make recommendations to the city on how to deal with its pension problem.
The task force is set to meet with city staff and union representatives beginning in July.
Norton said there is also a possibility the unfunded pension liability could drop by switching to the new model.
"The shared-risk model provides for a different way of calculating the deficit and so that different calculation — because of the way in which that model is structured — could significantly lower the unfunded liability of the plan," the mayor said.
Coun. Susan Fullerton, who is one of two new pension board trustees, said she will not discuss the issue until the end of the process.
But she also said her silence will not continue if she doesn't like the deal that comes from the provincial task force.
"If the province comes back and what they bring is not satisfactory, you'll never shut me up," she said.
Any deal brought forward by the province will have to be approved by council.