Saint John pension deficit worst in region
The pension crisis has engulfed municipalities right across the continent, but Saint John's deficit is the worst in the region, according to municipal records.
The city's $123-million deficit dwarfs that of other major Maritime centres, records show.
Moncton's plan, for example, is considered fully funded with no deficit.
It serves 960 current and retired employees.
Under that plan, employees currently pay nine per cent of their regular salary, which the city matches, only their regular salary is pensionable, and the plan is not indexed for inflation.
Although Fredericton has found itself in a pension mess, it's not anywhere near the scale of Saint John's.
The capital city's unfunded liability is about $37 million, as of the last official measurement on June 30, 2010.
The municipality and its workers have both increased contributions by 0.9 per cent, as of June 2011.
In addition, overtime will be removed from pensionable earnings and indexing against inflation will be capped at 1.5 per cent, starting in January.
Miramichi also has an unfunded liability, but it sits at about $3.4 million.
Meanwhile, the Halifax Regional Municipality has a shortfall in its employee pension fund of $86 million.
But with 9,000 members, compared to Saint John's 1,700 members, the Halifax plan is considered healthy.
It earned about 10 per cent on its investments last year, slightly outperforming its benchmark by 0.04 per cent.
And there will be no change in contribution rates for the 2010-2012 period.
Saint John seeking help
Earlier this week, Saint John Mayor Ivan Court said the provincial government needs to recognize Saint John cannot handle the pension crisis on its own and that without help, the province's largest city could face layoffs and crippling cuts to services.
Saint John has been seeking provincial help for its pension deficit for almost a year.
As it stands, the city's $123-million deficit is on pace to climb another $30 or $40 million in 2011, according to officials.
Coun. Chris Titus has said the city needs to prepare residents for the possibility that major cuts are looming for services, such as police, firefighting and recreation.
Coun. Bruce Court contends the only way to deal with the crisis is to restructure the pension plan itself. For example, Court said the city could save $75 million by de-indexing, which would remove retirees' inflation protection.
Council is also reviewing a hiring freeze for all city departments until the 2012 budget is prepared.
Saint John originally asked the provincial government to extend the payback period to 25 years but that plan was rejected in the spring.
The city recently sent six different options to the provincial government, which include varying degrees of salary and benefit reductions, property tax increases and payback lengths.
Payback lengths of 15 and 20 years have been considered along with property tax increases of up to 16 cents per $100 of assessed property value.