A task force charged with solving Saint John's pension crisis will deliver its final report on Monday night, but a vote on approving any recommendations will not happen until next month.
The task force will propose a revamped pension plan for city workers that resembles a plan that is now being offered to some provincial employees.
Saint John’s pension deficit is estimated to be $195-million and will need to be repaid by taxpayers over the next 15 years.
The provincial task force has been meeting with Saint John workers and retirees since June trying to come up with a plan that protects pensions without exacerbating the city's financial crisis.
The solution to be presented is a so-called shared-risk model where both sides — the city and its workers — are jointly responsible for making up future deficits.
The provincial government rolled out its own proposal for a shared-risk pension plan in May, which was endorsed by three public and private sector unions.
Saint John council asked the provincial pension task force to examine the city’s struggling pension program.
Even with the proposed reforms, Saint John’s pension deficit will still have to be paid off.
City workers have agreed to accept concessions and likely increased contributions so the deficit will be somewhat lower than it is now.
But the steady fall in investment earnings for pension plans across Canada may lead to a recalculation for Saint John, driving the deficit back up.
Lower risk investments
The pension task force may also recommend moving the city’s pension plan’s investments into lower risk areas.
The investment return rate the task force came up with for provincial government employee groups is 4.5 per cent, much lower than the six per cent Saint John has for its plan.
Raymond Légère, a pension consultant, worked alongside the task force on behalf of the Canadian Union of Public Employees to create a new plan for New Brunswick's hospital workers.
He said the lower investment target offers safety for the plan.
"That enables you to go into investments that are less risky, a little bit more bonds, some investment in infrastructure and real estate that are considered to be lower risk than your so-called equities, which are buying company shares," he said.
The public will get a chance to offer feedback on the pension reform proposal.
Council is expected to accept, or reject, the plan in December.