Saint John council ran into a new roadblock on the path to converting its pension plan to a less expensive, shared-risk model during a council meeting on Thursday evening.

The pension reform deal cannot be finalized until there is an agreement with city workers on how to provide long-term disability coverage to 64 workers who are currently out and receiving those benefits.

The new pension model that Saint John is preparing to adopt does not allow for long-term disability coverage.

The city now has to find an outside insurer quickly because council must pass its 2013 budget on Monday.


Saint John Mayor Mel Norton said city staff will be working hard over the weekend to finalize the pension reform deal. (CBC)

Councillors left Thursday night's meeting to continue discussing their options behind closed doors for more than an hour.

They emerged and voted to convert the pension plan subject to a solution to the question of long-term disability benefits.

Saint John Mayor Mel Norton said there will be meetings with city unions through the weekend, if necessary, to work it out.

"We're going to arrange co-operatively and collaboratively to ensure that there's long term disability coverage there," Norton said.

Saint John has paid almost $2 million out in long-term disability payments in 2012.

That will be the starting point for new coverage, making the true cost of this pension deal an $18 million annual expense to the city.

Coun. Susan Fullerton said on Thursday she wants an independent lawyer to review the document prepared by the Toronto firm that also represents the province and city workers.

"You need to have two separate lawyers, one representing each side, to have a fishing shack change hands and here we are with your esteemed firm, which is also representing [the Canadian Union of Public Employees]," Fullerton said.

Saint John voted to adopt the new shared-risk plan, similar to the plan adopted by the provincial government, earlier in December.

The pension plan, which is still being finalized, would share the risk for future deficits between workers and the city and opens the option to temporarily reduce benefits if the fund falls behind.

The shared-risk pension plan will mean Saint John politicians must find $12 million every year to pay down the pension fund deficit, which now stands at $161 million.

The city’s pension deficit under the old system had been estimated at $195 million.