Saint John retirees not consulted on pension fix
Pensioners make up half of the city plan's membership
The head of the association representing retired City of Saint John employees says his members were never consulted about a proposed new shared-risk pension plan.
This, despite the fact that the estimated 850 retirees make up almost half of the plan's membership, said Claude MacKinnon.
"It just seems to me that it would stand to reason that you would want to talk to people and let them know ahead of time what's going on," he said.
On Monday, the chairperson of a pension task force that has been reviewing the city's beleaguered pension plan, told council it has two options — convert the pension to a defined contribution plan or adopt a shared-risk model similar to the one recently adopted by the provincial government.
Susan Rowland recommended the shared-risk model, which would see the risk for future deficits shared between workers and the city and open the option to temporarily reduce benefits if the fund falls behind.
Although the task force has spent months reviewing the plan and meeting with city unions, MacKinnon says it ignored retirees.
"What do I know? Nothing, I have not been told anything at all," he said.
"You get parties together and you talk to them. And normally it's all of the parties."
Impact on pensioners unclear
MacKinnon says he even tried several weeks ago to reach Rowland via email, but received no reply and has been unable to learn exactly what the proposed model would mean for pensioners.
Rowland left the council meeting after her presentation without talking to the media.
But she told council that retirees, like all plan members, would have a stake in the proposed shared-risk model. If the plan runs into trouble, their benefits could be temporarily reduced.
"That base benefit is 97.5 per cent secure. You're taking a two-and-a-half per cent risk," Rowland said.
Mayor Mel Norton could not be reached for comment.
The city's unions, which were involved in the review, have not publicly indicated whether they are in favour of the shared-risk model.
The city's official pension deficit stands at $195-million, but Rowland told council the more accurate figure would be $342 million.
Council could cut its pension deficit payments by $10 million a year and bring the deficit itself down by $35 million by switching to a shared-risk model, she said.
Council plans to hold a special meeting on Thursday night to discuss the matter.