Saint John pension deficit worst in region
Posted: Oct 6, 2011 11:44 AM AT
Last Updated: Oct 6, 2011 11:40 AM AT
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.
Latest New Brunswick News Headlines
- Trudeau raises environmental questions over pipeline
- Liberal Leader Justin Trudeau says a proposed west-east pipeline project will not go forward unless it addresses key environmental concerns. more »
- Rothesay man charged with 2nd-degree murder
- Adam Prest, 39, has been charged with second-degree murder in the death of his common-law wife Tanya Shand in Rothesay on Wednesday. more »
- Duffy expense claims reveal more about campaign travel
- Election spending records show additional days Senator Mike Duffy spent on the campaign trail in the 2011 election, including days he told the Senate he was on business, and days on which Deloitte auditors couldn't track him. more »
- Chinese student drowned, pathologist tells inquest
- Drowning was the cause of death of a Chinese student in Saint John two years ago, a coroner's inquest was told on Thursday. more »
Top News Headlines
- How was the Mike Duffy report 'whitewashed?'
- Opposition parties pushed the government on Thursday to answer questions about the "whitewashed" Duffy report while the RCMP is also seeking more information from the Senate as part of its review of questionable expenses. more »
- 2nd suspect in Tim Bosma murder case to plead not guilty
- The lawyer for Mark Smich says the Oakville, Ont., resident will plead not guilty to first-degree murder in the death of Tim Bosma, the Hamilton man who disappeared earlier this month after taking two men on a test drive of his truck. more »
- SNC-Lavalin letter says Gadhafi son offered VP post: RCMP
- SNC-Lavalin's ties to Libya's former dictatorship ran so deep the company offered the son of Moammar Gadhafi a six-figure job as a vice president in 2008, according to a newly unsealed RCMP affidavit. more »
- Canada Post campaigns against 'no flyers' mailbox signs
- Canada Post has been mailing more than 900,000 letters across the country to people to try to convince them to remove "no flyer" signs from their mailboxes. more »
- Rothesay woman killed in domestic homicide
- Rothesay man charged with 2nd-degree murder
- Man arrested for selling fake bus passes on Kijiji
- Kent Homes in Bouctouche lands its largest contract
- Fitch faces new questions over trust fund use
- Glut of Tory bills meant to stifle debate, Liberals allege
- Vandals spray-paint profanity on CFB Gagetown tank
- Sale of Edmundston mill good news, mayor says
- Paramedics unable to revive Chinese student, inquest hears