Former finance commissioner and pension trustee Andrew Beckett said the pension board repeatedly raised concerns with council about the plan's performance. (CBC)

It was clear in 2001 that Saint John’s pension plan was deteriorating and council was alerted at the time, according to the city’s former finance commissioner.

The pension plan had a $24-million surplus in 2000, but by 2003, it had dropped to a $39-million deficit, Andrew Beckett told the Court of Queen’s Bench Thursday.

Beckett was testifying for a second day in a high-profile defamation case against John Ferguson, a former city councillor.

The city’s pension board is suing Ferguson for allegedly defamatory comments he made in 2005 about its handling of the pension fund, which had a $47-million deficit at the time.

The deficit has now ballooned to $190 million.

Beckett, who was treasurer of the pension board during the mid-2000s and a former deputy city manager, is one of the plaintiffs in the lawsuit.

He told the judge and jury he was constantly monitoring pension issues, including fund performance, and that all board members spent up to 10 days a year taking training in pension issues, which included attending international conferences.

Excessive disability pension awards

The pension board repeatedly notified council of its concerns about the plan, including what he described as excessive disability pension awards in 2003.

Nothing was ever hidden, said Beckett.

Regular newsletters were produced for employees, he said, and annual reports were prepared on the state of the pension plan – although there was no report in 2003 and he could not say why.

Earlier this week, Ferguson’s lawyer named Beckett as one of the people responsible for the pension plan’s deficit.

Rod Gillis claims Beckett was among the members who voted for expensive changes to the plan in the mid- to late-90s, which they stood to benefit from the most.

The changes, which included increasing the maximum pension cap to $45,000, up from $40,000 and then indexing it, did not benefit the average pensioner, but did benefit the top-earners who enacted the changes, argued Gillis.

Beckett testified that all city managers had filed conflict-of-interest statements in 2004, explaining their pension advice could benefit them.

Ferguson’s criticisms of the integrity of the pension board and its members has been difficult to deal with personally and damaging professionally, said Beckett.

The board decided to sue because Ferguson’s accusations of misdeeds were false and not taking any action might lead the public to believe they were true, he said.

Beckett testified that reviews of the pension plan in 2003 clearly show the deficit was caused by poor investment returns.

Increasing disability pensions were also an issue, adding about $5 million in costs, but investment problems were far worse, he said.

The pension board had about 60 per cent of the money in stock markets worldwide, said Beckett.

The plan needed an eight per cent investment return and stock markets were expected to return 12 per cent, he said.

The trial is slated to last six weeks.