Winnipeg Police Board requests $3.7M from city to cover pension liability
Overtime costs contributed to unexpected liability revealed by actuarial analysis
The Winnipeg Police Board has requested $3.7 million in additional city funding to cover an unexpected pension liability.
The board voted unanimously Friday to request the additional cash after the police service was notified the pension fund needed to be bolstered.
"Actuarial analysis indicated that an additional $3.7 million would be required in 2016 and future years to fund the city liabilities. This was not budgeted for, nor in control of the service, and therefore will require an additional appropriation for 2016," the police service stated in its second-quarter financial report.
The additional money is required to ensure the police pension fund can cover 100 per cent of its commitments, Deputy Chief Gord Perrier said. The police pension, like all pension funds, is still recovering from the 2008 financial crisis, even though its current investments are doing well, he said.
"There isn't a pension plan around that isn't still dealing with the market conditions presented since 2008," Perrier said.
Police board finance chair Derek Johannson said that overtime costs contributed to the pension liability. He said the pension burden is exacerbated when officers nearing retirement rack up overtime hours.
Perrier said police overtime only accounts for a portion of the unfunded liability. Overtime wages have been pensionable earnings since the advent of the police pension, he said.
Acting Chief Art Stannard declined to comment on the prospects of overtime remaining a pensionable earning for police, noting discussions about a new labour agreement have started up between the city and Winnipeg Police Association.
"I don't want to do anything to impede that or disrupt that," he said.
The police projected a $6.5-million year-end deficit in its second-quarter report because of a number of factors, including a drop in photo-radar revenue and costs associated with the move into Winnipeg's new police headquarters.
Stannard said the police service is looking at all of its budget line items in an effort to reduce the actual year-end deficit at the end of the year. But this effort will not take care of the unfunded pension liability.