Nenshi slams planned cuts to public sector pensions

From today’s Calgary Herald, Mayor Naheed Nenshi’s letter to Premier Dave Hancock is attached to this email.

[ http://www.calgaryherald.com/news/alberta/Nenshi+slams+planned+cuts+public+sector+pensions/9802707/story.html ]Nenshi slams planned cuts to public sector pensions

BY REID SOUTHWICK, CALGARY HERALD MAY 2, 2014

Mayor Naheed Nenshi has issued a scathing review of the province’s proposed changes to public pension plans, arguing the reforms threaten to cripple city hall’s workforce and finances.

In a letter to Premier Dave Hancock, Nenshi outlined significant concerns with the government’s plans to rein in big pension deficits by scaling back retirement benefits for more than 200,000 public sector workers.

“The reform will create a dangerous incentive for our workforce to either take early retirement before 2016 or enter into the private sector,” Nenshi wrote. “It will complicate our labour relations, increase our costs as a city, create risk and uncertainty, and will not help our retirees.”

Finance Minister Doug Horner has said reforms are needed to shore up a $7.4-billion deficit faced by Alberta’s public pension plans and to avoid a crisis in the future. Still, he scaled back his initial reform package after facing a massive backlash, though unions continue to argue the proposals are unnecessary.

Under the revised reforms, employees would work longer to retire with full benefits and their cost-of-living benefits earned after 2015 would no longer be guaranteed to be 60 per cent of Alberta’s inflation rate, among other measures.

The changes would come into effect Jan. 1 2016.

Horner could not be reached for comment Friday evening.

In his letter, Nenshi said the reforms would encourage more city employees to retire early or leave for “more lucrative positions” in the private sector. City of Calgary employees can currently retire with full benefits when their combined age and years of service equal 85. Under the proposed rules, they’d have to be at least 60 with 30 years of service.

When the changes come into effect, 1,450 municipal employees, or 12 per cent of city hall’s workforce, could leave the city because they will no long be eligible for the same level of benefits, the mayor wrote.

Another 3,150 employees account for 27 per cent of the workforce are younger than 55 with more than 10 years of service at city hall. “With a reduced pension after 2016, many may find it in their financial best interest to leave the city for the private sector,” Nenshi said.

Among other concerns, the mayor said the Local Authorities Pension Plan, which covers City of Calgary employees and is among the plans facing sweeping reforms, already has a “reasonable” strategy to address its financial shortfall through increased member contributions.

“Given that there is an effective solution, we question the need for significant reforms.”

Nenshi is urging the province to set aside its proposals and adequately consult municipalities, something he said the government failed to do before introducing a reform bill in the legislature.

“I must be clear that we are not opposed to public sector pension reforms,” he wrote. “However, Bill 9 needs considerable work.”

rsouthwick

Twitter.com/theredsouth

Dave Cournoyer
Communications Advisor
United Nurses of Alberta
Website: www.una.ab.ca
Office: 780 425 1025
Mobile: 780 913 1563

Nenshi-Letter-to-Premier-Hancock-re-Proposed-Pension-Plan-R.pdf

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