Tuesday, February 3, 2009

St John First City in Canada to Make Pension Changes

In St John there has been a pension battle brewing for the past several years.

As can be expected the battle has been brutal as the public sector workers fight to retain their gold-plated benefits. Benefits enjoyed for life and paid for by tax payers.

I have watched with interest the past few months as the discussions have continued in City Hall about the changes that will be required. The changes on the table would go a small ways to helping to solve some of the pension problems. It will be interesting to see how many of them actually are in the final proposal.

Some of the suggestions include:

* Eliminate the rule that allows employees to retire without penalty when they have 85 combined years of service and age, the so-called Rule of 85.
Note: I don't know what the rule is replaced with. It should be eligibility at age 65.

* Remove disability benefits from the pension plan.
Note: It was ridiculous they were included in the first place

* Change the way the city calculates pension payments to retired employees; instead of an average of earnings over three years, payments would be an average of earnings over 10 years.
Note: This is a start but still will result in gold-plated pensions. Just not as much gold plate.

* Change the annual increase of pension payments retirees receive to one per cent from two per cent.
Note: This is a necessary change.

It will be very interesting indeed. The newspaper article notes that several of the councillors are retired public sector workers on guaranteed pensions themselves. Let's hope the taxpayer will have a chance on this one.

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