$68M PENSION DEFICIT ELIMINATED: AVOIDS $9M ANNUAL DEBT PAYMENT

For Release: September 26, 2014

Before the City began negotiations on a new pension deal, the 2012 funding status of the General Pension Plan showed an approximate $68M deficiency or deficit; that has now been eliminated following changes to the Plan enacted by City Council Monday September 22, 2014.

“If the City had done nothing, a 2012 valuation would have been filed showing a $68M deficit and taxpayers would have been responsible for paying it off,” says Marno McInnes, Director of Human Resources.

“We would have had to make special payments that would have been in the neighbourhood of $9M every year; that’s a lot of paved road, repaired water mains and leisure programming that wouldn’t be done – just dollars out the door.”

However, with much hard work and with everyone all working together at the same table, the City and eight of the nine unions in the Plan agreed with the changes.  The deficit reduced to approximately $6.7M, which remained as a result of the Transit union rejecting the changes and opting instead to push for the unaffordable old plan for its members.

“Now, because Council passed the bylaw Monday and everyone – including the Transit union – is under the new pension plan deal, there no longer is any deficit in the plan for the 2012 valuation,” McInnes says.