CITY ALREADY RELIES ON ARM’S-LENGTH PENSION ANALYSIS

Our citizens have been hearing commentary that the City misled them about the $6.7M General Pension Plan deficit.

Based on a snippet of information it made public, the Transit union today is calling for a “third party review” of whether the Plan has such a deficit.

That process already occurs under provincial law:

- The City of Saskatoon has no role in preparing or approving the valuation process; rather the City relies on the expert advice of the Plan actuaries – experts who analyze the health of pension plans.

- The General Pension Plan is administered by a separate Board of Trustees which includes individuals appointed by the City, employee/union representatives and one independent member.  The Board’s role includes choosing the Plan actuary.

- There is a “triple check” involved in the valuation process all of which was followed:

1. The Board of Trustees retained the professional actuarial expertise of AON Hewitt who prepared the 2012 valuation.  The actuarial profession is much like the audit profession, or many professions, where they have a set of 'standard practices' and ethical considerations to follow when they value a plan.  They must certify it and sign a declaration that it is a fair representation of the plan status and is based on accepted and realistic assumptions.

- This is the first check of a third-party review.

2. Once submitted by the actuary to the Board, the Board is in a position of trust and must fully consider the valuation and the assumptions it is based on and approve it.

- This is the second check of a third-party review.

3. Following that, the actuary is instructed to submit, or file, the valuation with the provincial government regulator, the Superintendent of Pensions, who also reviews and determines the acceptability of the valuation. 

- This is the third check of a third-party review.

There is only one plan valuation of consequence and of record that the City of Saskatoon must pay attention to and that is the one prepared and filed to the provincial regulator under the requirements of the Pension Benefits Act.

The City did not prepare the valuation or approve it.  According to the law, we are required to respond to it.  However, in this case the City and taxpayer are 100 per cent responsible for the deficit.

The matter of the credibility of the valuation is not what is up for debate.  It has clearly been accepted.  In fact, the valuation formed the basis of the agreement to fix the pension plan every other union has agreed to except for the Transit union.

The Transit union shares no risk in funding the deficit, just the taxpayer. 

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