Regina city employees face $238 million pension shortfall

A $238 million deficit is jeopardizing the pension of Regina city employees.

To help make up that shortfall, employees have agreed to a three percent hike in pension contributions.

“It wasn’t our choice to set the rates the way they are,” said Kirby Benning, the Chair of the Civic Pension and Benefits Committee. “We feel they are overly high, but the actuary said this was what the rates must be, so we have to implement them.”

City of Regina administration, however, is not comfortable with the idea. The pension is a 50-50 split between the two sides, which means the city would also have to increase it’s contributions by three percent.

“City council would need to consider raising the mill rate of course,” said Brent Sjoberg, General Manager of Corporate Services for the City of Regina. “Raising taxes, or reducing services somewhere.”

So the city is recommending a different alternative, one that would keep contribution rates where they are at, but scale back some of the benefits in the pension.

“Our proposal would change the plan, bring it back into balance, be affordable and be attractive for employees and employers and taxpayers,” said Sjoberg.

It’s an idea favoured by government watchdog group the Canadian Taxpayers Federation.

“What a lot of people don’t realize is private sector employees often don’t have any pension plan,” said Colin Craig, the Prairie Director for the Taxpayers Federation. “Why should they have to pay more in taxes to pay for public sector employees who already have a pension plan?”

The union representing the employees however fear that the city is trying to gut their pension plan, and believe the contribution increase is the best way forward.

“We view the rate increase as an interim measure,” said Benning. “A stop-gap measure until we can negotiate changes or improvements to the plan that would make it sustainable in the long term.”

The issue will go before city council on Wednesday, April 6th.