Calgary city council looks to end retirement allowances

Calgary City Hall fall 2017. Dani Lantela / Global News

The move is underway to eliminate the payment of retirement allowances to city of Calgary employees.

Set up in the 1980’s as a way to recruit and retain staff, city of Calgary workers have been entitled to a retirement allowance which is equal to the employee’s annual vacation entitlement.

In a presentation to the priorities and finance committee Tuesday, members of city administration said they did not know who approved the plan.

“During the 80’s we know that it was a completely different economic environment, a completely different labour market than what we’re experiencing today,”  Mark Lavallee, the city of Calgary’s chief human resources officer said.

“We can only speculate that it was put in place so we were an attractive and competitive employer.”

READ MORE: Calgary councillors call for wage reduction at city hall amid $70M budget shortfall

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The Canadian Taxpayers Federation brought the issue to light in a Freedom of Information request and found the city paid out retirement allowances of $4.8 million in 2017 and $3.4 million in 2016.

Elimination of the allowance seems to be a foregone conclusion with the only question remaining is how quickly it will happen.

READ MORE: Canadian Taxpayers Federation criticizes Calgary city council transition allowance

Administration initially recommended that existing employees be grandfathered in and no new employees be eligible after the next round of labour negotiations end which is likely at the end of 2021.

However, ward 11’s Jeromy Farkas said he wants to completely end the program. “We give employees notice that this is something we are going to be phasing out and then by the end of 2021 it’s not something we do anymore,” he said.

Melissa Brundson, head of labour relations for the City of Calgary warned of legal consequences.

“The risk, to be perfectly blunt, if you act right now is that we will get grievances,” Bundson said. “If we get grievances and they say you can’t do what you want to do it’s going to delay the whole process.”

Councillor Evan Woolley preferred the measured approach in getting rid of the allowance, “I don’t think we should be paying out a retirement bonus like this but we need to exit this in a fair and reasonable way that doesn’t leave us open to significant legal challenges,” he said. “That would be foolish.”

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In the end, members of the committee voted not to grandfather in existing employees.

The matter now will go to debate by the entire council at their meeting on December 16.  That meeting will also debate whether to get rid of a transition allowance that is paid to members of city council when they retire or get voted out of office.