Saint John approves last-minute pension reforms

Saint John council approved a final package of pension reforms on Monday night, in the final meeting before the May 14 municipal election.

The last-minute revisions include another $35 million in cuts to employee benefits.

In the new reform plan, city workers will lose more than $100 million in pension benefits and city taxpayers will invest an additional $10 million a year to pay down the rest of the pension deficit.

The reforms should put the city on pace to eliminate its $193-million pension deficit in 14 years.

Pat Woods, the city manager, said the plan's funds will be invested carefully in the future.

"We would move from, essentially, a 30 per cent allocation to bonds to a 45 per cent allocation to bonds. So there would be a greater allocation to less risky investments," Woods said.

Councillors were informed on Monday the reforms had to be passed swiftly for fear the needed changes could miss another deadline to be approved by the legislative assembly.

"We've got to get this ahead. We've got to get this in front of the legislature," said Coun. Gary Sullivan.

The city had originally planned to have changes in front of the legislative assembly in December but missed a series of deadlines.

The city politicians then requested the legislature hold a special session in January so they could approve the pension reforms, but that request was rejected.

Saint John officials and the provincial governments superintendent of pensions have been exchanging proposals on how Saint John could reform its troubled pension plan.

Councillors had already agreed to suspend cost-of-living increases for current and future retirees, a $75-million savings.

The additional cuts$35 million from future retirees are being made because the plan's investments are expected to make less money.

With the package approved on Monday night, Woods said ads will be placed in the next edition of the Royal Gazette, which will come out on Wednesday.

Woods said he believes the city will meet the deadline to have the pension changes in front of the full legislature by June 8, which is expected to be inthe final week of the spring sitting.

Saint Johns pension plan is a part of a provincial law so any changes must be approved by the legislative assembly.

The controversial changes to the pension plan have been opposed by local union officials.