City denied request to approve contribution rate increase
The Canadian Federation of Independent Business (CFIB) is applauding the decision by the City of Regina to deny a request to approve contribution rate increases to the city’s employee pension plan and urging all levels of governments to follow suit.
"The proposed increase would have cost taxpayers and the City of Regina alone an estimated $3.8 million or the equivalent of a 2.72-per-cent property tax hike," said CFIB's president, Catherine Swift. "Small business owners, as property taxpayers, are pleased the city is finally taking action on this unsustainable plan that is underfunded by $238 million."
The city is also examining and pursuing several changes to the current pension plan, including reducing future benefits and introducing a Target Benefit type plan for new plan members to cap future liabilities for the city, taxpayers and employees.
"While these changes are long overdue, they are important first steps and solutions to an enormous problem but it's what they stand for that are most important — the need for reform and the courage to bring it about," said Virginia Labbie, CFIB's senior policy analyst for Saskatchewan and Agri-business.
With pension liabilities for federal civil servants now estimated at $200 billion and countless other cities and provincial governments facing underfunded public sector pensions, the time is now for public sector pension reform across the board, said CFIB.
"We are not calling for changes to past benefits that have already been earned," said Swift. "However, we are calling on governments to reform public sector plans along the lines of what is happening in many private sector plans — reducing benefits and converting defined benefit plans to defined contribution plans. These are necessary steps in striking a better balance between taxpayers and public sector employees."
