Council pension plan called too rich
Public share almost five times higher in Calgary than in Edmonton, watchdog says
Coun. Jeromy Farkas says he has no regrets opting out of council’s pension plan, even after learning Calgary councillors receive nearly five times the compensation of their Edmonton counterparts.
The Canadian Taxpayers Federation (CTF) released documents Friday showing a large gap between how pensions are paid out in Calgary and Edmonton.
Between 2007 and 2016, Edmontonians spent $1.3 million for costs related to retirement benefits for its council, while documents show Calgary taxpayers were on the hook for more than $6.1 million in councillor pension benefits over the same period.
The CTF is calling on Calgary council to adopt a pension plan more similar to Edmonton’s, while letting councillors keep the benefits they’ve earned to date.
Farkas said he would be in favour of the change and wants an independent citizen committee to review council’s pension plan. He says copying Edmonton’s plan would be “much more fair for the taxpayers.
“I think that council, to be clear, deserves a pension, just one that’s not so lucrative,” Farkas said.
The only councillor not in the pension plan, Farkas said a seat on council “should be a public service, it shouldn’t be a career.” He said his intent in opting out was not to go after other councillors, but to give taxpayers a break from “bailing out” the pension program.
From 2007 to 2016, taxpayers in Calgary contributed $6.1 million to council pensions, while councillors themselves put in around $1.2 million.
“Every single year, Calgary taxpayers have had to pay more than double than what Edmonton councillors have received,” said Colin Craig, Alberta director of the CTF. “So even without the spikes, it’s a very generous situation and that’s one of the reasons why we’re calling for reform because it’s just too costly.”
Craig said the gap between the pension plans comes down to how they are structured.
The CTF said councillors in Calgary contribute nine per cent to a defined-benefit pension — providing guaranteed payouts throughout their retirement — with the city ’s taxpayers contributing more than twice that number at 18.64 per cent of pensionable earnings. The mayor also qualifies for an extra level of benefits.
Because Calgary councillors are given a guaranteed payout, the CTF said the city “has made several balloon payments” at the cost of the taxpayer “to make sure the plan has had enough money.”
Edmonton, on the other hand, offers its council an 11-per-cent contribution or a 12-per-cent contribution toward a definedcontribution pension plan.
Coun. Joe Magliocca’s proposal to put term limits on council was defeated last week with Magliocca saying term limits could help reduce costs to the taxpayer by limiting the amount of pensionable earnings and removing the transition allowance.
“You get your little pension as a token of appreciation and basically you have no transition allowance,” Magliocca said about the proposal, which was shot down in a 11-4 vote. “It’s very, very minimal and that would have worked out ideal. Unfortunately, the rest of my councillors did not support me on that.”
Council did say it will ask the province to amend the law to require councillors who intend to run for provincial and federal office to resign from city council and forfeit any transition allowance.
Coun. Ray Jones, Calgary’s longest-sitting councillor, said council’s compensation is chosen by a committee and the current plan “is what it is.”
“This comes up every four years,” he said. “We don’t make decisions for ourselves, we make decisions for the upcoming council coming in.”
Jones said the transition allowance offers outgoing councillors some security because they don’t pay in to employment insurance and the pensions max out potential RRSP contributions.
I think that council, to be clear, deserves a pension, just one that’s not so lucrative.