Province approves pension plan changes

The Regina civic pension plan is no longer under threat of termination.

On Wednesday, the provincial government announced it has accepted recommendations for regulatory amendments that will let the proposed plan fly.

As a result, the potential to cancel the plan, which the Financial and Consumer Affairs Authority (FCAA) floated in July, is off the table as well.

“It’s a fantastic day, a long time coming, and we are very pleased that the pension is now safe for the future,” said Mayor Michael Fougere.

In December, the employer and employee groups involved in the plan submitted a joint solution to the FCAA to get the deficit-laden and non-compliant plan into line with provincial regulations. The FCAA approved the plan; however, it advised that regulatory changes would be required for the plan to pass.

The regulatory amendments include: Extending the period of time over which the city can pay off the plan’s unfunded liability; no longer requiring that solvency deficiencies be funded; and prohibiting reducing contribution rates until the unfunded liability is paid off.

Cabinet still needs to approve the amendments.

Deputy superintendent of pensions Leah Fichter said the FCAA went the amended regulations route instead of requiring Regina to comply with existing legislation because, “The contribution rate would have simply been too high if the regulations weren’t amended.”

Now, the city and other employers involved — Buffalo Pound Water Treatment Plant, Regina Board of Education, Regina Public Library and Regina Qu’Appelle Health Region — will have 20 years to pay off an estimated $224-million unfunded liability.

Meanwhile, retirees’ pensions and current employees’ accrued benefits come out unscathed.

“All parties should be very happy with what happened today,” said Fougere.

Taxpayers, too, will feel less of a burden as the city’s portion of the unfunded liability is paid out over a longer stretch, said Fougere.

“It’s another step,” said Pension and Benefits Committee chair Kirby Benning upon hearing about the regulatory amendments.

“That is a relief, that that part of the equation is done.”

Now, he said, the groups must work to get the plan in order by their July 1 target implementation date.

“I think the challenges are done,” Benning said. “Now, it’s just a bunch of work.”

A report in 2009 first described the pension plan’s state as “critical.”

In 2011, city council voted against contribution rate increases, which made the plan non-compliant with the Pension Benefits Act.

Two years later, the employer and employee groups signed off on a letter of intent to help the plan, but the FCAA said it needed more work.

In July, the FCAA announced the pension plan could be terminated if a solution wasn’t found, and by November the two parties had reached a memorandum of understanding.