Civic pension plan back on track

The resolution of the Regina civic pension plan crisis offers a rare example when the use of that hackneyed phrase “a win-win situation” is entirely justified.

The plan’s current deficit of about $224 million will be paid off over the next 20 years through 60 per cent contributions from employers and 40 per cent from employees.

This and other changes a) safeguards pensions for the plan’s 3,900 members and b) protects taxpayers from the impact of any future deficit. That’s a “win-win” in our book.

Of course, no one can guarantee the plan won’t fall into deficit during some future fiscal crisis, but if it does it will be addressed through temporary contribution increases and benefit reductions — not a massive taxpayer bailout, as some once feared.

Yesterday’s announcement that the provincial government will amend regulations to bring the revised plan into compliance with its pensions legislation was the final step in a long process.

Little wonder it was described as “a good result for everyone involved” by Leah Fichter, deputy superintendent of pensions for the province’s Financial and Consumer Affairs Authority.

It was also a good result for Fichter, who lit a fire under employers and employees last July when she issued a Nov. 30 deadline for them to resolve protracted negotiations that seemed to be going nowhere. Fichter warned she might terminate the plan if no ideas to save it were produced.

Little more than a week before her deadline expired, a marathon bargaining session produced what three years of prior wrangling had failed to deliver — a viable solution that met with Fichter’s approval. Yesterday, the provincial government agreed to the deal.

The civic pension plan fell into deficit as a result of the 2008-09 global financial crisis, which hurt many defined pension plans. When city council rejected the idea of a big hike in contributions by employers and workers in 2011 to address the deficit, which at one point was close to $300 million, the plan became “non-compliant” with Saskatchewan pension legislation.

The plan covers city workers and pensioners and some past and present employees of Buffalo Pound Water Treatment Plant, Regina Board of Education, Regina Public Library and Regina Qu’Appelle Health Region. The average retiree collects $1,600 a month, or $20,000 a year from their pension, according to the Canadian Union of Public Employees.

Though there’s still some detail to be fine-tuned and a new governance structure to put in place by July, the civic pension plan is now on a solid foundation.

GOV’T WILL AMEND LAWS TO MAKE PLAN COMPLIANT.