Changes to St. John's pension plan pass without debate

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Josh Pennell
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Coun. Danny Breen

Changes to the pension plan for St. John’s city councillors passed unanimously and without debate during Monday night’s council meeting.

In a past meeting, council had agreed unanimously to review the current plan that existed for elected members and address the fact that it was non-contributory.

Without any contribution from elected members, the current plan saw councillors getting 20 per cent of their salary after two terms, 40 per cent after three terms and 60 per cent after four terms or more.

Coun. Danny Breen, who also chairs the finance and administration committee — said at Monday’s meeting that the pension plan had been in place for many years and had not evolved with changing pension plans in Canada.

”I am pleased tonight to present the by-law ammendments required to implement the changes to this plan recommended by the finance committee,” said Breen.

The consulting company Morneau Shepell advised the finance and administration committee on how to accomplish its two goals.

Breen said the main purpose of the pension review was to look at changes necessary to make the plan contributory.

The secondary purpose was to determine if the current plan was the most appropriate for councillors.

The recommendations presented to council Monday stated that any councillors elected in the future will get six per cent of their salary to be invested in an RRSP. People currently sitting on council will have a one-time option on Oct. 7 of this year to remain in the existing pension plan or transfer to this new arrangement.

If they stay in the old pension plan, they will start to pay six per cent of their salary into it.

Those choosing to transfer will receive no credit for service earned under the current pension plan, and no option to transfer back to the current pension plan.

Breen pointed out that in this way, the old pension plan would eventually be phased out as no new councillors would be offered it.

“Aside from the need for councillors to contribute to their pension plan, it also provides for an orderly and equitable transition to a new pension arrangement,” he said.

The changes to the pension by-law passed without comment from any other councillors.

 

josh.pennell@thetelegram.com

 

This is a corrected version.

Geographic location: St. John's, Canada

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