If you’re worried about having enough retirement money, you could become a police officer or firefighter and receive a pension plan that contributes twice as much as other plans.
During its Aug. 26 regular meeting, city council gave three readings to a proposed bylaw to amend the City of Moose Jaw Pension Plan Bylaw to reflect changes made during the recent negotiation of collective bargaining agreements with police and fire unions, and the transfer of Downtown Facility and Fieldhouse Board (DFFH) employees to Spectra Group.
Council voted 4-2 on all three readings, with councillors Brian Swanson and Dawn Luhning opposed. Coun. Chris Warren was absent.
The bylaw amendment will return for official approval since it was not unanimously passed. Once approved, two original copies of the bylaw will be sent to the Canadian Revenue Agency and Saskatchewan Justice to register the plan amendment.
Background
The collective bargaining agreement signed this year between the Moose Jaw Board of Police Commissioners and the Moose Jaw Police Association union — covering 2017 to 2020 — increased pension contribution levels to nine per cent from 8.5 per cent. This means members and the employer each contribute nine per cent to members’ pension plans.
The new agreement also gives police a total pay increase of 9.4 per cent. The salary of a constable ranges from $69,208.55 to $106,357.12 to $123,330.53 based on 2017 public accounts.
Furthermore, the recent arbitration award between the municipality and the Moose Jaw Firefighters Association union increased pension contribution levels to 8.5 per cent from eight per cent. This means members and the employer each contribute 8.5 per cent to members’ pension plans.
The new agreement for firefighters is retroactive from 2015 to 2018 and gives them a total pay increase of 14.75 per cent. This means a first-class firefighter now makes $99,252, up from $85,764 five years ago.
Municipal employees with the DFFH have also been affected by changes to pension plans. City council dissolved the DFFH board on Aug. 15, 2018, and effective Sept. 3, 2019, DFFH employees will become employees of Spectra Group and will join that organization’s employer pension plan.
Meanwhile, members who are CUPE employees of the Board of Police Commissioners, who are out-of-scope municipal employees, who are municipal CUPE employees, or who are transit employees will receive pension contributions of 7.5 per cent.
Council discussion
City council did not have any input into the new collective bargaining contracts for the police or firefighters, said Swanson. He singled out the pension plan for the police as being “extremely generous.”
If officers make $100,000 a year, they will receive $9,000 in pension contributions annually, he continued. In comparison, some residents might have pension plans of three per cent or even nothing at all. Meanwhile, this creates a two- and even three-tier pension system among CUPE workers, police and fire personnel and other municipal employees, which Swanson did not favour.
“There comes point where we have to question, can we afford this? I think we reached that point a while ago,” he added.
Luhning echoed Swanson’s comments, noting she made similar comments on a private app council uses to communicate with each other.
She pointed out the pension contributions of 8.5 per cent and nine per cent are likely double compared to other defined contribution plans in the private sector and in government, which average between four and five per cent.
“These are unstainable. Something eventually is going to have to give. We just can’t afford these kinds of contributions ongoing and increasing at these levels year after year after year,” she added.
The next regular council meeting is Sept. 9.
