The City of Regina and the Pension & Benefits Committee have reached a negotiated agreement on the Civic Employees’ Benefit and Superannuation Plan.
The amended deal protects the defined benefit nature of the plan and honours the original signed letter of intent.
We will need the support of the Superintendent of Pensions and approval of Cabinet to receive the solvency and deficit relief that we need to be in compliance with the Pension and Benefits Act. The Pension and Benefits Committee and the City requested that the Superintendent extend the deadline for filing submissions until December 5, so they can submit a joint proposal to the Superintendent. The Superintendent has granted the request for an extension, and the joint proposal will be submitted this week.
You may have questions about the deal. Here are some frequently asked questions:
How will the deficit get paid off?
In order to pay off the deficit, both employees and employers will make special contributions. Payments will be made with a 60/40 split, with the employer contributing 60% of the deficit, and employees making up the remaining 40%.
What will the contribution rates be?
Beginning July 1, 2015, contributions will include special payments to reduce the deficit.
The deficit will be paid by both employers (60%) and employees (40%).
According to the current valuation figures, employers will pay contribution rates of 10.9% of salary, and employees will pay 9.8% of salary. Current rates are 10.35% of salary for both employers and employees.
What if there is another deficit while we are paying off this one?
In the unlikely event there is a new deficit while we are paying off the current deficit, contribution rates will increase equally until they reach 12.1% for the employers and 11% for the employees.
If the combined required contributions, due to a future deficit, reach a total combined contribution rate between 23.1% and 24.1%, it will be paid 67% by temporary contribution increases and 33% by temporary benefit reductions, to be determined by the Sponsors Board.
- Temporary benefit reductions shall be reinstated at the earliest date that does not require rates to go beyond 23.1%.
If the combined required contributions, due to a new deficit, reach a total combined rate above 24.1%, it will be paid 50% through temporary contribution increases and 50% through temporary benefit reductions.
- Temporary benefit reductions will be restored at the earliest date that does not require rates to go beyond 24.1%.
I hear there are benefit reductions as part of this deal. How will this impact me?
As with the original letter of intent, the amended deal includes a 25% reduction in benefits.
It permanently eliminates existing guarantees of inflation protection for future service.
It permanently discontinues the inclusion of overtime pay as pensionable earnings.
It adjusts the earnings upon which future base benefits are calculated; a change from best three years to best five years.
It increases the age and service levels needed (on future pensionable service) to gain eligibility for unreduced early retirement pension, changing the rule of 80 to 85.
- There will be a grandfathering period of three years from implementation. Persons who retire or qualify for an unreduced pension in this period will not have the amendments apply to any post 2014 service.
*For further clarity, past service will not be affected by these benefit reductions.
Will we get back any of the benefits we lost?
The agreement allows the Sponsors Board to determine any benefit improvements, once there is a surplus. The Sponsors Board may consider restoring benefits retroactively.
What will happen in the case of future deficits?
In the event of another deficit once our current deficit is paid off, there is a plan in place to ensure timely decision making, which includes temporary contribution increases and temporary benefit reductions.
Contributions would increase to 10.5% for the employers and 10.5 % for the employees.
If contributions were required to exceed a combined total rate of more than 21%, then any further deficit would be paid 66% by temporary contribution increases and 33% through temporary benefit reductions.
- Temporary benefit reductions would be restored on the earliest date that combined contributions would not exceed 21%.
If contributions were required to exceed a combined rate above 22%, they would be paid through temporary contribution increases of 50% of the excess rate and temporary benefit reductions of 50% of the excess rate.
- Temporary benefit reductions would be restored on the earliest date that combined contributions do not exceed 22%.
What is our governance structure?
The new governance structure repeals the bylaw and removes decision making from the City and the Pension and Benefits Committee (PBC).
A new Sponsors Board is created. It, along with the administrative board, will govern the plan.
The new Sponsors Board will be made up of seven employee representatives and seven employer representatives. Permanent representation will be reflective of plan membership.
The new Sponsors Board will be responsible for amendments to the plan; if there is a deadlock a, fifteenth member will resolve the dispute.
What can I do now?
Please contact your MLA and ask him or her to ensure that the plan is not cancelled and receives solvency relief.
Regina Coronation Park Hon. Mark Docherty email@example.com
Regina Northeast Hon. Kevin Doherty firstname.lastname@example.org
Regina South Hon. Bill Hutchinson email@example.com
Regina Dewdney Mr. Gene Makowsky firstname.lastname@example.org
Regina Douglas Park Mr. Russ Marchuk email@example.com
Centre Mr. Warren McCall firstname.lastname@example.org
Regina Lakeview Mr. John Nilson email@example.com
Valley Ms. Laura Ross firstname.lastname@example.org
Regina Walsh Acres Mr. Warren Steinley email@example.com
Regina Wascana Plains Hon. Christine Tell firstname.lastname@example.org
Regina Rosemont Mr. Trent Wotherspoon email@example.com
Regina Composite Map Constituencies