The Canadian Taxpayers Federation is applauding The City of Red Deer for ending third pensions for future civic employees. (rdnewsNOW file photo)

By Troy Gillard

major cost to taxpayers, federation says

Red Deer applauded for ending third pension for future civic employees

Nov 13, 2020 | 11:07 AM

Thousands of city employees in municipalities across Alberta are eligible for second or third pensions when they retire, costing taxpayers millions according to a new report by the Canadian Taxpayers Federation (CTF).

Through freedom of information requests, the CTF found that thousands of city employees in municipalities with over 30,000 residents are eligible to receive two or three pension upon their retirement.

Those second and third pensions cost taxpayers $24.8 million in 2019, according to the CTF report.

“For the vast majority of Albertans working outside of government, we don’t even have workplace pensions,” said Franco Terrazzano, Alberta director for the CTF.

“I think it’s really crazy to think that while so many people are struggling, so many families are struggling, so many businesses are just struggling to keep their doors open, taxpayers in Alberta are paying into second and third pensions for thousands of city employees across the province.”

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Terrazzano says the CTF is asking city mayors and councillors to “do the right thing” and end what he calls these “golden perks”.

He said there are many reasons taxpayers should care about this.

“It’s costing us a lot of money, In 2019, it cost us nearly $25-million across the province for the second and third pensions, and that was just an annual cost, so this is a cost that’s hitting us every single year,” he said.

“Besides just the cost of these second and third pensions, it’s just not fair. It’s not fair for the many Albertans outside of government who have been struggling not just for a few months, but really for the last five years. These are types of perks that really should have never been put into place in the first instance.”

He suggested that councils needing to find any savings should look at cutting the second and third pension options.

“We can’t be asking struggling taxpayers to be paying more money for government employees to get not just one, but second or third pensions.”

A break-down of pensions per different municipalities in 2019. (Source: Canadian Taxpayers Federation)

“There’s a number of cities that are offering not just one and not just two pensions, but even three pensions. You look at Calgary; [they’re] offering its employees three pensions. Lethbridge, for example, you have more than 150 employees that were set to receive two pensions, then you have 11 employees that are in the triple-pension plug,” Terrazzano said.

He added one city of note is Red Deer.

“While they have employees that are set to receive three pensions when they retire, they actually ended that third pension for future employees, so it can be done,” Terrazzano suggested. “We can see cities scale back the golden perks and really, we need to see all cities across Alberta looking to find savings and looking at these unfair perks and putting an end to them.”

Terrazzano did note, however, there are still many City of Red Deer employees that will be set to receive a second pension when most Albertans outside of government don’t receive a workplace pension.

The first pension available is the Local Authorities Pension Plan (LAPP), while the second is the APEX Supplementary Pension Plan. That is the most common second pension plan and tops up the Local Authorities plan.

Calgary and Edmonton are not included within the APEX plan, but both municipalities offer their own top-ups.

The third pension is the Overcap Supplementary Executive Retirement Program (MuniSerp).

The CTF says this program is 100 percent funded by taxpayers and supplements the LAPP and APEX pension plans. The City of Calgary offers a similar plan.

The full report by the Canadian Taxpayers Federation is available here.

(Story written with file from Justin Goulet – Lethbridge News Now)