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City ensures future safety of pensions

Pension plans are in place to help assure people of some kind of financial support once they take retirement from their jobs, and it can be tricky at times if it turns out the funds aren’t fully supported.

Pension plans are in place to help assure people of some kind of financial support once they take retirement from their jobs, and it can be tricky at times if it turns out the funds aren’t fully supported.
There have been instances where pension plans have gone bankrupt, and those enrolled in them have lost everything, in spite of years of paying into it with a portion of their hard-earned income.
Even the federally-administered Canada Pension Plan, which every worker across Canada has to contribute to out of their earnings, has been coming under stress as the Baby Boomers generation moves into their retirement years.
Even though they have all been paying into it for all the years they’ve worked, there will come a point where there are more people drawing from it than are paying into it, and if it isn’t administered properly with good investment plans, the money may not be there when upcoming generations reach their own retirement age.
The City of Weyburn ran into issues with their own pension plan about a decade ago, and discussions began in 2007 over the costs of maintaining it, as there were unfunded liabilities requiring the city to pay a lot of money into it over and above the deductions the employees were already contributing from their paycheques.
The decision was made in March of 2016 to wind down the city’s pension plan, and have all of the city’s employees go under the Municipal Employees Pension Plan, or MEPP. This took effect as of Jan. 1 of this year.
As the unfunded liabilities accumulated, the city found that to wind down the pension plan now will cost the city $8.5 million — a hefty price indeed, but in the long run it should save the city money. As council was told, the annual cost of deficit payments to keep the city pension plan going was getting close to $500,000 a year.
With city workers now under MEPP, these deficit payments are no longer required, which will be a relief to the city’s annual budget going forward. This will impact 104 city employees who are actively working right now, 52 pensioners or survivors, and nine individuals who no longer work for the city but still have a city pension.
The end result for the city’s employees will be a pension plan that will have better benefits than they had before, and it will not continue to be an increasing drain for the city taxpayers to support. The federal government would do well to take a hard look at what’s needed to support the CPP before it goes broke.