By Colin Craig
Recently, the Canadian Taxpayers Federation took a closer look at city council’s pension plan. We wanted to see just how much it is costing Calgary taxpayers.
To do so, we opened up several of the city’s annual reports, and tracked two numbers – the amount of tax dollars that were put into council’s pension plan each year and the amount put in by council members themselves.
The numbers were stunning.
From 2007 to 2016, we calculated that taxpayers had to pay approximately $5.8 million for the city council pension plan. Oddly enough, city council members only put in $1.2 million.
If you do the math, that means that for every loonie put in by council members, taxpayers put in a five-dollar bill. The situation certainly defies the concept of “fair compensation” for council members – especially when you consider most people who work outside government don’t even have a workplace pension plan.
As we continued to examine council’s pension benefits, it became clear the situation is more complicated than we thought. Council actually has a second pension plan.
Although we scoured the city’s website for information and reports on the cost of city council’s second pension plan, we came up short. No luck. If the reports are public, we couldn’t find them. It would have been easy for the city to disclose the costs for the second pension plan in its annual report – along with the other pension numbers – but it didn’t.
We filed an information request with the city to obtain the data a month ago, but have yet to receive the details. Hopefully, the city releases this information before election day.
What we did find, however, is a city document that indicates council members don’t contribute a cent toward the second pension plan. The city document notes that taxpayers pay the “full cost” for the second pension plan. Thus, taxpayers have put in more than the aforementioned $5.8 million towards council’s pension benefits over the past decade. How much more? We won’t know until the city discloses details about the second pension plan.
If you’re wondering what Edmonton provides for its council, they don’t have the same type of costly pension plan. A citizens’ committee struck by the City of Edmonton a few years ago examined council compensation and concluded the type of pension plan that Calgary provides for its council wouldn’t be “appropriate” for their council.
A wise observer could note that Calgary’s council pension costs are a drop in the bucket when you consider the cost of providing pensions to all of the city’s employees. That’s true, but council can’t address that problem with a straight face until it first scales back its own pension plan.
To give you an idea of just how expensive the city staff pension plans are, back in 2007, taxpayers contributed $54 million to the main pension plan for city employees.
By 2016, spending on that pension plan had ballooned to $152 million; a 181 per cent increase. Needless to say, the situation is out of control. Taxpayers are getting soaked.
The solution to the costly pension situation at the City of Calgary is to first scale back council’s pension plan. Taxpayers should not have to put in more than a dollar for every dollar put in by council members. At the same time, council members should be switched into what’s known as a defined contribution pension plan. This would protect taxpayers from rapid cost increases in the future.
After that, council should enact these same changes for all city employees.
If you like the sound of this money-saving idea, why not ask your local candidate where they stand on the issue?
Colin Craig is the interim Alberta director for the Canadian Taxpayers Federation.