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Group proposes municipal pension cap

By Heather Abrey
Kitchener Post staff

An advocacy group called Fair Pensions for All wants to cap pension payouts for municipal workers in order to control increasing costs and shortfalls in the municipal pension program.

Bill Tufts, a representative of the group, spoke to city council Monday night at a public input session for the 2013 budget.

“What we’re advocating for is pensions that in the long-term are fair, pensions that in the long-term are sustainable,” said Tufts. “We’re afraid that pensions that are offered to public sector employees at this time are not sustainable.”

Employees of municipalities across Ontario receive their pension through the Ontario Municipal Employees Retirement System (OMERS), which is facing a nearly $10-billion shortfall at the end of this year, according to Tufts. In 2008, the shortfall was $278 million.

The opinion of Fair Pensions for All, according to Tufts, is that the city has overcompensated employees, raising salaries, wages and benefits four times faster than the consumer price index (CPI).

“If the city had maintained total compensation — which includes salaries, wages and pensions — at the same level of CPI, the expense today would be $41 million a year less than it is today and, since 2002, the accumulated, what we consider overcompensation relative to CPI, is $198 million,” he said.

Fair Pensions for All is advocating for a cap on pension payouts for municipal employees. They believe limiting payouts to a median or average income of taxpayers would be more sustainable, but still fair, according to Tufts.

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