Police, city hall on collision course

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This article was published 24/10/2016 (2732 days ago), so information in it may no longer be current.

City hall is heading for a showdown with the police union over funding of the police pension plan as the two sides are about to begin bargaining a new contract.

Concerns over the cost of the city’s share of pension contributions prompted chief financial officer Mike Ruta to send a letter last week to the Winnipeg Police Association informing the union it wants to make changes to the plan in a bid to lighten the city’s obligations.

A union official said the administration appears to be deliberately misleading the public and members of council over the plan’s financial situation.

“This is all posturing on their part,” George Van Mackelbergh, vice-president of the association, said. “This pension plan is not in trouble. What we have is the city not wanting to pay their piece of the pie that they asked for.”

The union’s contract expires at the end of the year, and bargaining on a new collective agreement begins Monday. Van Mackelbergh said the pension issue will be part of the negotiations.

Ruta circulated an email Friday to all members of council informing them he will be contacting the police union “to present options in respect of more affordable and sustainable changes to the Plan.”

Ruta told councillors the city has paid out $290,000 since 2011 in a series of letters of credit to make up a projected solvency deficiency in the police pension plan. Going forward, Ruta said, city hall will be making annual contributions of $29.1 million to the plan, compared with the $13 million in contributions from the police rank and file.

Ruta’s letter comes as the Tory government is being pressed to address the stability of pension plans in Manitoba.

Premier Brian Pallister said Monday his government is reviewing the rules surrounding defined-benefit pension requirements.

Van Mackelbergh said Ruta’s email to councillors and the letter to the police association were deliberately timed to set the tone for bargaining.

“I think it’s a bit of a false narrative being created out of city hall,” Van Mackelbergh said.

Van Mackelbergh said current bylaws governing the pension plan were agreed to by both sides after the city was caught improperly using the plan surplus to cover its share of contributions. Through negotiations, he said, the city was allowed to continue to dip into the surplus, but in doing so, it assumed full responsibility to cover any plan shortfall.

“That’s what’s happening now,” Van Mackelbergh said. “They’re not going to tell you they drew $100 million out of that plan (surplus) over a number of years rather than put their own money into the plan, like our members have been doing every year. They chose not to, to use the surplus instead of contributing their eight per cent. Now that there’s a bit of a shortfall, they’re whining about it. This is all part of a signed agreement, and now they don’t want to do it.”

He said the $29-million payments the city is facing now is because of its decision to initially use a letter of credit to avoid making payments.

Van Mackelbergh said city officials rejected an offer in 2011 from the police association to increase the contribution of its members to 10 per cent for a period of time until the plan was determined to be solvent, with contribution levels returning back to eight per cent.

“There was no interest in the city then (for our offer),” he said. “So, there’s a little bit of sleight of hand you’re seeing, and it just happens when we’re about to start negotiations.

aldo.santin@freepress.mb.ca