News Release
Province Treating Municipal Pension Plans Differently From Its Own
(Wednesday, June 7/06)-- The Halifax Regional Municipality’s Pension Committee is continuing to press the Nova Scotia government to treat its fund in the same way in which it treats its own.
Provincial pension legislation requires the HRM Pension Plan to “assume” that it is being wound up on December 31, 2006. However, the HRM Committee believes this is an unreasonable assumption, since HRM has a low probability of going bankrupt and it basically has the same credit rating as the province. In addition, the Province of Nova Scotia’s own pension plan does not adhere to the same onerous funding rules that apply to the HRM Pension Plan.
During the past two years, the HRM Pension Committee has asked the Government of Nova Scotia to exempt the HRM Pension Plan from the funding rules on the grounds that current rules are unreasonable and unfair. However, the province has not acted upon the request.
“This will result in increased contributions of approximately $65 million in 2007 and $165 million over the next five years,” said Nigel Field, Co-Chair of the HRM Pension Committee. “Since contributions are shared equally by the employer and participating employees, the money will have to come from employees, the employer, and the taxpayers of HRM.”.
Mr. Field said “Plan members are feeling the pain. Current employees are paying approximately 10.4% of their payroll into the plan. This is projected to increase to 15% in 2007, unless the funding rules are modified. Pensioners have not received an increase in a long time. Taxpayers will likely see increased taxes and/or a reduction in services in order for HRM to comply with the province’s pension regulations.”
Changes have been made to pension legislation in other provinces, such as in New Brunswick, to exempt municipal pension plans from funding rules.
The HRM Pension Committee said the province has provided no rationale for not granting the exemption and its members believe that HRM, participating employees, retirees and residents of HRM deserve an answer.
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Terri Troy
Chief Executive Officer
HRM Pension Plan
902-490-3297
