Ontario taxpayers take the hit: Liberals stalling...
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Aug 06, 2014  |  Vote 0    0

Ontario taxpayers take the hit: Liberals stalling on efforts to reduce gold-plated hydro pensions, Tories charge

A Liberal vow to change the “generous, expensive and inflexible” pension plans for Ontario’s electricity sector unions is not being done, Progressive Conservatives charge

OurWindsor.Ca

The Liberal government is stalling on promises to scale back gold-plated pensions for some hydro sector workers in the wake of a new report critical of the juicy payouts, the Progressive Conservatives charged Tuesday.

A 45-page study into controversial pensions at Hydro One, Ontario Power Generation and two other agencies recommends drastically cutting employer contributions within five years — something the Liberals called for in their 2012 budget, says Conservative finance critic Vic Fedeli.

“Here we are two years later and they haven’t made one change,” he told the Star, noting new contracts have been negotiated with unionized workers at the agencies in the meantime.

“It’s about the big talk but not backing it up.”

In his report to the cash-strapped government — dated March 18 but not released until Friday on the eve of the long weekend — former Ontario Teachers’ Pension Plan head Jim Leech found that in 2012 the agencies paid almost $6 into the retirement schemes for every $1 employees contributed.

Leech recommended getting the contribution ratio to 50/50 within five years, exactly what the 2012 budget mentioned as part of efforts to “improve the sustainability and efficiency of pension plans.”

Hydro One said it has made “significant progress” in agreements with unionized staff and management in efforts to boost employee contributions — which had been in the 5:1 range — by the spring of 2016.

“Including management and all represented staff, Hydro One will achieve, on average, a ratio of 2 to 1 in this same time period,” spokesman Daffyd Roderick said in a statement.

Premier Kathleen Wynne was not tipping her hand on the new report, telling reporters Tuesday “you know we’re looking at it” and insisting “there was no plot in terms of the timing.”

That was a reference to Conservative and New Democrat concerns the Leech report was kept secret until after the June 12 election in which Wynne won a majority government.

Wynne was more specific about her intentions last December after Leech was appointed and Auditor General Bonnie Lysyk sounded the alarm about a “very generous” pension plan at OPG contributing to rising electricity bills.

“That’s why we need to put some more controls in place,” the premier said at the time.

Any changes will need to be negotiated between the agencies and unions representing their staff, Leech noted.

“It is not clear that, given the dynamics of collective bargaining at these agencies, such plan design changes can be made to affect future benefits,” he warned.

“However, for these plans to be sustainable in the long term, future benefits must be part of negotiated changes.”

The four plans now have 18,000 active members and 19,000 retired and deferred members.

It’s high time the government took action because two-thirds of Ontarians don’t have workplace pension plans and yet are paying for generous ones at OPG, Hydro One, the Electrical Safety Authority and Independent Electricity System Operator, said Fedeli (Nipissing).

“The bulk of the citizenry doesn’t enjoy anything like this. These are the kinds of things that infuriate people. This will affect your hydro rates.”

Power Workers Union and Society of Energy Professionals would not provide spokespersons for comment on the report but the latter emailed a statement to the Star.

“The Society of Energy Professionals has always been interested in the sustainability of our pension plans — our members’ retirements depend on that. That’s why in recent years we negotiated changes to our members’ contributions to their plans as a normal part of collective bargaining. The Society will review Mr. Leech’s report and continue to work with our employers at the bargaining table.”

Leech said the “base pension” at OPG, with the other three plans having similar characteristics is about 52 per cent of the cost with the rest coming from ancillary benefits like indexing to inflation, bridging and early retirement subsidies, and the maximum survivor benefits allowed under the Income Tax Act.

“No single change to the plans would make them sustainable over time. Multiple levers are required: indexation, bridge benefits and early retirement subsidies are each expensive elements of the plans that need to be addressed,” he wrote.

“Compared to other public-sector pension plans, the DB (defined benefit) plans in the electricity agencies are generous, expensive and inflexible. They generally require lower contributions from employees, while providing substantial benefits.”

Toronto Star

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(1) Comment

By Hadenoughyet | AUGUST 06, 2014 09:09 AM
Of course the liberals are stalling on scaling back pensions, they are trying to minimize labour disruptions. By doing this they are plunging us even further into debt - WAKE up boys and girls, this public sector BS needs to be taken care of sooner or later. Regardless of when it happens strikes will happen, the public will be inconvenienced, and the tensions between public and privet will grow exponentially. Make NO mistake, the growing tensions is a good thing..........Once citizens reach their breaking point and stand up for ourselves and say NO MORE, we can begin to return Ontario to the once prosperous province we were with a SUSTAINABLE public sector.
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