Posted by Phil Andrews
We're exploring a media release issued surrounding pension issues purportedly faced by the City of Guelph. It was sent out by an activist group that is seeking public pension reform.
I have kept the element in the release as we received them - i.e. - all-caps and bolded bits. Here's the release:
Guelph's PENSION PICKLE : Why Guelph Taxpayers can expect double-digit tax increases.
New stats show a hidden $ 41.7 million tax bill
GUELPH: The group Fair Pensions For All has dropped a bombshell on City Council. FPFA is hard at work at what they expect to be the single largest challenge to City Council in the coming years - City employee pensions.
While it’s not the first time they have brought the issue front and centre, FPFA is ringing the alarm bells over the latest findings involving the Ontario Municipal Employees Retirement fund (OMERS). The pension fund is underfunded by billions, and Guelph taxpayers will be expected to pick up their share of the shortfall.
FPFA is a pension reform advocacy group that sees its job as educating Council and the Mayor on the urgency of the pension issue. Bill Tufts, founder of FPFA, says he has seen his share of blank faces.
“We have spoken to Councilors and Mayors throughout the province, and while they are starting to come around, clearly they are in the dark on the gravity of the crisis,“ he says. “The situation is staggering. Last year, despite $2.7 billion in contributions, the shortfall increased to $7.3 billion – up from only $4.5 billion the year before.”
Each city is responsible for pickling up their share of the pension shortfall. With 263,000 current municipal employees in the plan, this works out to a shortfall of $27,750 for each employee. The City of Guelph had 1,506 employees at the end of 2011. This makes Guelph's share of the shortfall $41.7 million rising to $51.5 million by year end.
Recently the Province launched a full review of the OMERS pension system in recognition of the burgeoning pension deficit. All municipalities were asked for input and to exchange dialogue. According to OMERS, nobody from Guelph has engaged them on the issue.
“We have sent emails to several members of council, including the Mayor. The prevailing opinion is that it’s a provincial problem. That is simply naïve and irresponsible.“ said Tufts. "The deficit will prove unsustainable, and is on track to being the big issue for our next civic election."
One of the challenges, as Tufts points out, is that City Councilors themselves are entitled to an OMERS pension, although not all city's participate. " it is estimated the top 10 paid employees of City Hall could be entitled to lifetime pension benefits of over 40.1 million dollars.“ Tufts said. “Does that seem reasonable in this economy?”
Bill Tufts, Founder of Fair Pensions For All and co-author of Pension Ponzi (Wiley & Sons) has studied other cities as well.
“Saint John, NB, is actually considering bankruptcy, Regina has a major problem, and Montreal is in trouble too,” he points out.
Tufts is hoping that individual conversations with Councilors will bring attention to the problem. “It’s not too late to fix things. It will take layoffs, and it will take pay cuts, but most of all, it will take the will of a concerned Council to fix the problem,“ he said.

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