Moncton, November 22, 2011 - In a letter addressed to Saint John Council, the Canadian Federation of Independent Business (CFIB) applauded the initial measures taken to tackle deficiencies in the city's pension plan that have put serious pressures on its operating budget.
"I want to acknowledge the leadership it took to propose a suspension of annual indexation and the removal of overtime pay from pensionable earnings within the City of Saint John pension plan," Catherine Swift, president of CFIB stated in her letter. "While we do not expect this to completely solve the long-term issues associated with the plan, these courageous first steps are vital in dealing with the plan's tremendous deficit which would have been forced on Saint John's families and businesses through significant property tax hikes."
While some provisions will undoubtedly help to address the immediate shortfall, CFIB continues to be concerned by the Defined Benefit (DB) feature that guarantees a fixed return with no assurance that it will be covered many years out. This very risk is what has placed so many taxpayer-funded pension plans in a critically underfunded position.
"The decision to move forward on pension reform should be a call to action for other cities and all levels of government, declared Swift. "We will continue to urge government leaders to make the tough decisions in order to bring affordability, sustainability, cost-certainty and fairness to public sector plans.
To set up an interview with Catherine Swift or for further information contact Meghan Carrington or Gisele Lumsden at 416-222-8022 or via [email protected]
As Canada's largest association of small- and medium-sized businesses, CFIB is Powered by EntrepreneursTM. Established in 1971, CFIB takes direction from more than 108,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.