Yesterday at an event called ‘The Stark Realities of OMERS’ the Association of Municipalities of Ontario [AMO] and its pension arm, the Municipal Employer Pension Centre of Ontario [MEPCO], held a joint meeting to discuss the ongoing issues facing OMERS. We at Fair Pensions For All were humbled to be invited by the members of AMO to this event. It is clear that AMO through MEPCO, and Fair Pensions For All, share the same concerns about the finances of the municipal pension plan.
Member cities, towns and counties were told that the plan needs to be changed now. There are only three ways the plan can dig itself out of the current $10 billion shortfall. Two of these options are currently not working and in order to make the plan sustainable, OMERS must decrease benefits. Last year the plan attempted to address the shortfall with a return on investments of over 10% and increased employee contributions to a new record high, yet the shortfall still rose by almost $3 billion.
The plan's contribution rates have already risen to between 20% and 30% of an employee's pay. Municipal governments and taxpayers cannot afford to put any more money into the plan. With no other options available the cities were advised by MEPCO to decrease pension benefits. It is unfortunate that the pension fund is in this position but we at Fair Pensions For All agree with the recommendations of AMO and MEPCO and encourage OMERS members to help with the financial sustainability of the plan.
However, we do not believe that the advice from AMO and MEPCO will lead to a change in the OMERS pension plan. Do to a complicated management board, any pension changes can only pass with a two-thirds majority vote. On the board, the group representing the workers, is enough to block any changes from occurring. Because of this, we do not believe that the OMERS board will pass any changes to the plan and therefore Fair Pensions For All suggests that the provincial government create legislation that forces the necessary changes.
Sadly, at this meeting, the number one question that was asked by municipal representatives was: “ How do we get our city out of this plan”?
The attendee’s were told that currently the OMERS liability sits at $60 Billion and if the plan was shut down immediately, that number would grow to at least $100 Billion. That means that if the pension plan was wound up today, they would not have enough money to pay all the employee’s their guaranteed pension. In fact, they would be $40 Billion short!
We at Fair Pensions For All stand with AMO and MEPCO in their call for pension reform. To ensure the retirement security of our seniors we must deal with this problem today. To ignore this problem today is to create a bigger problem tomorrow.
For an interview contact:
Gareth Neilson, Director of Communications, 226-378-3508
Bill Tufts, Founder, 905-741-1904
Bill Tufts, Fair Pensions For All, founded in January 2009, our goal is to promote an honest and fair analysis of our pension system; to expose abuse and waste within the system; to develops and promote new ideas and concepts on pensions based on fairness for all.
We maintain that it is every Canadian’s right to receive sufficient income in retirement to afford an acceptable quality of life.
