Incoming City of Red Deer managers will no longer benefit from lucrative “third-tier” pension contributions from the city.
But 15 existing managers who are already enrolled in the supplementary pension program will continue to stay on it.
After Monday’s city council meeting, City manager Allan Seabrooke said MuniSERP (Supplemental Executive Retirement Program) costs the city varying amounts annually, but likely averages about a $90,000 expenditure a year.
Although some councillors feared that ending the MuniSERP for new managers will mean the city will be unable to complete for “the best and brightest,” others saw it as a sign of the new economic reality.
MuniSERP allows the city to contribute money so a third party can invest it and use the proceeds to top up managerial pensions. Council was told it was implemented in 2003, during the boom years.
The pension plan overrides a contribution cap set by Revenue Canada, and adds a third tier to the pensions of managers that already benefit from the matching LAPP (Local Authority Pension Plan) and the APEX (Alberta Pension Executive Plan) programs, said Seabrooke.
Council was told MuniSERP was intended as a perk — to make working for the City of Red Deer more attractive to job candidates for top managerial positions.
Seabrooke said 17 city managers initially benefitted from from MuniSERP, but as two left their positions, it now applies to 15 managers who have essentially been grandfathered in to the program.
Councillors Dianne Wyntjes and Buck Buchanan felt the City of Red Deer needs to stay in step with other Alberta municipalities that continue to offer MuniSERP in order to get the best people in the job.
But Mayor Tara Veer and Coun. Lawrence Lee were among those who felt the city needs to face reality and recognize these are far from boom years.
Lee stressed this is not the time for retirees to be getting “$300,000, $400,000 or even $600,000 payouts.”
If the program is needed at some point in future, then council can always reconsider, said Veer.