By James Portside
January 15th, 2025
BURLINGTON, ON
When council salaries were reported in 2024 Councillor Sharman went to great lengths to explain why he was the lowest-paid councillor. For people under the age of 71, the city and the employee make payments to the OMERs defined benefit pension plan. For employees aged 71 and older OMERs won’t accept pension contributions. Councillor Sharman was not receiving the city contribution to his pension plan making him the lowest-paid councillor in terms of salary and benefits.
We know councillors make over $66,600 so, at least for the youngsters, the city and the employee both contribute 14.6% of their salaries to the OMERs plan.
Councillor Shawna Stolte
Councillor Stolte said she had spoken to four private-sector human resources experts and was surprised to find that this problem was not common in the private sector.
I recently had the opportunity to speak with a retired civil servant on this subject. I learned that defined benefit plans started in the public sector about the same time the auto workers and other unions in the private sector started receiving these plans.
Public sector employees felt defined benefit plans would become the norm. As we now know, these plans are unaffordable for any private sector company. GM, Ford and others were forced to abandon these plans.
The death of the Defined Benefit pension – link to https://www.hrreporter.com/news/hr-news/the-death-of-the-db-pension/312335
In 2009 “GM Canada has 34,000 retirees and 14,000 active employees.“ the model proved to be unsustainable. Newer competitors, like Honda in Alliston, simply did not have these “legacy costs”.
In the public sector, where concepts like competition don’t exist and bankruptcies rarely occur, the inflation-protected defined benefit pension plan lives on. If there is a shortfall in the pension fund taxpayers have the privilege of covering it.
I hope Councillor Stolte learned that people who work in the private sector, at least those with any pension plan at all, only have access to defined contribution pension plans.
What surprised me the most about this council debate was how much staff time must have gone into researching options. I wonder if the internal costs exceeded the roughly $16,000 Councillor Sharman will receive in retroactive pay.
Councillor Sharman, as a retired executive from Nortel, should have his retirement well in hand. While equal pay for equal work is an important concept, I hope Councillor Sharman finds a worthwhile charity for his retroactive payment.
Councillor Angelo Bentivegna is believed to come under the same rule.
James Porthouse is a retired small businessman who lives in Burlington.
I’m not sure what the point of this article might be – other than an example of the very tiresome whine of many private sector individuals about the lazy, insulated and pampered public sector. People make choices James – if they are in a position to do so – and the public sector, where salaries are less but long-term benefits greater, appeals to many talented individuals. Many, including myself, did service in both sectors. My stints in the private sector were financially much more rewarding but boring as hell. I agree that indexed, defined benefit pensions are no longer economically feasible – but don’t you wish you had one? I’m loving mine.
According to the Fraser Institute 81.9% of government workers in Ontario are
covered by a registered pension plan, compared to 25% of private-sector workers. Of those covered by a registered pension plan,
94.7% of government workers enjoyed a defined benefit pension compared to 41.5%. The gap has become enormous and governments need to take a serious look at the long term sustainability of tax payers ability to continue to fund defined benefit pensions.
The room they all live in is nothing like ours, how quickly people who gain power forget their past lives. (In 2009, Nortel filed for bankruptcy protection in Canada and the United States, triggering a 79% decline in its corporate stock price. The bankruptcy case was the largest in Canadian history and left pensioners, shareholders, and former employees with enormous losses.) On a gut feeling alone, I declined to invest in this company, many others were enticed to do so and lost.
On another note, and without even doing any research, maybe James knows, are government positions predominantly top-heavy?
Take a walk through the Provincial Government organization and see what you think.
https://www.infogo.gov.on.ca
This directory and organizational “map” has been in place for over 20 years. In this context, it’s both telling and disappointing that the ‘open and transparent’ City of Burlington doesn’t even have a staff listing. High time they started to walk the talk.