General Updates and News

[someone123]

I'd guess that the problems are pretty complex and hard to cut back in an easy way. There seems to be an ever-growing legal and regulatory burden and corresponding bureaucracy. But many rules are there for a reason, so you have to understand what is going on to make true improvements (not Trump-style random cuts with unknown consequences).

It's similar with industry regulation. Canada has so many problems with a lack of competition but actually going in and adjusting things to make them better is hard.

I get the feeling there often isn't a lot of cost-benefit at the political level when new rules are added. It is very hard politically, for example, to decline to add some kind of safety measure (which may or may not work) to save money. It's very easy to say that a Bad Thing happened, so we Must Do Something.

[Keith P.]

Originally Posted by someone123

I get the feeling there often isn't a lot of cost-benefit at the political level when new rules are added. It is very hard politically, for example, to decline to add some kind of safety measure (which may or may not work) to save money. It's very easy to say that a Bad Thing happened, so we Must Do Something.

Well, that is how bureaucratic bloat and overreach happens. The bureaucracy exists, first and foremost, to both perpetuate and expand itself.

[Dartguard]

Originally Posted by Keith P.

Well, that is how bureaucratic bloat and overreach happens. The bureaucracy exists, first and foremost, to both perpetuate and expand itself.

The blob must eat.

[Colin May]

Originally Posted by Keith P.

They keep the indexing top secret, but my understanding is that they have indeed indexed benefits for the last several years.

HRM pension is not indexed and has never been indexed but staff and council do have the most expensive and most generous pension plan in Canada.
Staff also have a long service award, which when added to the pension and CPP gives a member an after tax income greater than when they worked.
The Long Service Award is paid through general revenue as RevCan does not allow a fund to be established.
The pension plan was in deficit for many years and is now in surplus and is considering a reduction in the level of contributions. For example police and fire pay 12% of basic earnings into the plan and may soon be reduced to 11%. Other contribution levels would see a contribution rate drop from circa 10% of basic earnings to 9%.
All details are on the HRM Pension website. As of a few months ago senior staff had not told Council of the probable reduction and the savings for employer and employees, which by my calculation would be circa $3-4 million for employer and $3-4 million for employees.
I spoke at a Budget meeting a few weeks ago and told them the details, and prior to that I also told Harbour East Community council but they all had puzzled looks on their faces......

[kzt79]

Originally Posted by Colin May

HRM pension is not indexed and has never been indexed but staff and council do have the most expensive and most generous pension plan in Canada.
Staff also have a long service award, which when added to the pension and CPP gives a member an after tax income greater than when they worked.
The Long Service Award is paid through general revenue as RevCan does not allow a fund to be established.
The pension plan was in deficit for many years and is now in surplus and is considering a reduction in the level of contributions. For example police and fire pay 12% of basic earnings into the plan and may soon be reduced to 11%. Other contribution levels would see a contribution rate drop from circa 10% of basic earnings to 9%.
All details are on the HRM Pension website. As of a few months ago senior staff had not told Council of the probable reduction and the savings for employer and employees, which by my calculation would be circa $3-4 million for employer and $3-4 million for employees.
I spoke at a Budget meeting a few weeks ago and told them the details, and prior to that I also told Harbour East Community council but they all had puzzled looks on their faces......

From the website, it appears increases are at their discretion. So there may well have been at least some degree of "indexing" in recent years - very good years to receive same!

I don't begrudge the beneficiaries, not at all. Pension (or lack thereof) is an important part of any compensation and everyone knows (or should know) the details of their own situation. Likewise, decision makers (and those who elect them) should be evaluating cost/benefit on an ongoing basis.

[Keith P.]

Originally Posted by kzt79

From the website, it appears increases are at their discretion. So there may well have been at least some degree of "indexing" in recent years - very good years to receive same!

I don't begrudge the beneficiaries, not at all. Pension (or lack thereof) is an important part of any compensation and everyone knows (or should know) the details of their own situation. Likewise, decision makers (and those who elect them) should be evaluating cost/benefit on an ongoing basis.

They make very clear on their website that indexing is not mandated but they have discretion to authorize it. My understanding is that during recent good times for the investment markets they have indeed provided that. Colin says otherwise though so we need some confirmation. It is odd that the HRM pension group never addresses this in their information provided on their website.

One thing they do discuss in certain materials online is how the structure of the plan allows some/many retirees to exceed their highest and final years salary while working once both the pension and CPP kicks in because unlike most other pensions, it is not harmonized with CPP. This strikes me as very unusual and reckless, and perhaps explains both the lack of guaranteed indexing (the Feds take the cake with that) and the required contribution level overall.

[Colin May]

Originally Posted by Keith P.

They make very clear on their website that indexing is not mandated but they have discretion to authorize it. My understanding is that during recent good times for the investment markets they have indeed provided that. Colin says otherwise though so we need some confirmation. It is odd that the HRM pension group never addresses this in their information provided on their website.

One thing they do discuss in certain materials online is how the structure of the plan allows some/many retirees to exceed their highest and final years salary while working once both the pension and CPP kicks in because unlike most other pensions, it is not harmonized with CPP. This strikes me as very unusual and reckless, and perhaps explains both the lack of guaranteed indexing (the Feds take the cake with that) and the required contribution level overall.

There has been no indexing of pensions. The plan was in deficit from day one because the City of Dartmouth had the most expensive and most generous plan ( always in deficit) and the other municipalities who became part of HRM had less generous plans. .The pension Cttee has looked at how to deal with the surplus and one union wants an increase in pension payments.
The rules re pension plans were less strict at the time of amalgamation and as the rules tightened the reality of the sustainability became a problem. The rules are so strict that there are very few private sector defined benefit pension plans. The banks closed their defined benefit plans to new employees some time ago and are all defined contribution.
This link provides easy to understand information re the plan and compares the HRM plan with what is available elsewhere in Canada...
https://cdn.halifax.ca/sites/default/files/documents/city-hall/regional-council/190115rc123pres.pdf page 8 is an easy guide to the subject

[kzt79]

Originally Posted by Keith P.

They make very clear on their website that indexing is not mandated but they have discretion to authorize it. My understanding is that during recent good times for the investment markets they have indeed provided that. Colin says otherwise though so we need some confirmation. It is odd that the HRM pension group never addresses this in their information provided on their website.

One thing they do discuss in certain materials online is how the structure of the plan allows some/many retirees to exceed their highest and final years salary while working once both the pension and CPP kicks in because unlike most other pensions, it is not harmonized with CPP. This strikes me as very unusual and reckless, and perhaps explains both the lack of guaranteed indexing (the Feds take the cake with that) and the required contribution level overall.

Agree full transparency would be nice. It should also be noted HRM pension is based on your best 3 (consecutive) years whereas many other plans are 5+. This obviously makes it easier to pump up your numbers for max HRM disbursements.

[kzt79]

Originally Posted by Colin May

There has been no indexing of pensions. The plan was in deficit from day one because the City of Dartmouth had the most expensive and most generous plan ( always in deficit) and the other municipalities who became part of HRM had less generous plans. .The pension Cttee has looked at how to deal with the surplus and one union wants an increase in pension payments.
The rules re pension plans were less strict at the time of amalgamation and as the rules tightened the reality of the sustainability became a problem. The rules are so strict that there are very few private sector defined benefit pension plans. The banks closed their defined benefit plans to new employees some time ago and are all defined contribution.
This link provides easy to understand information re the plan and compares the HRM plan with what is available elsewhere in Canada...
https://cdn.halifax.ca/sites/default/files/documents/city-hall/regional-council/190115rc123pres.pdf page 8 is an easy guide to the subject

It's still not really clear to me. Terminology aside, has there been an increase in the payout? Based on their statement that "indexing" (or whatever you want to call it) is ad hoc based on funding position, and as you note it is fully funded.

I did find this: "Starting 2026 (Jan 1): A new COLA rate of 2.61% per year is approved through 2030."

It would appear to me there is at least some provision for increasing payouts over time. The pension also offers very generous survivor benefits. Again, fully support those receiving these pensions and their good decision-making in choosing to work for the city.

[Patriots]

I don't have a problem with defined benefit pension plans (DBPs) either except when tax payers are funding. There are plenty of reasons why the private sector generally has moved toward defined contribution plans - one of them being the funding risk for the employer related to DBPs. Time for the public sector to get a reality check. I have more of a problem with how much we as taxpayers are paying labor costs for all levels of government. Not many would argue we are getting good bang for our buck.

[kzt79]

Originally Posted by Patriots

I don't have a problem with defined benefit pension plans (DBPs) either except when tax payers are funding. There are plenty of reasons why the private sector generally has moved toward defined contribution plans - one of them being the funding risk for the employer related to DBPs. Time for the public sector to get a reality check. I have more of a problem with how much we as taxpayers are paying labor costs for all levels of government. Not many would argue we are getting good bang for our buck.

This is the crux of the matter. We are paying an objectively heavy burden, with the total tax rate a Nova Scotian faces generally being near or at the top (depending on individual specifics) compared to any other province or state.

What do we get in return for these high taxes? Top notch healthcare? Do our children excel academically? Surely we have some of the best roads and transit systems...right? lol

Yes Quebec also has high taxes but at least they get something to show for it such as subsidized day care, tuition, and endless mobbed up roadwork.

Obviously this goes well into provincial and federal domains and of course there is no easy fix but the math does make you wonder. I'm sometimes surprised we have the people we do. Obviously no logical person would come to or remain in NS for financial reasons, with the possible exception of those "connected few" bellying up to the government trough. This kind of cronyism is somehow more accepted here.

[Colin May]

Originally Posted by kzt79

It's still not really clear to me. Terminology aside, has there been an increase in the payout? Based on their statement that "indexing" (or whatever you want to call it) is ad hoc based on funding position, and as you note it is fully funded.

I did find this: "Starting 2026 (Jan 1): A new COLA rate of 2.61% per year is approved through 2030."

It would appear to me there is at least some provision for increasing payouts over time. The pension also offers very generous survivor benefits. Again, fully support those receiving these pensions and their good decision-making in choosing to work for the city.

Where did you find the link to COLA. Any change in the pension plan requires more than 3 months notice and agreement of the employees and HRM.

[kzt79]

Originally Posted by Colin May

Where did you find the link to COLA. Any change in the pension plan requires more than 3 months notice and agreement of the employees and HRM.

My apologies that appears to be the NSPSPP. You are right, I can find no language around the HRM plan.

That said I find it difficult to believe there are no increases, as after decades the pension payouts would become vanishingly small - the opposite or reality where at least some employees actually enjoy increased after tax income in retirement than while they were working. Obviously there is (and should) be some mechanism for increasing the payouts over time, even if it doesn't march lockstep with CPI etc.

[Colin May]

Originally Posted by kzt79

My apologies that appears to be the NSPSPP. You are right, I can find no language around the HRM plan.

That said I find it difficult to believe there are no increases, as after decades the pension payouts would become vanishingly small - the opposite or reality where at least some employees actually enjoy increased after tax income in retirement than while they were working. Obviously there is (and should) be some mechanism for increasing the payouts over time, even if it doesn't march lockstep with CPI etc.

The pension payout for a retiree. stays the same throughout retirement regardless of surplus or deficit in the plan. The rate of contribution may rise or decline depending on the fiscal condition of the plan. A decline in the contribution rate would see more money in the pockets of employees as the present rate has caused problems when recruiting new employees as noted by an HRM employee who is quoted in Pension Cttee minutes. Obviously senior staff know of the problem but there is no indication that the Council has been briefed on the issue.

[Patriots]

For those of you in the know when it comes to government think tanks, have you ever heard of the City and/or NS considering a partnership with a private infrastructure firm/fund to relieve the government of their infrastructure cost burden?

[Colin May]

Originally Posted by Patriots

For those of you in the know when it comes to government think tanks, have you ever heard of the City and/or NS considering a partnership with a private infrastructure firm/fund to relieve the government of their infrastructure cost burden?

Such projects don't relieve a government of the burden as the agreement and the cost ends up on the balance sheet of the municipality or other level of government. Disclosure of such financial agreements is required, but 30 - 40 years ago such agreements would not be on the balance sheet, much like lack of disclosure of other financial obligations such as pension plans and long service awards. Cannot hide much these days because the rating agencies want full disclosure.

[Keith P.]

Defined benefit plans took a beating after the 2008 market meltdown as their assets are largely held in market securities. That led to extreme measures being taken by plan managers in the aftermath, such as for the NSPSSP, which had some draconian provisions put in by the NDP govt of the time. In the years since, the fund has rebounded remarkably however. Next year will be the first year where members will receive any increase of note in 10 years, but nothing approaching what would be required to make them whole after the last decade.

Applying private-sector pension principles to govt pensions make little sense. Those principles are designed to ensure that pension funds and hence members are protected in case the business they worked for goes bankrupt and disappears. That does not ever happen to government entities. In the past, it made sense for public sector pension plans to be more generous than those in the private sector since public sector salaries were generally less than private entities. That has changed in recent years, particularly for HRM and the Feds, though less so for PNS. Yet the same principles are still being applied.

[kzt79]

Originally Posted by Colin May

The pension payout for a retiree. stays the same throughout retirement regardless of surplus or deficit in the plan. The rate of contribution may rise or decline depending on the fiscal condition of the plan. A decline in the contribution rate would see more money in the pockets of employees as the present rate has caused problems when recruiting new employees as noted by an HRM employee who is quoted in Pension Cttee minutes. Obviously senior staff know of the problem but there is no indication that the Council has been briefed on the issue.

Thank you for this explanation. So someone could retire at 55 getting say $3K/month and at 85 they'd still be getting 3K/month.

[kzt79]

https://www.saltwire.com/nova-scotia/hal...mendments-building-supply-public-hearing

Hands tied, Halifax council approves minimum planning requirements to boost housing supply
Planning changes include new rules for ground-floor commercial space, short-term rentals and more

Good to see. I understand the appeal of ground floor commercial esp in core areas; presumably market forces should incent construction of this where there is real demand?

[Keith P.]

Originally Posted by kzt79

Thank you for this explanation. So someone could retire at 55 getting say $3K/month and at 85 they'd still be getting 3K/month.

Actually they would get more when they start collecting CPP since the HRM plan is not harmonized with that the way most plans are.