On Retirement Allowances

So all of a sudden retirement allowances are in the news, despite this being something I have been working on for the better part of two years. Since it came up at committee on Tuesday, let’s take a look at the work that’s been going on.

At the July 23, 2018 Council meeting, I made an Administrative Inquiry asking about the retirement allowance, among other things. There was the potential, I thought, that retirement allowances may be in place to incentivize early retirement and possibly result in savings to the City. I asked specifically if this was something measured, if the program had been reviewed and when, and if Administration had any intention of reviewing the program without Council direction.

At the September 24, 2018 meeting, Administration responded to my request. Administration responded that they felt the retirement allowance had been in place since the 80s, was an important part of the benefit package to attract and retain staff, and that the program had been reviewed in 2010. They also stated that the City regularly monitors elements of its total reward package and expects that the retirement allowance would form part of any on-going or future review.

Not totally happy with the response I received from Administration, and with earlier discussion with our HR department, I brought forward a Motion Arising that was carried, stating:

“That Council direct Administration to engage an external Human Resources consultant that would report directly to Council, with a review of elements of the total compensation package of The City of Calgary employees.”

I followed up on this request with Administration indicating that the retirement allowance was the main component I was interested in. On February 12, 2019, a report presented at our Priorities and Finance Committee recommended that the practice of paying retirement allowances be reviewed.

After hearing nothing for several months, I followed up once again with Administration on this request. Frustrated with the lack of progress, I brought forward another notice of motion on April 29, 2019, essentially asking for what I had already asked for to be completed. The motion specifically asked to:

“…review the City’s practice of paying out the retirement allowance and the retirement vacation bonus, including if this practice should continue, if changes to this practice should be made, with regard for the current economic climate, competition with the private sector, and competition with other municipalities in attracting and retaining qualified talent, including legal concerns with enacting changes to or eliminating this practice and report directly to Council members.”

With budget adjustments looming and in the absence of a recommendation from Administration, I was prepared at the November 18, 2019 Council meeting to simply bring forward a notice of motion directing Administration to halt the practice of paying a retirement bonus by the end of 2020. After legal advice was presented to Council, I thought it may be best to give everyone a couple weeks to think this over and prepare a recommendation at the December 3, 2019 Priorities and Finance Committee to be presented to Council. This week the Priorities and Finance Committee voted 6-4 to recommend that Council direct Administration to end the retirement allowance no later than 2021 December 31. While this is a little later than I had initially proposed, I understand that it may provide the City with a cleaner end of the program. We as Council will be able to debate and hopefully finally approve this motion at Council on December 16.

While I’m glad that this issue I brought forward about a year and a half ago appears it will finally be dealt with, I can’t help but feel frustrated that the City will continue this practice for a full two additional years. It was revealed that this type of program doesn’t exist in any other major City that Administration looked at Let’s not punish those that are thinking about retirement right now, but let’s put this costly practice to an end. This should have been closed last year, but let’s close it in 2019.