Last week, the Canadian Taxpayers Federation released a report showing that there are thousands of municipal employees in Alberta who receive more than one pension.
According to the report, the City of Lethbridge has 156 employees who receive a second pension and 11 who receive a third pension. Combined, the City of Lethbridge paid out $921,000 last year for the second and third pensions.
City of Lethbridge workers have access to 4 pensions
- Local Authorities Pension Plan
- Special Forces Pension Plan
- APEX Supplementary Pension Plan
- MuniSERP Supplementary Employee Retirement Plan
Here’s how they break down, according to the City of Lethbridge 2019 Annual Report.
Local Authorities Pension Plan
The LAPP is the main pension plan and covers all full-time and part-time permanent municipal employees, other than cops. It’s covered by the Alberta Public Sector Pension Plans Act and serves about 265,000 people and 421 employers throughout Alberta.
The City of Lethbridge must make current service contributions to LAPP of 9.39% of pensionable earnings up to the CPP year’s maximum pensionable earnings (YMPE) and 13.84% for any excess. Those amounts are lower than they were in 2018, when they were 10.39% and 14.84%, respectively
Employees, on the other hand, contribute 8.39% up to the YMPE and 12.84% for any portion over the YMPE. The 2018 rates were 9.39% and 13.84%.
Last year, the City of Lethbridge paid $12.039 million into the LAPP, and city employees paid $9.029 million. The city paid $11.985 million in 2018, and employees paid $10.927 million.
In a letter addressed to Franco Terrazzanno of the CTF this summer, the City of Lethbridge reported that 1,322 employees receive the LAPP.
Special Forces Pension Plan
Like the LAPP, the SFPP is a multi-employer plan covered by the Alberta Public Sector Pension Plans Act. It serves about 7,375 people and 7 employers in the province. As implied in the previous section, this plan is for city cops.
2019 contribution rates for the City of Lethbridge were 14.55% of pensionable salaries and 13.45% for the cops. The rates were the same in 2018.
The City of Lethbridge contributed $2.695 million to the SFPP last year, while city cops paid $2.023 million into it. The respective contributions in 2018 were $2.594 million and $2.331 million.
APEX Supplementary Pension Plan
APEX is an optional pension plan through the Alberta Urban Municipalities Association available to non-unionized employees, otherwise known as “exempt employees”. The city had 187 exempt employees in 2019.
APEX enhances the LAPP benefit to a full 2% of all earnings up to the Income Tax Act salary cap, which for 2020 is $172,221.
The City of Lethbridge contributes 3.78% to APEX on pensionable earnings up to $151,000, while eligible exempt employees contribute of 2.84%. The 2018 rates were the same.
In 2019, the City of Lethbridge contributed a total $728,000 to APEX, and employees contributed $446,000. The 2018 amounts were $655,000 and $495,000, respectively.
According to the City of Lethbridge, 156 employees receive APEX, or about 11.8% of those receiving LAPP.
MuniSERP Supplementary Employee Retirement Plan
MuniSERP supplements both APEX and LAPP. It’s a voluntary plan, also through AUMA, available to only senior exempt employees who’d be affected by the Income Tax Act cap on pension contributions. Beneficiaries of the plan receive a lump sum cash payment upon retirement or death, based on years of service, final average earnings, and a 2.0% benefit rate offset by corresponding LAPP and APEX benefits.
Employees don’t make contributions to this plan; only the employer does. The City of Lethbridge spent $193,000 last year on MuniSERP. It was $132,000 in 2018.
Only 11 employees were eligible for MuniSERP, about 7.1% of those receiving both LAPP and APEX.
When you add up how much the City of Lethbridge spent on all 4 pension plans, it came in at about $15.655 million last year, which is $289,000 more than the $15.366 million they spent in total in 2018.
In other words, LAPP makes up about 76.9% of the total spent on pensions, SFPP made up about 17.2%, APEX made up 4.7%, and MuniSERP made up about 1.2%.
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