Council votes to end retirement allowance payments to City of Calgary workers

Calgary council voted 13-1 Tuesday to end retirement allowance payments to city workers.

The payments, which guarantee city workers who have served at least 25 years an amount of money equal to their annual vacation entitlement, date back to at least 1964, with officials supporting the continuing practice in 1981.The retirement allowances cost the city roughly $4.3 million per year.

An initial notice of motion to end the practice immediately was defeated in a 4-9 vote earlier in the evening, after the city received legal advice that found there would be a high risk if the city ended the practice without giving workers at least two years notice.

The second motion, which guarantees the payments will stop no later than Dec. 31, 2021, passed 13-1.

Only Coun. Ray Jones voted against.

"Because it has been underway for so very long it would be considered by many to be part of the total rewards package that is available today," Calgary Mayor Naheed Nenshi said during debate on the first motion.

"So as such if you were unilaterally going to change that in a unionized environment you open yourself up to the risk of grievances."

The city's human resources department said in the next two years, roughly 4,000 city workers are expected to reach retirement age and could be eligible to receive the payouts.

Payouts will be grandfathered in for current employees and the change will have to be negotiated during the next round of union contracts.