We're pleased that a recent Winnipeg Free Press editorial, City Pension Benefits Too Rich (Dec. 4), helped raise awareness about the need to scale back golden pensions provided to City of Winnipeg employees.

But there's more to the problem.

The City of Winnipeg will soon face a $16-million annual pension bill. To put that in perspective, that's equivalent to a permanent, 3.4 per cent property-tax increase on its own. Alternatively, recall that concerns were raised by many during the recent election about where the city would find $20 million annually to pay for the rapid-transit extension. Thus, a $16-million bill each year is in the same ballpark.

The problem comes from the city not paying its share of pension costs each year from general revenues; the funds it receives from property taxes and other fees. Instead, the city cracked open a piggy bank of sorts a few years ago to pay the bill. A surplus account in the pension fund, known as the "city account" has been used for years to pay the city's portion of the annual pension bill. However, the piggy bank's funds are getting low and the city will soon have to scrounge around to find $16 million annually.

Back in 2006, the pension-fund surplus account had $130 million. But as of Dec. 31, 2013, the city had drained the account to just $54 million. Each year the city has taken more from the account than the amount earned in interest annually.

While poor planning is part of this problem, the golden benefits offered by the plan are the other issue.

Data obtained by the Canadian Taxpayers Federation show many city employees retire in their early 50s each year. Outside government, most people have mentally circled 65 as their target retirement. No disrespect to city employees taking advantage of the generous perk their union and weak-kneed politicians have negotiated. But hopefully, all can see the status quo is hardly fair for those working outside government, retiring at 65 and getting by on whatever they've saved up.

For a long time the Canadian Taxpayers Federation has urged the city and other governments to copy a remedy enacted by Saskatchewan's NDP back in the late 1970s. Under former premier Allan Blakeney, Saskatchewan's NDP started putting new employees in a far less costly type of pension plan, one that protects taxpayers from bailouts and the other problems associated with the City of Winnipeg's plan. Unions can hardly gripe about this remedy, it affects people who aren't even yet hired.

The second change that needs to occur is for city pension plans to live within their means. If the pension funds face shortfalls due to demographic changes or investment losses and can no longer afford to provide the generous payouts that have been promised, then the funds should have to make due with what they can pay out. It's not reasonable for the city to ask people working outside government (most of whom don't have workplace pensions) to pay more and more in taxes each year to bailout government plans through higher contribution rates each year.

One thing is clear, the problem isn't going away and we're going to have to do something. We will all be better off if that gets figured out sooner rather than later.

.