All employees will see retirement allowance payments axed by 2021, city manager says

Calgary's city manager says there should be no confusion over the fate of retirement allowances for long-serving city workers in all circumstances, they're on the chopping block.

"I just want to make one thing clear: this benefit will not be grandfathered for anybody," saidDavid Duckworth, the city's manager. "We are working to eliminate this benefit for all employees of the City of Calgary by Dec.31, 2021."

Calgary council votedto end the payments on Tuesday.

The payments guaranteed city workers who had served at least 25 years an amount of money equal to their annual vacation entitlement meaning if an employee received six weeks vacation each year, they would receive six weeks salary when they retired.

The retirement allowances which have been paid out to city workers since at least 1964, according to Calgary's city clerk have cost the city roughly $4.3 million per year.

Giving notice

Council voted to end the payments in 2021after the city received legal advice that indicated that there would be a high risk if the practice was ended and city workers were not given two years' notice.

That means current employees will still qualify for the payments while it remains active but they must retire before the end of 2021 if they wish to collect it.

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

New employees will not be eligible for the bonus,nor will employees who retire after 2021 or who retire without the minimum number of years served.

And though the city's goal is to eliminate the bonus for all employees by the end of 2021, Duckworth said there was a possibility a small number of unionized employees could still qualify a few months after the deadline.

"If we don't have a contract in place by Dec.31, 2021, we will be in a blackout period while we're bargaining with the unions," he said. "All those employees that are eligible can still receive it until such point we have a collective bargaining agreement."

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