Raise for Ontario police forces to cost taxpayers over $1 Billion

June 15, 2011

The true cost of the new wage deal for Toronto and OPP police officers is much higher than reported.

Board ratifies 11.5% pay hike for police

The raise for police in the new city contract brings salaries for officers to $83,800 per year, a raise of 11.5 percent. This means the salary before was $75,000 and is an increase if about $8,800. This will generate an extra $6,100 in annual pensions for fully qualified officers based on the 70 percent formula.

Toronto reported it was for parity reasons with the OPP they offered the deal.

Police are eligible for full pensions as early as age 50. Most will collect these pension, including the surviving spouse benefit for 35 years. This boost gives them an additional estimated extra $215,000 in lifetime pensions. Actually it will be higher because most will have higher incomes at retiement based on the graduated salary grid.

Considering there are 5,600 officers at both Toronto and the OPP, this 11.5 percent wage increase means an extra $2.4 billion in lifetime pensions.

To be fair officers are required to pay half the required pension payments. So the base cost to taxpayers is $1.2 billion. However, this is a retroactive pension boost including past service. So many officers will pay only 4 or 5 years of extra contributions or less than $30,000 for the extra $215,000 in pension income. The shortfall will be added to the OMERS current $9 billion shortfall.

Police in this range will be entitled to about $2 million in lifetime pensions.

The Toronto Police Services Board was reported in the Toronto Star as being very please with the deal. Toronto and Ontario taxpayers will not be so pleased.

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