As dozens of off-duty Winnipeg police officers glared down at them from the gallery, councillors passed a bylaw Thursday that partially clears the way for substantial changes to the police pension plan.

The dispute will now head to three days of labour arbitration already set for mid-January.

"This whole process has been an exercise in bullying and our members aren't happy — they are angry," said Winnipeg Police Association president Moe Sabourin before Thursday's 10-6 vote.

The changes are motivated by the desire to use savings to fund other policing initiatives and services in the city.

A report to the city's executive policy committee in November asserts the plan given to police officers provides benefits not available in other major pension plans, has an imbalance of contributions and is too expensive.

Equalizing contributions over a five-year period — to 11.5 per cent each from the city and pension members — would save $5 million.

The city is now paying 18.48 per cent of pensionable earnings, while members of the police service contribute eight per cent of earnings.

The city would save another $5.5 million by altering early retirement provisions and adding a reduction in pension if retirement is started before age 55, or age 60 if service with the city is less than 20 years.

Mayor Brian Bowman said the potential of adding an estimated $12 million to city coffers from the changes was the proper way to go.

"I'd rather have money for front-line policing and city services than in pension entitlements for an unsustainable plan," Bowman told reporters.

Bowman acknowledged the bylaw, if it clears arbitration, would usher in big changes, but said those changes should have happened much sooner.

"I wish the previous mayor and council had acted on this a long time ago. It's been costing a lot of money that could have been spent smarter to get better services," Bowman said.

Police union will fight changes all the way

The WPA will continue to challenge the changes, even if the union does not get the ruling it wants at January's arbitration hearing, Sabourin told reporters on Thursday.

The next stage would be a judicial review in court.

"Considering the stakes that are in play our membership would want to take it to the nth degree," Sabourin said.

The stakes could be high for operations at the Winnipeg Police Service if officers left in droves because their pension benefits could be altered.

Sabourin says 163 officers are in a position to retire immediately, with dozens more with 20-25 years of service who could leave in the near future, drastically reducing the complement of the service.

"[It] would be devastating for the police service and the service we provide for the citizens of Winnipeg," Sabourin said.

A potential drain of officers might come at the same time as proposed budget cuts, which could also affect WPS numbers.

The bylaw passed Thursday would come into effect on April 1, 2020, pending the outcome of the arbitration or legal challenges brought by the union.