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This article was published 11/1/2016 (1711 days ago), so information in it may no longer be current.

City hall is faced with another bill to cover the financial uncertainties of the Winnipeg police pension plan.

An administrative report says council must authorize an $800,000 additional expense to the 2015 police budget.

The $800,000 tab represents an increase in the city’s contribution rate to ensure the police pension plan can cover its benefit payments.

The administrative report, part of Friday’s finance committee agenda, states the $800,000 is in addition to a $95,000 payment paid in December for the city’s annual cost of a letter of credit to cover the pension shortfall.

The administrative report states the city’s contribution rate for 2015 was increased retroactively to 15.63 per cent, from the previous rate of 15.12 per cent, based on the pension plan’s actuary assessment to meet the current servicing costs.

The contribution rate is separate from the letter of credit costs, which are special payments to fund the solvency deficiency of the police pension plan.

The city is obligated to make up any financial deficiencies in the Winnipeg police pension plan – if the assets of the plan are insufficient to cover the benefits to all pension plan members – in the unlikely event the City of Winnipeg were to declare bankruptcy.

The police pension plan first recorded a deficiency in 2011, estimated to be $120 million.

Many pension plans across Canada were affected by the recession of 2008, when market values plummeted and the value of pension plans fell with them. While some of the affected plans have bounced back to solvency, others, including the Winnipeg police pension plan, have not.

Police members were asked in 2013 to approve an exemption for city hall to cover the shortfall, which they rejected in a vote.

That required the city to either make extra payments of several millions of dollars every year to bring the plan up to solvency or obtain a letter of credit, which would accomplish the same objective.

Council opted for the letter of credit route in 2013, which cost $30,000 that year. The special payment has ballooned to $95,000 and is expected to increase a further $5,000 annually.