Since the fall of 2012, the provincial government has been working toward the implementation of a Shared Risk Pension Plan (SRP) intended to replace the current pension plan managed under its Public Service Superannuation Act (PSSA). With this change, the Province will rid itself of its contractual obligations to both retired and current public servants. The Province is attempting to fix its fiscal mismanagement on the backs of retirees and current employees while the pension fund, considered one of the best managed in Canada (Moody’s, October 2013), has shown surpluses of over $100 million for the last seven years.
The Professional Institute considers the conversion of the PSSA to a SRP to be unacceptable because it will:
• Eliminate the guaranteed cost of living indexing of current and future pensions;
• Potentially reduce both base and ancillary benefits depending on performance of the Fund ( that will now be privately managed);
• Increase employee contributions by 30% or more;
• Raise the retirement age from 60 to 65; and
• Severely penalize our members by significantly slashing their pension income in the order of 20% or more (career averaged earnings calculation as opposed to “Best 5 Years”) .
At no time has PIPSC been presented with actuarial projections that would allow us to gauge the impact of changes on the pension plan in the short, medium and long terms, even though it was requested on several occasions. The Institute is prepared to seriously consider any adjustments that would ensure the plan’s financial viability over the long term. But the Province's response has been that “fixing the PSSA is not an option.” There is quite simply no evidence that the current plan cannot be adjusted to respond to new economic and demographic realities. The Province’s unwillingness to look at fixing the PSSA tells us that its repeal and the subsequent introduction of the new Shared Risk Plan is a political, rather than evidence-based, decision on the government’s part.
PIPSC NB Groups are seriously concerned about a plan that would have a negative impact not only on its current members, but also on those from previous and future generations, as well as on workers in other jurisdictions. i.e. YOU!!!!!! The shared risk model started in New Brunswick with the cities of Saint John and Fredericton and a couple of separate pension plans that were financially insolvent. It then broadened to the Province of New Brunswick, and is now also being explored by Prince Edward Island, Ontario and Newfoundland. However, NB is the only province to unilaterally impose shared risk pensions. Last week, at the Tory Convention in Calgary, Harper made it clear that he plans to “reform” your pension as well.
The Globe and Mail, Saturday, Nov. 02 2013: “Motions passed by delegates sent a strong message to the Harper government that they’re pretty happy to see the Tories go after public-sector unions, for instance. …….Another new policy calls on the government to switch its civil servants to defined contribution pension plans from more lucrative defined benefit plans where the level of payout at retirement is guaranteed.” What has PIPSC been doing? Since July 2013, PIPSC, at the direction of President Corbett, has:
• Created partnerships with the NB Pension Coalition, the NB Teachers Federation, CUPE National to work together to achieve the common goal of stopping the SRP;
• Provided legal; actuarial and communications support to bolster our position;
• Attended regional meetings throughout the Province to stand beside the NB Pension Coalition and support the maintenance of the PSSA;
• Lobbied politicians and met with the Finance Minister;
• Held a press conference to inform the public of the effect that the draconian plan will have on active employees and its opposition to the SRP;and most recently
• President Corbett spoke at a demonstration at the Provincial Legislature in Fredericton on November 6th, 2013.
What is next?
• The NB government is intent to introduce legislation to repeal the PSSA in November 2013 and convert the pension funds to a SRP in January 2014.
• CUPE NB announced November 8th, 2013 that it will stand beside PIPSC and the NB Pension Coalition with the common position that the PSSA should be maintained. This announcement was a direct result of the relationship at the national level between President Corbett and Paul Moist, President of CUPE.
The New Brunswick Groups directly affected by this proposed pension reform are small at 500 PIPSC members, and we need your help. Our Groups include the: • NB Engineers, Architects and Land Surveyors • NB Veterinarians • NB Agrologists and Agronomists • NB Crown Prosecutors; and • NB Crown Attorneys