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Response to Kevin Lacey’s Opinion piece on SRPP

Mr. Lacey, representing the Canadian Taxpayers Foundation, recently chose to belittle the very real concerns of public service retirees in their fight to have the Province honour its contractual arrangements to them. I am disappointed that he is so quick to judge us and not the actions of the Government. The scope of his analysis is very limited. He accepts the figures presented by the Government at face value. He ignores the fact that all requests for working papers and information relevant to their projections have been denied. He ignores the fact that after two years and four months the Task Force on Protecting Pensions, that gave us the Shared Risk Pension Plan (SRPP): has yet to produce a required Report to Government.

That the Task Force has yet to do any work on private sector pensions, the original reason for its creation. He ignores the fact that there was no public discussion of the SRPP before its introduction and that negotiations with unions were and continue to be held in total secrecy. He ignores the fact that major stakeholder groups such as retirees and non-bargaining employees had no place at the table and were informed of what was planned after the decisions were made. Add to this the fact that major changes to the pension plans in terms of governance and investment responsibility have not been spelled out. Does the end always justify the means? Doesn’t caring for “taxpayers” include requiring government decision making to be open, transparent, inclusive of affected parties and fair?

The most bothersome feature of what the Government is imposing on retirees is the ease with which they feel they can break a contract. The Taxpayers Federation may not feel that honouring contracts is important but the rest of us should. Suppose you have a trust fund that comes due when you reach a certain age and after many years of paying into it the Trust Company unilaterally decides, at the last minute, to reduce the guaranteed payment to you by five or ten percent. They can’t do it, right? Suppose you have a small business and your main supplier breaks their contract with you. You have recourse to the courts to seek redress or block the action. In New Brunswick, the Government has said that there is no recourse to the courts for its retirees. Legislation has been passed in an effort to protect itself from any legal action seeking redress for violating their contract with retirees. Is there a double standard? If you have work in the public sector you have your legal rights stripped away. If you are a retiree in the private sector you can seek justice? Or does the Province plan to break other types of contracts? We hope that the Taxpayers Federation do not think of this as the new normal.

Lacey refers to the SRPP as “modest pension reform” and goes on to promote defined contribution plans for the public service. The changes brought about by SRPP are very far from modest and in the words of the Task Force are defined contribution for the Province. The Pension Coalition has not debated the need for changes in public service pension plans nor the viability of the reputed solution introduced by the Government. The Coaltion does challenge the way those changes impact retirees. They also challenge the data provided by the Task Force and Government in so far as the basis for their assumptions have not been made available for public scrutiny. The Government has not even provided information to identify in any meaningful way the financial impact on their proposed plan of honouring the contract with retirees. Ironically, the Government is asking retirees to trust us on this one but in point of fact the reverse has happened. It has led to a complete lack of trust. We would hope that anyone claiming to represent the best interests of taxpayers would share the same desire for accountability, accuracy and public engagement that we do.  

We are also saddened to see Lacey perpetuating the myth of the “rich” public sector pension plan. At an average pension of $21,000 ($10,500 for a widow), he gives a strange meaning to the term rich. In total, Provincial retirees contribute upwards of $500 million annually to the economy as well as our fair share of taxes. As noted earlier, the Task Force was originally established to address the issues raised by the failure of two private sector pension plans. Private sector plans are indeed in need of attention. A race to the bottom for public sector plans is not the answer. All citizens will at one point need financial support in senior years. Canada has a deserved reputation for being one of the leading nations in the world in reducing senior poverty. We need to avoid sliding backward, particularly if it is based upon false premises and shoddy delivery.