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Nov. 12 TJ Pensions: don’t legislate, negotiate

- Daniel Légère, president of CUPE New Brunswick; Paul Moist, national president of CUPE

CUPE and its members simply want the Alward government take a pause in its legislation and discuss the many options available to preserve the defined -benefit nature of the PSSA and improve its funding.

From the start let us clearly state – defined-benefit pension plans are the best and most efficient way to provide a decent, secure and predictable retirement income for the workers in New Brunswick and across Canada.
 
Following the global economic crisis, many defined-benefit pension plans have faced short-term funding challenges. But these challenges are surmountable, as we’ve seen with the improving health of plans across the country as stock market investments improve and interest rates rise with the on-going economic recovery.
 
Some pension plans, however, faced larger challenges then others. CUPE of course recognizes this, and at every opportunity has been ready to work with employers to find the best solutions that protect the interests of our members and protects their pensions.
 
This was the situation when CUPE, along with other unions, worked with the New Brunswick government to develop a new framework to address critical problems with the province’s health-care workers’ pension plan. This plan was harder hit by the 2008 global recession, as it compounded almost 20 years of underfunding by the New Brunswick government, including 10 years of employer contribution holidays, meaning no Government of New Brunswick contributions.
 
Now commonly referred to as the New Brunswick Model, the new framework was an appropriate measured response to a very specific pension issue.
 
It was an innovative way, created through cooperation and dialogue, to preserve some pension benefits for health care workers. CUPE, however, made it perfectly clear to the Alward government – this was not a one-size-fits-all fix for tackling short-term pension challenges.
Yet that is exactly the position being taken by the province, attempting to unilateral push a so-called Shared-Risk Model for the broader public sector pension (The Public Service Superannuation Act, or PSSA) - without any open dialogue or negotiations with the pension plan members.
 
Pensions are complex, and the New Brunswick proposal would be a profound and fundamental shift for the PSSA from the far superior defined benefits that has served workers well for decades. CUPE members, and all other participants in the PSSA, have many perfectly legitimate questions on what these changes will mean for their retirements.
 
At its last valuation date, the PSSA had 84 per cent of the assets needed to pay its liabilities, and all indications showing the plan could be back to full funding by 2030. Some adjustments and a new joint trustee model, where the parties genuinely share risk, is what are needed. But what is being proposed, or rather threatened to be imposed by legislation, is the complete transfer of risk on to the employees and retirees. This is not acceptable.
 
Pension plans across Canada are facing similar challenges as the PSSA, but those pension plans are not being abandoned. Pension experts across the country agree well managed defined benefit plans are the best option. So why is New Brunswick abandoning them?
CUPE and its members simply want the Alward government take a pause in its legislation and discuss the many options available to preserve the defined -benefit nature of the PSSA and improve its funding.
 
We have never said the “status quo” is the only option for the PSSA plan. But we also can’t stand idly by as the Alward government tries to shed pension liabilities at the expense of public sector worker pensions.
 
CUPE is fully prepared to work with the province in tackling the surmountable challenges facing the PSSA plan, and find options that don’t transfer all the risk on to workers and retirees.
 
Our members across Canada stand behind CUPE New Brunswick and say with one loud voice to the Alward government – negotiate, don’t legislate.
 
Daniel Légère is president of CUPE New Brunswick, representing more than 25,000 members across the province. Paul Moist is national president of CUPE, representing more than 627,000 members across Canada – the country’s largest public-sector union.