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Key Messages

Here are key messages and additional information for you to use when meeting or writing your MLA regarding the proposed "Shared Risk" pension model. Please pass this information on to fellow pensioners and refer them to our website.

Trust

  • Trust is earned and right now pensioners have a very low level of trust with this government.
  • We worked hard and served the people of New Brunswick.
  • Now government is going to walk away from its long-standing commitment to us.
  • We didn't have a choice. We had to join the pension plan but we didn't mind. We knew our money was going into a fund that we were told by our employer, the government, would be managed well and be there for us when we retired. Our pensions are really deferred earnings.
  • The only way for government to restore our faith is to honour our present pension contract and abandon this mean-spirited attack on its former employees.

Government Fund Guarantor

  • The government cannot simply walk away from its obligations to its pensioners.
  • We earned our pensions during our years of service to the people of New Brunswick.
  • Government assured us that the PSSA was a secure, well-funded pension and that the Minister of Finance as the Plan Governor fully assumes the risk for any unfunded liability.
  • By moving pensioners to the new model, government is not sharing risk; it is putting pensioner's and their spouse's income at risk.
  • The terms and conditions of our contract were clear and government must honour its legal and moral obligations to us.

New Brunswick Investment Management Corporation

  • The New Brunswick Investment Management Corporation has been a good steward of the pension fund.
  • Compared to other pension funds in Canada and the U.S. our pension fund has been one of the least volatile and most productive.
  • We have never heard from the Minister of Finance about the liability of the fund or any difficulty with the fund.

Stage of Life

  • The proposed Shared Risk model is discrimination against, and an assault on vulnerable pensioners.
  • We made our retirement plans based on our pensions as our major source of income.
  • Any changes to our base benefit, loss of indexing or a reduction in survivor benefits would be financially devastating.
  • We have no way to adjust our financial situation or to earn more income. Province is not going to take us back to work.

Financial Impact

  • A change in our pensions means money out of our pockets.
  • The loss of indexing alone would have real immediate and long-term effects on our finances.
  • If we use the government's number of 25% Consumer Price Index reduction over the long term, and apply that to the average pensioner's income of $21,000 that means a loss of $40,000 over the pensioner's life.

Recruitment

  • The Province has long used its pensions and benefits to entice qualified people to the public service.
  • When word gets around that the Government broke its long-standing contract with its pensioners, good people will be reluctant to join the public service.
  • No one wants to be the victim of false promises.
  • The damage to the Province's reputation could be disastrous.

Seriousness of the Problem

  • As a government, you have shown total disrespect for your pensioners.
  • You did not consult us and we do not want any more "trust us, the experts know best".
  • We want you to honour your commitment to us and keep the pension contract you have with us.

Strong Voice

  • If you abandon us, we will take whatever steps we must to prevent this injustice.
  • We are taxpayers and we are citizens who exercise our democratic right to vote.
  • We are tired of broken promises and we will use our strong voice to show our disguest in the next election.

Additional Information

  1. Many have noted that they were attracted to the employ of the Province,often at less than market rates, with the promise of a defined benefit pension plan, guaranteed by the Province. "PSSA Echo", a periodic Government publication, frequently stressed this benefit, particularly the Provincial guarantee.
  2. Mandatory bi-weekly contributions were taken from each employee's pay.
  3. The Province was also supposed to make regular contributions since 1977. When markets were doing well and the plan was in surplus, we suspect that its contributions were sometimes reduced or eliminated. (The "Task Force" says that the Province always put in what it was required to put in). This was not detrimental to employees or pensioners, since the Province was the Guarantor of pension payments - it was just how the Province chose to manage its finances. However, now that the plan is in deficit, the Province apparently wishes to have the option of reducing its payments to pensioners, rather than reimbursing or contributing further to the plan and it wishes to cease being the Guarantor.
  4. The amounts paid in by employees and by the Province were to be invested, and they, and the proceeds of this investment are in theory now available to pay our pensions, i.e. payments to current retirees do not in theory depend on current savings by present employees or by the taxpayers. There is no "inter-generational unfairness", as claimed by the Task Force. The money paid in by current employees and the Province is to be invested to pay their pensions, at a later time. If the Province has not managed its finances well, this is not the fault of its present pensioners. It is believed, as outlined in ECHO, that the NBIMC has done a good job of investing the pension funds over the last 16 years, growing the PSSA and Teacher Funds to almost $10 Billion.
  5. The Task Force has been silent on the fact that for the period 1932 to fiscal year 1975/76 the Province contributed no funds at all, only employee contributions went in Trust Fund #4 in the accounts of the Province.
  6. The defined benefit was based in part on one's years of service. Employees could gauge their years of service in order to have a pension sufficient for their needs. Interfering with their benefits now will cause hardship to many.
  7. Every year during one's service, the amount one could save for retirement in his/her own RRSP was subject to a "pension adjustment" which reduced one's allowable contribution to his/her RRSP by an amount dependent on the amount the Province was supposed to contribute to the defined benefit plan.
  8. Present retirees have fully performed all of their obligations and are collecting pensions for which they have paid in full. Their rights to their pensions are fully vested.
  9. Early retirement enticements, which saved the Province a considerable amount of money, were supposed to have been fully funded by the Province and are in any event fully part of the arrangement. Neither these benefits nor spousal survival benefits are "ancillary", and susceptible to reduction, any more than any other aspect of the plan.