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From New Brunswick’s Public Service Superannuation Act to a Shared Risk Plan - PIPSC

Since the fall of 2012, unions representing New Brunswick’s public service employees have been invited to regular meetings with the task force established by the provincial government to implement a Shared Risk Pension Plan intended to replace the current pension plan managed under its Public Service Superannuation Act (PSSA).

While the Professional Institute has been an active participant in the work of the task force, we consider its results to be unacceptable.  With the loss of acquired benefits, a steep increase in employee contributions and the need to work an extra five years, amongst other things, this is far from a positive or acceptable scenario for our members.

In our view, a crucial step in the process was missed and in fact consistently opposed by the task force and the provincial government:  review the state of the current Plan, identify what ails it, and decide on an appropriate remedy.  In fact, at no time in the process were we 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.

The Institute was prepared to seriously consider any adjustments that would ensure the plan’s financial viability over the long term.   These could have included, for example, adjustments to the cost-sharing ratios or even a gradual increase in the age at which employees become eligible for a full pension.  Intergenerational inequities are also worth examining and fixing.  But the task force'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 task force’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.

As a result, PIPSC will not be signing a Memorandum of Understanding which gives the government carte blanche to repeal the PSSA and bring in a complex Shared Risk Plan.   We cannot sign off on an approach that will:

  • Reduce benefits
  • Eliminate the guaranteed indexing of current or future pensions
  • Increase employee contributions by 30% or more
  • Raise the retirement age from 60 to 65
  • And, by changing the formula used to calculate pension upon retirement, severely penalize our members by significantly slashing their pension income.

For over six months, we worked with the task force to arrive at a plan that would be fair to our members.   They are deeply disappointed with the results and the impact on their hard-won benefits. Our mandate requires that we not accept a plan that would have a negative impact not only on current employees, but also on those from previous and future generations, as well as on workers in other jurisdictions.

http://www.pipsc.ca/portal/page/portal/website/issues/pensioninfo/pen_main/news/09182013

Publish Date: 18-SEP-2013 01:27 PM