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Contract more than a piece of paper

By Bill Ayer, Co-Chair  Pension Coalition NB

When is a contract not a contract?  When it is a contract with the Government of New Brunswick!

As pensioners, we are appalled by government’s intention to break its long-standing contract with us – public servants, teachers, UNB staff and NB Power employees. We paid into our pension fund in good faith through payroll deductions to make sure of an income - and we planned our retirement relying on that pension.

We had no choice but to join the pension plan. As we faithfully served New Brunswick’s Government and taxpayers, we kept making our contributions. We cannot say the same for government as there were years when it did not make its full contribution. This did not seem too problematic when the Province was the plan Guarantor.

However, this government has now decided to break our contract of employment, despite saying last May that “Any changes to the pension plan will be incremental and applied on a go-forward basis”.  Now, it is walking away from its obligations as guarantor and intends to transfer our pension fund to a new plan with different terms and conditions. Plan members, including pensioners, will share all the financial risk while government abandons its obligations. It is doing this without consulting us and by enacting extraordinary legislative provisions. 

Our pension fund does not belong to government.  As the contributors to the plan, we have an absolute right in law to the entire amount of the fund. The government cannot take that right away and it cannot claim the funds to satisfy its debts.

The Pension Task Force says there are problems with the PSSA; but we know the New Brunswick Investment Management Corporation has been a good steward of the pension fund.  It kept administrative costs lower than other plans in 2011-12. At the same time, its investments performed well, returning a 10 year average of 6.15% which is higher than the nine largest pension plans in Canada.  In fact, as of March 31, 2012 the fund is in a surplus position of $140 million and has been in surplus since 2005.

By making these changes to our plan, government is discriminating against its own employees. Most pensioners cannot go back to work and have no way to adjust their financial situation. If they had gold-plated pensions, as the government would like you to believe, it would not matter. However, the average pension is $21,000 and a surviving spouse may receive just $10,500 annually.

Our faith in our employer, the government, has been shattered. Therefore, we call on government to restore our trust by rethinking its intentions. At the very least, government must keep the existing PSSA for pensioners.  To do anything less would be morally, ethically and legally wrong.

We know there is a myth out there that the pension plan is failing and government would have to invest more money if interest rates fall again.  But this pension plan has out-performed many other large plans around the world and has been in surplus for the past eight years.  We believe New Brunswickers will understand we paid our money into this plan in good faith.  We believe that despite the Task Force’s rhetoric, they will recognize that the plan itself – in a surplus position of $140 million - is healthy!  New Brunswickers will also understand that if this government is allowed to break our contract, then there is no contract with the Government of New Brunswick that is worth the paper on which it is written.

Regional meetings of pensioners are now being planned around the Province.  If you are a retiree receiving a pension through the PSSA, get involved now – time is short.  Your future is in your hands. 

Pensioners can register with Pension Coalition NB on the website  by clicking on REGISTER on the right-hand side; or by writing to the Coalition at P.O. Box 3021, Fredericton, NB E3A 5G8. You can also call toll free 1-855 455 7892 or 455 7892 in the local Fredericton area.