Monday, November 18, 2013

The Provincial Government tables pension legislation

The following is a press release issued by the Provincial Government on November 19, 2013. For more information on the Shared Risk Pension Model, please click on the following link : Shared Risk Model

News Release

Union support for pension legislation
19 November 2013
FREDERICTON (GNB) – The provincial government announced today that it has substantial union support in tabling legislation to make the Public Service Superannuation Act (PSSA) more sustainable for plan members and more affordable for taxpayers.
Finance Minister Blaine Higgs has signed a Memorandum of Understanding with unions representing two-thirds of the bargaining positions in the PSSA, including several CUPE locals, in advance of pension legislation that the province will table today.
These unions include the New Brunswick Union (4,200 members), the International Brotherhood of Electric Workers (2,200 members), the New Brunswick Nurses Union (200 members), CUPE 1252 Hospital workers (225 members), CUPE 1840 Court Stenographers (72 members) and CUPE 5017 Community College Operational Services (100 members).
“After a consultation and collaboration process that lasted more than a year, we are happy to be joined by the great majority of unions representing members in the PSSA,” said Higgs. “All members of the PSSA will soon have the benefit of a more secure, sustainable and affordable pension plan as a result of this legislation.”
The PSSA is facing a billion dollar deficit which is expected to get worse due to demographic realities and realistic estimates of future investment returns.
The pension legislation will:
● Put an end to the special payments to the PSSA, which were over and above regular contributions and which have cost taxpayers over $673 million over the last two decades. The special payments were expected to cost taxpayers a further $1.5 billion if no changes were made.
● Ensure that retirees will never see their pensions reduced from their current level and will continue to get cost of living increases among the best of any public sector plan in Canada.
● Ensure that active employees can look forward to a secure pension when they retire.
● Ensure the New Brunswick Investment Management Corporation (NBIMC) continues to manage the PSSA pension fund.
● Provide the basis for converting the Members of Legislative Assembly's pension to a shared risk model.
“We recognize that the province is in a difficult fiscal situation,” said Suzie Proulx-Daigle, president of the New Brunswick Union. “We could have refused to co-operate with government and kick the can down the road for the next generation to solve. Instead we decided to work in a collaborative way with government to find a solution. That solution is the shared risk plan.”
“Like most other Canadian provinces, we are taking action in order to provide pension security for plan members and avoid the drastic action that has been taken in other jurisdictions,” said Higgs. “The New Brunswick pension model has been recognized across North America by sources including the New York Times editorial board, the Boston College Center for Retirement Research and pension experts such as Jim Leech, head of the Ontario Teachers' Pension Plan.”
The PSSA is the 9th pension plan in New Brunswick to adopt the shared risk model. Others include:
● Academic Employees Pension Plan (UNB Professors)
● Pension Plan for Certain bargaining Employees (CBE) of New Brunswick Hospitals
● Pension Plan for Canadian Union of Public Employees (CUPE) of NB Hospitals
● City of Fredericton Municipal Pension Plan
● City of Saint John Municipal Pension Plan
● Saint John Energy Pension Plan
● New Brunswick Pipe Trades Pension Plan
● Co-op Atlantic Pension Plan
“The public service plan (PSSA), like most defined benefit plans in New Brunswick, is in trouble and is not sustainable into the future,” said Marilyn Quinn, president of the New Brunswick Nurses Union. “We are confident that this is the best solution to provide pension security for active members and retirees.”