Professional Institute of the Public Service of Canada

Professional Institute of the Public Service of Canada

October 25, 2013 10:16 ET

Opinion-Editorial from the Professional Institute of the Public Service of Canada

Conversion of New Brunswick's Public Service Superannuation Act to a Shared Risk Plan

OTTAWA, ONTARIO--(Marketwired - Oct. 25, 2013) -

Dear Editor:

The Professional Institute of the Public Service of Canada (PIPSC) represents some 60,000 professional public servants across Canada, including more than 400 provincial employees who proudly serve the citizens of New Brunswick as Crown Prosecutors, Crown Attorneys, Engineers, Land Surveyors, Architects, Veterinarians, Agrologists and Agronomists.

These professional employees are gravely concerned with the proposed repeal of the Public Service Superannuation Act (PSSA) and its conversion to the Public Service Shared Risk Plan (SRP).

On behalf of our members, we would like to clarify recent statements from the New Brunswick government on the SRP, including the suggestion that the new plan was developed with, and agreed-to, by unions.

PIPSC and other unions whose members contribute to the current pension plan under the PSSA were invited to attend a series of meetings, beginning last Fall with the Task Force appointed by Finance Minister Blaine Higgs. The Task Force was mandated to review public-sector pension plans while respecting "the principles of sustainability, affordability, secure benefits, transparency and inter-generational equity."

In February 2013, the former Chief Actuary for the government of Canada, who currently advises the Professional Institute, asked the Task Force to provide standard actuarial projections on the SRP in order to assess its financial impact on the PSSA in the short, medium and long term, and thereby the extent to which the SRP would meet its financial objectives. Unfortunately, the Task Force refused to respond to these questions and no further information was provided for our members.

PIPSC has refused to sign a Memorandum of Understanding regarding the Public Service Superannuation Plan on behalf of our members since the proposed SRP will have a negative impact on their retirement security. Their pensions are essentially deferred salary schemes and part of the total compensation package offered when these professionals were recruited by the Province of New Brunswick.

The government is suggesting that the SRP will be more "affordable" and "secure" than the PSSA. We do not agree.

Under the SRP our members' contributions will increase by 30% or more initially, while the retirement age and penalties associated with early retirement will also increase dramatically. At the same time, base benefits will be severely reduced for 20% of our members, and the guaranteed cost of living indexing (COLA) for future pension benefits will be eliminated for all.

From our perspective, the combination of reduced benefits and increased contributions change the PSSA in a manner that is unfair and unreasonable. It would result in a pension plan that our members cannot afford. As for retirement security, the repeal of the PSSA and the conversion of its funds into the SRP is essentially the confiscation of assets that belong to active and retired members of the PSSA.

Our members do not believe that the five principles for pension reform set out by the Minister of Finance have been respected by his Task Force. And they wonder why the Task Force made no effort whatsoever to consider how the PSSA could be reformed to meet today's needs.

Our members will not accept a plan that will have such negative consequences for the financial security of past, present and future public employees both in New Brunswick and in other jurisdictions.

We echo Pension Coalition NB's request to the Province to take its Shared Risk plan off the table as a positive step toward a genuine dialogue on all of the options for the future of public service pensions. We urge Premier Alward to initiate such a process. When he does, we can assure the people of New Brunswick that the Professional Institute of the Public Service of Canada will be a constructive voice at the table.

Sincerely,

Gary Corbett, President, The Professional Institute of the Public Service of Canada

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