Shifting More Employees to a Shared-Risk Pension Plan is Not a Responsible Solution to New Brunswick's Deficit, Says PIPSC

OTTAWA, ONTARIO--(Marketwired - Dec. 1, 2015) - The Professional Institute of the Public Service of Canada (PIPSC) is rejecting as irresponsible and damaging last week's proposal by provincial Health Minister Victor Boudreau that the New Brunswick government consider, among other things, "shifting more employees to a shared risk pension plan" to save costs. The proposal forecasts additional savings between $7.5 million and $9 million by doing so. PIPSC members in New Brunswick were already moved to a shared-risk pension model by the previous Conservative government.

In June 2015, PIPSC wrote to Premier Brian Gallant detailing a proposal on how the province might save $50 million and actually restore defined pension benefits to its members. Its examination of the valuations, design, financing and investment policies of the Public Service Superannuation Plan (the "PSSA"), the NB PSSRP, their legislation and their governing documents showed that the repeal of the PSSA and the removal of the defined benefits by the former government were unnecessary. Other studies, such as the one prepared by PBI Actuarial Consultants earlier this year, also highlight concerns about that decision.

"There are many ways a government can reduce costs," said PIPSC Vice-President Steve Hindle. "Shifting more of the uncertainty and burden of funding one's retirement onto its employees should not be one of them. Forcing public employees, many of whom have worked for the province for decades, to suddenly shoulder the burden of market uncertainties in their 'golden' years sends a very bad signal to everyone - long-serving, new and prospective professional employees alike. Aside from the unfairness to existing employees, why would any qualified professional consider working for a government when one of the options on the table is to deny them a secure retirement?"

The Institute is disappointed that its recommendations were not among the possibilities listed by Minister Boudreau. "It is possible for the provincial government to restore the defined benefits of the former plan to both active and retired members. It does not need to extend the shared risk model to other workers. One example of a very effective way for it to help achieve its fiscal objectives would be to reduce its dependence on contracting out services to the private sector, which costs New Brunswick taxpayers millions of dollars every year. Almost all of it could be performed more effectively and at less cost by in-house specialists" concluded Hindle.

The Professional Institute of the Public Service of Canada represents some 55,000 professionals across Canada's public sector, including some 1,300 provincial and federal employees in New Brunswick. Amongst these are hundreds of highly skilled professional employees working for the Government of New Brunswick, such as Agrologists, Agronomists, Architects, Crown Counsel, Crown Prosecutors, Engineers, Land Surveyors, Legal Aid Lawyers and Veterinarians.