Premier highlights progress in rebuilding public pensions in New Brunswick23 August 2012
SAINT JOHN (GNB) – Premier David Alward visited Saint John today to report on progress being made to make public pensions in New Brunswick more secure, sustainable and affordable.
"This new pension model enables New Brunswick workers to have confidence in their future," said Alward. "By working together with valued partners to address this critical global challenge, New Brunswick has established itself as a North American leader."
The premier highlighted the provincial government's work to implement and promote the new pension model announced in May. Alward said the new model offers New Brunswickers improved protection for their hard-earned savings and reduces liabilities for all taxpayers.
"Our government is taking action on pensions," Alward said. "This 'made-in-New Brunswick' pension model, developed in collaboration with union leadership, offers an innovative way to address these issues now, before it is too late."
When the provincial government outlined its plans on May 31, it was announced by the New Brunswick Nurses Union, the New Brunswick Union, the Canadian Union of Public Employees (CUPE) Local 1252 (New Brunswick Council of Hospital Unions) and the New Brunswick Pipe Trades that they will be adopting the new model for specific plans. Interest in the new model has been generated from unions, other governments, pension administrators and employers throughout Canada.
The New Brunswick model attracted further interest when the Council of the Federation – attended by the 13 provincial and territorial leaders – met in Halifax in late July. At that time, Alward delivered a presentation on pension reform, resulting in Newfoundland and Labrador to express an interest and Prince Edward Island to indicate it is studying what New Brunswick is doing.
In addition, the premier announced New Brunswick will hold a national symposium in Fredericton in February 2013 to provide further details about its pension model. Other events are being planned in the lead up to this conference to engage interested groups in a dialogue on pension reform.
"We expect a number of jurisdictions, unions, pension fund managers and business leaders will attend the symposium and other events being planned to see how New Brunswick is leading the way in preserving, protecting and enhancing pensions," said Alward. "I am pleased with the response we have received so far to our new pension model, and I look forward to sharing our experience and engaging in an ongoing and meaningful dialogue on how we can best safeguard pensions across all sectors, employers and jurisdictions."
The New Brunswick pension model was developed in conjunction with a task force, appointed by Justice Minister and Attorney General Marie-Claude Blais and Finance Minister Blaine Higgs, which collaborated with a number of union leaders. The task force, provincial and union representatives arrived at a model that updates a pension system that was designed for 1980s economic and demographic realities:
● it is safer and more secure, discouraging riskier investment practices as a means of recovering losses.
● it has built-in flexibility to better absorb declines in the markets.
● it does not decrease benefit levels currently in place for retirees.
● it is likely to result in marginal increased contributions.
● its cost of living increases will be conditional on plan performance. When pensions are in surplus position, there is an opportunity to reinstate years when cost of living increases are not provided.
Amendments to the Pension Benefits Act that took effect July 1 give both private and public sector pension plans the option to adopt this model if they so choose. Regulations were filed on Aug. 14 to put the new model in place for the unions and groups that have adopted it effective July 1. As a result of these regulatory changes, more than one-third of the public service are members of a shared-risk pension plan.
"This is a pension model that can work for both public and private sector plans, and I encourage other unions and employers to review the model and see how they, too, might benefit from such changes to their plans," said Alward. "I believe we have set workers on a stronger course for the future in our province, and I am looking forward to continue building on the partnership we have established with New Brunswickers."
● New pension model