Higgs tries to defuse furor over pension reforms
Finance minister says province 'not going to war'
Finance Minister Blaine Higgs is trying to defuse the growing controversy of the provincial government’s proposed changes to the pension system for the civil service.
The finance minister has held a series of meetings around the province in recent days that have been attended by more than thousand angry retired civil servants.
He has been forced to apologize to the crowds for the provincial government’s handling of the pension reforms, even though he admits he had not been involved in the process until recently.
"I am embarrassed ... This program, this pension plan, I haven’t been involved with closely until this point in time. But I will be involved with it directly," Higgs said in an interview on Friday.
The controversy surrounds the proposed pension reforms.
Retired civil servants, under the current plan, are sheltered from any risk of market downturns by the provincial government.
Under the reforms, the risk would be shared by both sides.
Premier David Alward unveiled the proposed model last May, which included increased contribution levels and a higher age of retirement phased in over a period of time.
The retirement age will be increased to 65 from 60 over a 40-year period under the proposed model. Higgs said he’s dealing with a situation where some people may now be retired longer than they actually worked for the provincial government.
The finance minister said in the last budget he had to book $53 million in additional liabilities because of new mortality levels in the pension program.
The Public Service Superannuation Act (PSSA), which covers employees who work directly for government departments and NB Power, currently has a $1 billion shortfall.
It included 13,441 pensioners as of March 31, 2012. Their average annual pension was $20,603.
Province ‘not going to war’ on pensions
The finance minister has been confronted at these public meetings by many pensioners, who have relayed their deep frustration with the provincial government’s changes.
In Fredericton, Susan Merrill, a retired school teacher, passionately told Higgs how she had lost faith and trust in him and concluded, "I hope you don’t sleep well either."
Higgs said he’s trying to explain the provincial government’s position and reduce the anger about the reforms.
"I’m doing my part to minimize the hype and get the facts out there. I was not feeling very good about the meetings because things were said to me personally that I take very dearly," he said.
He said much of the controversy has been generated because of a lack of "good, clear information."
But many people at the public meetings have warned Higgs they will punish the Alward government at the polls in next year’s election if the changes go forward.
Betty Smith, a retired teacher, said on Thursday, "there will be war in the province before this is over."
The finance minister did his best to downplay such rhetoric.
"We are not going to war on any issues," Higgs said.
"What we are prepared to is to continue to explain to individuals and we are asking for their help to be part of the solution to a greater problem in this province."
There will be more pension reform meetings on Friday in Bathurst and Campbellton and in Edmundston on Saturday.