Liberals question legality of proposed pension reforms

The Opposition Liberals are questioning whether proposed pension reforms for retired civil servants are legal, based on a Court of Queen's Bench decision in 2011.

Finance Minister Blaine Higgs stands behind government’s proposed changes

The Opposition Liberals are questioning whether proposed pension reforms for retired civil servants are legal.

Retired civil servants could lose their annual cost-of-living increases when markets perform poorly under the proposed changes.

Liberal MLA Victor Boudreau pointed to recent unrelated lawsuit where a Court of Queen’s Bench judge ruled an employer could not unilaterally change the rules for cost-of-living increases in pension benefits.

Still, Boudreau stopped short of calling the reforms illegal.

"We don't have the resources to do that type of legal reference," he said.

"But obviously the province does and could very easily refer this to the courts to get a reference from them."

Finance Minister Blaine Higgs had acknowledged during one of a series of public meetings with retirees last week that he wasn't sure he could legally change the pension rules.

After checking with government lawyers, however, he said Tuesday he is sure.

"I received an answer that said yes, we could," said Higgs.

Will review case law

But Attorney General Marie-Claude Blais seemed unprepared for Liberal questioning about the 2011 case, which involved hospital workers across the province.

Justice William Grant had said the primary purpose of cost-of-living adjustments "is to protect retirees from inflation because of their vulnerable circumstances arising from the fact that upon retirement their income is otherwise fixed and they are no longer able to bargain better remuneration to counteract inflation."

Grant directed the committee that oversees the pension plan for the New Brunswick Nurses Union and the New Brunswick Union of Public and Private Employees to refrain from making adjustments to cost-of-living adjustments for retirees.

The provincial government will look at legal precedents, said the attorney general.

"We will look at every decision, every legal decision that could have an effect. And our decisions will be taken, taking into consideration all legal decisions," Blais said.

Meanwhile, Boudreau wouldn't speculate about whether the Liberals would cancel the reforms or change parts of them if they win next year's election.

Retirees have argued it’s not fair for the government to change their benefits retroactively and have suggested they will take the government to court to fight the reforms if necessary.

Retired civil servants are currently sheltered from any risk of market downturns by the provincial government. Under the reforms, however, the risk would be shared by both sides.