Retired civil servants mull pension-reform lawsuit
Pension Coalition is asking members whether it should sue over shared-risk pension plan
A coalition of retired provincial civil servants is surveying its members on whether to sue the New Brunswick government over proposed changes to their pension plan.
Pension Coalition NB, which is made up of hundreds of retired provincial government workers, is touring the province and raising concerns about the financial implications of the province's plan to convert civil service pensions to the shared-risk model.
Clifford Kennedy, a member of the coalition, said the group is presenting two options to its members at their meetings.
One option is to wait until the changes are put into effect and the other is to challenge the reforms in court.
The legal route, Clifford said, would be costly.
"It's a very, very expensive option and we've indicated so to the members of the coalition who attended [Tuesday’s meetings],” he said.
“The base minimum is at least $100,000 and could be over $200,000. If they tell us to go forward, there will be a fundraising campaign as a legal fund.
Under the shared-risk model, any future risk would be split between employees and the provincial government.
The proposed model, announced last May, included increased contribution levels and a higher age of retirement, phased in over 40 years.
Finance Minister Blaine Higgs held his own public meetings in April to discuss the pension reforms.
At those meetings, he told retired public servants that he was “embarrassed” about how the pension reforms had been handled.
Actuary given access to pension numbers
The pension coalition invited its actuary to talk to members about the impact of the proposed changes.
Robert Blais said he's been given complete access to the provincial government’s pension numbers and accepts the government's claim that there is just a 2.5 per cent chance pensions will be ever have to be reduced.
The real danger is the scenario where cost-of-living increases are withheld in future, according to the actuary.
Under shared-risk models that can happen if investment markets fall and the plan doesn't perform as well as expected.
The pension coalition is also planning to continue its fight against the proposed changes. A collection was taken to build a war-chest for pension reform-related activities that Kennedy said will last until the next fall’s provincial election.
"I'm going to advocate and continue to advocate,” he said.
Liberal Leader Brian Gallant attended the coalition’s pension meetings on Tuesday. He said Liberal members will be at the coalition’s nine remaining meetings.
Gallant said the Liberals would like to see further study of the proposed changes.
"We think there should be a judicial review. We think that it's incredibly important that there be consultation and we think that it's important that the numbers be run by the auditor general,” he said.
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.