Retirees steadfast against pension changes, coalition says
Finance minister's meetings to try to sell reforms 'waste of time'
A whirlwind province-wide tour by the Finance minister to try to sell changes to the pension plan for retired civil servants was a waste of time, says a spokesman for Pension Coalition NB.
Retirees maintain it's not fair to change their benefits retroactively and will take the government to court if they have to, said Clifford Kennedy.
"Without a doubt in every single meeting people indicated … 'Leave our pensions alone. We signed a contract, we fulfilled our obligations and what you're doing is unethical and immoral," he said.
Four members of the Coalition delivered the same message during a meeting with Premier David Alward earlier this month, but to no avail, said Kennedy.
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.
Guaranteed cost-of-living increases will also be eliminated for pensioners and instead be dependent upon market performance.
Kennedy contends when the premier announced the pension reforms in May, he said they would be applied on a go-forward basis only.
Then, in December, the government amended the Pension Benefits Act and "basically protected themselves from being sued," he said.
"We know clearly that our only option is to go to court if we don’t come to an understanding."
Finance Minister Blaine Higgs, who held information sessions in seven cities over four days last week, has said the current plan is not sustainable.
"We're not ignorant in regards to the fact that changes do need to be made," said Kennedy.
But it should not be on the backs of retirees, he said.
"Never did they ever think there could be a potential cut in the indexation — and even a potential reduction in their base benefit," Kennedy said, referring to the experience in the Netherlands, which is the model the New Brunswick reforms are based upon.
Although several of the Dutch plans have performed extremely well, with returns of up to 13.7 per cent, indexing has been eliminated this year and base benefits have been cut by 0.5 per cent, with another 1.6 per cent cut projected for next year, he said.
"That is 6.2 per cent reduction in two years on a plan that’s performed extremely well," said Kennedy. "That is scary."