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Finance Minister Blaine Higgs says the government can't ignore the PSSA's $1 billion shortfall. (CBC)

The Alward government plans to host seven regional information sessions on the proposed shared-risk pension model for public service retirees, starting on Wednesday.

"We want retirees of the PSSA [Public Service Superannuation Act] to get the right information on the challenges facing the current plan and how a more affordable and secure option is needed going forward," Finance Minister Blaine Higgs said in a statement late Tuesday afternoon.

The government announced last May an overhaul of its pension system that would see increased contribution levels and higher age of retirement phased in slowly over a period of time.

The pension changes will not cut the benefits in place for retirees, officials have said.

But under the current model, the risk of any market downturns is borne by the provincial government alone.

Under the reforms, the risk would be shared by both sides.

In addition, the reforms would see cost-of-living increases made conditional on the pension plan's performance.

Last year, a number of public service unions that have defined contribution pension plans agreed to adopt the shared risk model, but so far none of the unions with much richer defined benefit plans have followed suit.

The PSSA plan covers employees who work directly for government departments and NB Power and included 13,441 pensioners as of March 31, 2012. Their average annual pension was $20,603.

In addition the PSSA has 19,611 active contributors.

"The province has an obligation to consider the long-term sustainability of the pension plan both for current and future retirees," Higgs said in the statement.

The PSSA currently has a $1 billion shortfall, which is expected to get worse, he said.

"With people living longer after retirement and interest rates at historically low levels, action needs to be taken today."

The New Brunswick Union, the Canadian Union of Public Employees Local 1252 and the New Brunswick Pipe Trades will be using the new pension model for some of their pension plans.

The Opposition Liberals and NDP expressed early support for the changes, although Liberal Leader Brian Gallant has expressed concerns that existing retirees should not be affected by any reforms.

The information sessions will include a presentation outlining the PSSA's challenges and how the proposed shared-risk model will affect retirees, said Higgs.

Government officials will be available to answer questions, he said.

Sessions will be held in:

  • Saint John, April 17, 1 p.m.-3 p.m., New Brunswick Community College gymnasium, 950 Grandview Ave.
  • Fredericton, April 17, 6 p.m.-8 p.m., Fredericton Convention Centre, Pointe-Sainte Anne rooms A and B, 670 Queen St.
  • Moncton, April 18, 1 p.m.-3 p.m., Moncton Lions Club, 55 Mark Ave.
  • Miramichi, April 18, 6 p.m.-8 p.m., New Brunswick Community College gymnasium, 80 University Ave.
  • Bathurst, April 19, 1 p.m.-3 p.m., Collège communautaire du Nouveau-Brunswick amphitheatre, Room 286C, 75 Youghall Dr.
  • Campbellton, April 19, 6 p.m.-8 p.m.: Collège communautaire du Nouveau-Brunswick gymnasium, 47 du Village Ave.
  • Edmundston, April 20, 1 p.m.-3 p.m.: Clarion Hotel, Banquet Room, 100 Rice St.