Teachers' pension up next for reforms
Alward government hopes to convince union to switch to shared-risk model
Just days after a bill to reform civil service pensions in New Brunswick was passed, the Alward government is turning its attention to the retirement benefits of teachers.
The government hopes to convince teachers to accept the new shared-risk model.
Education Minister Marie-Claude Blais says she wants to open talks with the teachers' union — within limits.
"We have adopted the shared-risk model, but at the same time there is flexibility on the 'how,'" she said.
Shared-risk pensions reduce the province's long-term financial liability, particularly for pension funds that don't have enough money to cover future pensions.
But the teachers' pension is healthy, so there's less incentive for teachers to change.
Teachers' Federation co-president Peter Fullerton says he also expects Premier David Alward to keep a promise that pension payments won't be reduced.
"Actions speak louder than words and at this point the premier's credibility is at stake," he said.
The federation has little leverage, however. The teachers' plan, like the civil servants' plan, is legislated — not part of a union contract, meaning the government can ultimately do what it wants.
The government recently forced 33,000 current and former civil servants out of their defined benefit pension plan and into a new "shared-risk" model, which shifts more costs to employees and restricts the growth of their retirement benefits.
Employees will have to increase their own contributions to the pension plan by 30 per cent or more starting next spring, even though benefits they can accumulate will be less generous.
The government did, however, give in on cost of living adjustments after a huge outcry, guaranteeing their pension payments won't drop if markets perform poorly.