Fredericton approves shared-risk pension plan
Capital city's old pension system has a $60M deficit
Fredericton councillors unanimously approved a plan on Monday to convert the city’s pension plan to a shared-risk model, which has been promoted by the provincial government.
Councillors held a special meeting on Monday to discuss the move to a shared-risk pension plan. Saint John switched its troubled pension plan to a shared-risk system on Jan. 1.
The move to a shared-risk plan will mean city employees will have to work longer with fewer guarantees.
The move also means changes to the cost-of-living adjustment for city pensioners.
Fredericton's current pension plan was in a $60-million deficit.
Unions representing the city’s police officers and firefighters still remain holdouts to the new pension deal.
Andrew Dawson, a representative for Local 911, which represents the police union, said people need time to process all of the information.
The police union has turned to the province's Labour and Employment Board in search of a way to stop the switch.
The board will hear the police association's complaint on Wednesday.
Wade Keirstead, who represents the union for technical and professional employees, said his group signed onto the reforms but he said it wasn't an easy decision.
"The biggest impact is the loss of early retirement... We say early retirement, people would still have 35 years into their career but it’s certainly not something that people are looking forward to," he said.
Whether the unions agree with the reforms, the city has moved forward with the changes.
O’Brien said he would like all of the city’s unions to back the pension reform.
"They are now part of the plan. But we would certainly like them as a willing partner," he said.
Premier David Alward unveiled a shared-risk plan for provincial government employees last May and has been talking about the merits of other organizations adopting the scheme.
Under the plan, the age of retirement will be moved to 65 from 60 over a 40-year period, contribution levels will increase and cost-of-living increases will be conditional on the plan's performance.
Susan Rowland, the chairperson of the provincial pension task force, has said she believes all municipalities should join a province-wide, shared-risk pension plan.
It would protect pensions for workers and offer stability to employers by cutting administrative costs and offering better investment opportunities, she has said.
There are already 44 medium and small New Brunswick municipalities sharing a single pension plan.