Roger Melanson offers new pension deal for civil service retirees
Finance minister does not offer details about new proposal but says some concerns of shared-risk plan covered
The Liberal government has given public service retirees a new pension offer, Finance Minister Roger Melanson announced on Monday.
Melanson says he is hopeful the retirees, who launched a lawsuit last June over the switch to a shared-risk model, will accept the offer.
"We had many conversations with them, good dialogue, very constructive dialogue, we believe, and we, you know, made a proposition to them that respects the fiscal framework of our province," he said.
"As we all know, we have some fiscal challenges here in the province, and we had committed in our platform that we would discuss with them and still respect the fiscal reality of New Brunswick."
Clifford Kennedy, spokesman for Pension Coalition NB, the group fighting the changes imposed by the former Alward government, says it has heard "nothing official" from the Gallant government about the latest offer.
The former government had established a base date of Jan. 1, 2014, stipulating that each retiree's pension would not be reduced below what they were earning on that date.
But the retirees want that base recalculated yearly, based on cost-of-living, which would effectively eliminate the base reference point because the amount of their pensions would grow with inflation.
The coalition has until May 14 to file a statement of claim with the Court of Queen's Bench if its lawsuit is to proceed.
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Ari Kaplan, the group's lawyer, says he wants a meeting with Premier Brian Gallant and Melanson before he recommends any settlement.
The government's proposal is unclear, he said.
"I have a lot of questions about it. I need a meeting with them to understand it better."
Kaplan says one concern is some kind of guarantee that a government wouldn't be able to turn around and legislate another change in the future that would undo any settlement the retirees accept.
While in Opposition, the Liberals had criticized the public sector pension plan reforms announced in May 2012 by the then-Alward government.
They said they would like to see further study and debate about switching to the shared-risk model, which has civil servants and retirees taking on more risk for the pension fund's performance.
"This will be seen as one of, if not the, most important pieces of legislation [the Alward] government will put forth in its mandate," then-Liberal Leader Brian Gallant had said.
"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," Gallant had said.
Charter breach alleged in lawsuit
The reforms were passed into law in December 2013, with a 33-9 vote along party lines, forcing 33,000 current and former civil servants out of their defined benefit pension plan and into a new shared-risk model.
Last June, the New Brunswick Pension Coalition launched a lawsuit over the changes, alleging the government breached the charter rights of 13,000 pensioners because they are vulnerable, based on their age.
Under the former public service pension plan, retired civil servants were sheltered from any risk of market downturns by the provincial government with guaranteed cost-of-living increases.
Under the reforms, the risk is shared by both sides.
Other changes include increased contribution levels and a phased-in higher age of retirement.
Retirees maintain it's not fair to change their benefits retroactively.
Former finance minister Blaine Higgs had been pushing the pension reforms for two years, arguing that with retirees living longer, the pool of pension money may not be enough to cover their benefits.
During a series of public meetings, when Higgs was confronted by hundreds of public servants who were angry about a lack of consultation, he said he was embarrassed about the poor communication surrounding the switch, but maintained the changes were necessary for the financial health of the province and the long-term survival of the pension plans.