My next door neighbour has a great commentary in the TJ this morning about the state of the NB Public Service Superannuation Fund. The pension funds are in good shape MICHAEL MACBRIDE COMMENTARY The New Brunswick Public Service Superannuation Fund is not in that bad of shape, thanks primarily to the contributions made by civil servants. The Fund Plan was created in 1932 and since inception and up until 2012 the civil service employees have contributed three times as much as the government to the Public Service Superannuation Pension Fund when one considers the return on investment that the contributions earned. Indeed for the first 43 years of the plan, virtually only the public servants contributed to the fund. If the government had contributed something, anything, over this period, the fund would be in even better shape. If this 3-to-1 ratio seems to be at odds with what Minister Higgs is saying, it is because he chose to start his analysis beginning in 1978. I do not know why he picked that year. Being a bit of a cynic, I must ask, perhaps it was because that date worked better for his argument to apply this draconian reform to retirees? So how bad of a condition is this pension plan really in? One way in which we can discern this is to look at what the outside objective experts are saying. Those would be the credit rating agencies of Standard and Poors and Moodys. Standard and Poors, in an article in the Telegraph-Journal on Aug. 5th states that theprovince is considered to have a moderatepension liability. Mr. Mario Angostinicotis, a director with the company, goes on to say that there are other variables that they look at, including the level of taxation, the level of spending, the level of debt and the state of the economy. Would it not be more prudent for the government to do something about these? Moodys in a Sept. 19th CBC piece says that New Brunswick had the smallest burden at 8.3 per cent. This burden was in reference to the funded liabilities to assets and was said to be the lowest in Canada of all of the Canadian provinces. Newfoundlands by comparison was 54 per cent. Pension change is necessary. However it must be fair, appropriate, well-balanced and consistent with the nature of the financial issues identified in the latest actuarial report on the concerned pension plan. Maybe we can get a copy. So why is the government focusing only on this pension plan? Why not also focus on what the credit-rating agencies say they should be correcting, like the level of taxation, the level of spending and improving the state of the economy or on the consolidated fund? Its the consolidated fund that Minister Higgs and Premier Alward cannot get a handle on. That fund, also known as the books, is where all revenues flow into and from which all expenses are alotted. This pension process change is very expensive for the taxpayer, and will just add to the expenditures in that consolidated fund. It is estimated that the cost to the taxpayer to date is in the several million dollar range. And, by the way, remember the pension task force and its original mandate? Wasnt it also to help prevent the terrible situation that befell the retirees and employees of the Saint Anne Nackawic Pulp and Paper Company? Have they been helped? Are your private pensions now better protected? Unfortunately, Minister Higgs advises thatthe train has left the station. All aboard the Higgs Express! It is now much too late to let the facts get in the way. The shared risk Dutch pension model is going to happen. Gives a whole new meaning to the termDutch Treatdoesnt it? Michael MacBride is a member of the New Brunswick Pension Coalition.
Posted on: Mon, 25 Nov 2013 12:18:13 +0000
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