Now that were in election season, I hope you dont mind if I submit the original column that helped to start this ruckus. Way back - before there was a Pension Coalition and before there was a Facebook site - the Daily Gleaner, on January 5, 2013 published a slightly condensed version of this as an Opinion Column under the heading A DEAL IS A DEAL - LEAVE OUR PENSIONS ALONE. The next week, the Telegraph Journal published an open letter from me to Blaine Higgs. Well, you know the rest. PSSA retirees phoned, e-mailed, wrote letters, contacted MLAs and a month later, the Pension Coalition was formed. I thought it would be useful to remind ourselves just why we are right and how the Governments actions were so offensive so we can use this info over the next 4 months. I upset some by referring to their action as de-indexing our pensions but I maintain that conditional indexing - not tied to a legitimate standard (ie. like CPI) but to fund performance - is not indexing (certainly not guaranteed indexing). Its more like profit sharing added to the base. If you doubt that, just add conditional to a word and see if it has the same meaning (eg. marriage vrs conditional marriage, offer vrs conditional offer). So, read this and lets get fired up all over again!! FROM JAN 5, 2013 - THE DAILY GLEANER (below) ....................................................................... The Shared Risk Pension Plan AND De-Indexing Provincial Government Pensions For Existing Retirees Recently, several New Brunswick newspapers carried an article about an ad-hoc group of retired New Brunswick public servants who say they want to be part of the discussion on public service pensions and particularly the part where such pensions for current retirees may become “de-indexed” (ie. will no longer received the PROMISED indexing if the cost of living rises beyond a certain percentage). I wish to take issue with this ad-hoc group. Their approach is wrong. Retired provincial government employees and other retirees in the Public Service Superannuation Act (PSSA) do NOT want to be part of the de-indexing discussion – they want NO SUCH DISCUSSION TO TAKE PLACE! Note what was promised to all eligible employees covered by the PSSA as late as 2011 if they retired: It is important to note that the PSSA is an indexed plan, meaning that future benefits are adjusted for changes in inflation, to a maximum inflation rate of 5%. (From the 2011 PSSA Newsletter to retirees etc) Will my pension be protected against inflation? After you retire, your pension benefit is reviewed, effective January 1st for a possible cost of living increase, in accordance with the Consumer Price Index (CPI). (From the April 2011 Pension Information Booklet put out by the New Brunswick Office of Human Resources) Sounds clear, doesn’t it. Your pension would be indexed using a publicized formula based on the CPI. Plain, simple and GUARANTEED! As a taxpayer, I have no trouble with the Alward Government’s goal to have pension plans for its current employees being self funding and removing the financial risk to taxpayers to subsidize public sector pension plans. Contribution rates, length of service, age of retirement and salary are all things that go into a pension plan. Existing employees, many of whom have a bargaining unit to speak for them, can make decisions during their employment to plan for their retirement – something current retirees cannot do (unless the province intends to hire them all back to adjust for any future financial shortfall should their existing pensions be de-indexed). First of all, pensions are really “deferred salary”. Todays public sector retirees “earned” their pensions over the length of their career. Part of their compensation was deferred to be their pension upon retirement. Their employment contract wasn’t just wages – it included certain benefits (eg. medical and life insurance, holidays, a pension plan etc). In other words, the “total compensation” paid to an employee was not just their salary – it was the total cost of the salary and other benefits that employee received in return for going to work and doing their job. THAT WAS THE DEAL! Often the premium for benefits – including pension – was shared between the employee and Government and the benefits were strictly defined. As a New Brunswick public sector employee, one knew what their benefits cost them and what their benefits would be. In the case of pensions, those eligible employees enrolled in the public service pension plan (and that includes a number of employees at the University of New Brunswick where I worked for 25 years) knew their pension would be based on a combination of their age of retirement, average salary of their five highest earning years and years of service. They also knew, because it was part of the pension plan (the one used to help stress “total compensation during bargaining), that there was a guaranteed formula to index their pension should inflation go beyond a certain amount. In other words, everyone who retired under the current PSSA did so with a GUARANTEE their pension would be indexed! There was no “maybe, we’ll see” – it was GUARANTEED to be part of that retiree’s pension – PERIOD! Until last spring, I was the President of the UNB Retired Employees Association representing several hundred UNB retirees. There was NO CONSULTATION by the Government with our group concerning pension reform – NONE! Since Bargaining Units CANNOT represent those who are no longer their members, no amount of consultation with them can replace actual discussions with retirees. I would also point out that part of my job at UNB was to serve as Chief Spokesperson in Collective Bargaining with support staff (CUPE and UNBEA). I was repeated told by senior management and Board of Governor committees to stress “total compensation” versus simply wages when “selling” a contract offer. In terms of pensions, that included “indexing” as defined by the PSSA. I was also hired several times by the Provincial Government to be its representative in Conciliation with several Bargaining Units (Forest Rangers, Social Workers). There too, I was instructed by senior government officials to stress “total compensation” INCLUDING the pension plan. In other words, employees at both UNB and the Provincial Government accepted Collective Agreements, in part because they knew their pensions had to be indexed if economic circumstances required. There was to be NO DISCRETION – this was the DEAL, plain and simple! Not “highly likely” but indexed PERIOD. In fact, I and thousands of employees received regular official pension updates which included indexing information. De-indexing pensions for those already retired will not pass the “smell test”. It is a stretch of the words “on a go forward basis’ to remove pension de-indexing from those already retired. In other words, it is misleading. Indexing was part of the “going forward” basis for the pension plan of existing retirees and word games will not change that. I think most New Brunswickers agree with the concept of making pension plans more sustainable. However, to negatively impact those who took the Government sponsored deal in good faith should not fall victim to a reduction in their future pension income – which was actively promoted by the Employer to be “guaranteed”! I know – I did it and I was told by those in authority (who were also acting in GOOD FAITH) to do so. To me, this is not a public employee versus private sector issue. It is really a moral question. Should the people we elect have the ability to “undo” the employment (or any) contract long after that contract is over. Retirees are no longer employees. They should no more have their guaranteed pension arrangements altered than the Government can reduce their salary from decades ago. It is completely wrong to consider this and I believe any politician thinking of moving ahead with de-indexing pensions to existing retirees lacks a sense of fairness. I applaud the Government for looking at the future of pension plans for existing employees but drawing existing retirees who played by the rules into this discussion is morally wrong. I challenge every MLA and Party Leader in New Brunswick to publically announce their unwillingness to de-index public service pensions to existing retirees before the end of January. No statement will be taken as a rejection by affected retirees. In fact, because I live in New Maryland, it is my hope that the first MLA to reject de-indexing pensions to existing retirees will be my MLA, Jack Carr, who has shown himself to be a caring and active representative. It would be a shame if our MLAs were “out thought and out compassioned” by the federal government who had the good sense to phase in changes to the Old Age Pension gradually and not affect existing recipients. All existing PSSA retirees are asking for is what they were promised – nothing more –and that means not being part of a discussion on the future of our pensions because there really is nothing to discuss! A deal’s a deal! David Wiezel worked for over 30 years with both the Provincial Government and University of New Brunswick and is in receipt of a pension under the PSSA.
Posted on: Wed, 21 May 2014 22:26:44 +0000
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