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'No decisions have been taken yet to reduce any benefit or increase contributions.'
Fredericton (14 Sept. 2010) - The New Brunswick Union of Public and Private Employees (NBUPPE/NUPGE) has issued a statement clarifying pension issues related to an ongoing court case affecting the pensions for more than 10,000 public employees in the province.
"We want to emphasize that no decisions have been taken yet to reduce any benefit or increase contributions and any action would have to follow legal rules that prevent the reduction of retirees’ current pensions and the vested benefits of employees," the statement says.
"As many members are aware the Hospital Pension Plan for Certain Bargaining Employees (CBE) covering nurses and other health care professionals in the Regional Health Authorities (RHAs), has been underfunded for some time. The financial crisis of 2008-9 resulted in losses for this plan, and while the financial markets have recovered somewhat over the last year, the plan remains underfunded on a going concern basis," the union adds.
"The plan actuaries have recommended to the parties to this plan (the provincial government, the New Brunswick Nurses Union (NBNU) and NBUPPE) that in order to meet the long term obligations of the plan, there must be either an increase in contributions, a decrease in benefits or a combination of both."
The union says it has been advised that the pension plan committee, which includes representatives from both unions as well as government and RHA representatives, has been pursuing two courses of potential action to deal with the long-term funding problem.
"First, the committee has recommended to the parties the adoption of a funding policy which would eliminate the necessity of negotiating increases in contribution levels into the pension plan. Such a formula would require an increase in both employer and employee contributions whenever the plan’s assets fall below a stated ratio of its long term liabilities. The increased contributions would remain in place until the plan was again in a surplus position. NBNU and NBUPPE have met with government to push for the adoption of this policy. To date there has been no agreement," the union notes.
"Second, the committee has gone to court to seek clarification of its powers as a committee to make changes to contribution or benefit levels. Any changes in contribution levels or benefits would not affect the vested benefits of current employees or retirees. This means, that by law, current pensions of retirees cannot be reduced. No decision to increase contributions or cut any benefit has been made by the committee or the parties to this plan. No change would be made without adequate notice to the members of the plan."
Full time registered nurses and other health care professionals in the Paramedical and Specialized Health Care Professionals bargaining groups, who work for RHAs, are covered by the CBE plan. Hospital employees represented by the Canadian Union of Public Employees (CUPE) are in another plan.
NUPGE
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE
More information:
• N.B. case has big implications for Canadian retirees
• New Brunswick government stalling pension reforms
• N.B. legal fight for control of public pension plan