NUPGE says pension reform needs to go farther

The National Union and its Components call for expansion of public pensions at P.E.I. meetings.

Charlottetown (14 June 2010) - The National Union of Public and General Employees (NUPGE) held a pension meeting in Charlottetown on Sunday.

The meeting took place while the federal, provincial and territorial finance ministers met at the Crowbush resort in Morell to discuss pension reform. Labour representatives and leaders from across Canada attended the meeting, hosted by NUPGE’s Island Component, the P.E.I. Union of Public Sector Employees (PEIUPSE/NUPGE).

There was universal agreement at the meeting that Finance Minister Jim Flaherty’s recent proposals calling for a modest and gradual increase in Canadian Pension Plan (CPP) premiums falls short of what is needed to properly protect Canadians in their retirement.

Larry Brown, NUPGE’s national secretary-treasurer, delivered a comprehensive presentation on pension protection and retirement income security.

He outlined the reasons why Canada finds itself in a retirement security crisis. The baby boom generation was part of Brown’s analysis. The baby boomers are now just beginning to enter into retirement and will account for an unprecedented number of Canadians retiring over the next 20 years. "If the retirement system is not working properly, just when we have an enormous number of people heading into retirement, then that is a bad combination,” Brown said.

He pointed to a pension system that is all too vulnerable in Canada and provided examples such as Nortel and Abitibi, where workers face losing their retirement income due to employer instability.

'There is a problem'

Brown also alluded to a private savings environment that has fallen apart in Canada as witnessed by the harsh realities of the 2009 stock market meltdown. “And if you combine these realities with the fact that two thirds of Canadians in the private sector, making between $30,000 and $100,000, don’t have enough savings to retire on, and the fact that 30% of Canadian households don’t have any retirement savings other than the CPP, then you begin to see there is a problem,” argued Brown.

Union leaders and representatives agreed with Brown that many Canadians are in a position where they will have to rely solely on the CPP and the Guaranteed Income Supplement (GIS) for their income in retirement.

Ken Georgetti, president of the Canadian Labour Congress (CLC), said when people receive the GIS in Canada it means they are poor.

"It means they will be poor for the rest of their lives in retirement. That’s not something we should aspire to, and much more needs to be done before all seniors can retire with dignity and respect. While Minister Flaherty’s proposal is a step in the right direction, it ultimately falls short for Canadians," Georgetti said.

"That being said, his proposal is an important acknowledgement of the need for CPP reform and repudiation of the idea that private savings are the solution.”

Georgetti laid out the CLC’s proposal for reform, which would double CPP benefits, increase the GIS and protect Canadian pensions through a federal system of pension insurance.

'A need for change'

Shelley Ward, president of PEIUPSE, supported the CLC’s proposal and argued that Flaherty must raise the bar.

“A modest increase to the CPP and no change in the GIS is simply not enough,” said Ward. “The majority of Canadians receiving CPP and the GIS are living below the poverty line. Therefore, there is a need for real change within our pension system for the benefit of all Canadians.”

Following the discussion about the broader pension crisis in Canada and what needs to be done to address this, the meeting heard from representatives of the various provincial Components making up the NUPGE delegation.

These reports showed clearly that there are significant pressures on public sector pension plans, most of which pressures arose from governments' failure to maintain their share of plan funding in the past. The reports also demonstrated that those Components that have achieved joint trusteeship of their members' plans were most able to effectively deal with these pressures. With joint trusteeship Components are able to directly contribute to the administration of the pension and ensure the plan is well run and adequately funded.

NUPGE pension meeting delegates will travel to Crowbush today, where the finance ministers are meeting, in a unified effort to raise more awareness about the future of the Canadian pension system.

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