Plans will better safeguard retirement incomes without burdening taxpayers, he insists
New Brunswick Premier Blaine Higgs has followed through on his promise to address pension concerns by introducing legislation that would supersede existing contracts, affecting 16,200 public workers and retirees. The move aims to transition them to new pension plans, with the premier asserting these plans will better safeguard retirement incomes without burdening taxpayers.
The introduced Pension Plan Sustainability and Transfer Act has stirred controversy, the move leading to protests with labor leaders burning signed collective agreements and memoranda of agreements.
The legislation affects five groups, including school and school district workers and nursing home workers, moving them from defined-benefit pension plans to shared-risk plans, where payouts have a targeted goal.
While the Canadian Union of Public Employees (CUPE) contends that the premier broke his word, a lawyer and pension expert hired by the government maintains the legality of the bill. The premier justified the move, saying that “it's about making sure these employees have a pension plan comparable to other employees within the provincial government, and that there's enough money in those pension plans to pay those employees into their retirement.”
Debate and controversy
The premier’s actions have sparked debates about the rights of unionized workers and the government's interference in collective bargaining agreements. The controversy arises from the perceived breach of signed agreements and concerns about the impact on workers' pension benefits.
Legal experts have weighed in, with the government asserting the legislation's legality in overriding existing contracts. The move is seen as a response to the unsustainable financial situation of current pension plans, with a shortfall of $285 million.
Higgs argued that the proposed shared-risk plans would be fairer and more sustainable, with a one-time cost to taxpayers of about $365 million. The government aims to address the financial gap in existing plans and prevent future taxpayer bailouts.
“The plan that CUPE came back with, several months ago, was the exact opposite of what we were trying to achieve as a sustainable pension model. It would have been hugely costly to taxpayers. So, it was no consideration for taxpayers of the province at all,” says Higgs.
“And I don't believe the employees who belong to CUPE feel that way at all. I believe they want a fair pension plan, fair benefits, and they should have that. And I want to achieve the very same thing,” the premier adds.
