Employers’ council against call for more benefits

Daniel MacEachern
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Newfoundland and Labrador Public Sector Pensioners’ Coalition president says it wants fairness, not special treatment

Richard Alexander

The Newfoundland and Labrador Employers’ Council says a recent call by a public sector pensioners’ group for increased pension benefits amounts to former government workers demanding taxpayer money to which they’re not entitled.

Richard Alexander, executive director of the council, said Monday that misleading information is being spread by the Newfoundland and Labrador Public Sector Pensioners’ Coalition, adding the coalition doesn’t represent all former public sector employees.

“Essentially what they’re asking for is for the provincial government to increase the benefits in their pension above and beyond what was promised to them initially, and that’s obviously at the expense of taxpayers,” he said. “So we want the public to understand exactly what it is they’re asking for, and we disagree with what they’re asking for.”

Alexander said his council’s biggest problem is with the defined benefit pensions received by members of the coalition, some of which are indexed to inflation.

“A defined benefit pension plan basically means that before someone chooses to retire … they know exactly how much money they’re going to get from their pension every month for the rest of their life,” he said. “That type of pension is exceedingly rare in the private sector because it’s incredibly expensive.”

To demonstrate the expense, Alexander noted the provincial government currently has $2.2 billion in unfunded pension liability on the books despite paying $4.4 billion into the pension fund since 1997, and rejected pensioners’ assertions that the fund is mismanaged.

“That’s not correct. Pensioners are getting exactly what was promised under their pension program,” he said. “What they’re asking for is an additional benefit above and beyond what they’ve paid for in their pension.”

But the president of the pensioners’ coalition board of directors says it’s Alexander and the NL Employers’ Council who are wrong.

“We’re going around the province and having meetings and we’re taking our situation, our issues in a more public forum,” said Sharon Callahan. “Mr. Alexander’s comments are incorrect, they’re false and they’re misleading. Pensioners are not looking for any kind of special treatment from government; we’re just asking for fair and equitable treatment from the government. The money that pensioners paid into a pension fund is a part of their terms of employment with the government. It was an arrangement that was built on trust and certain expectations that the government would match the contributions, that the government would honour its commitment to that arrangement.”

Callahan said the provincial government has broken its side of that arrangement.

“Pensioners have been making contributions ever since the plan was put in place. However, our partner in that arrangement, the government, took holidays from that plan. They froze wages, they employed wage rollbacks, all of which had an impact on the benefits that pensioners expected to receive when they went to retirement. They are the issues we are trying to convince government that they have a moral, legal and ethical obligation to rectify.”


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Geographic location: Newfoundland and Labrador

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Recent comments

  • Jill
    April 24, 2011 - 14:26

    "We paid into it" If all Taxpayers were shown the calculations of the million dollar pensions and how little was actually paid into them, the taxpayers would see these scheisters for what they really are.

  • braidy
    March 30, 2011 - 23:36

    Alexander said his council’s biggest problem is with the defined benefit pensions received by members of the coalition, some of which are indexed to inflation. “A defined benefit pension plan basically means that before someone chooses to retire … they know exactly how much money they’re going to get from their pension every month for the rest of their life,” he said. “That type of pension is exceedingly rare in the private sector because it’s incredibly expensive.” In regards to Alexander’s first statement Newfoundland public service pensions are partially indexed to inflation and not fully indexed to inflation based on the Consumer Price Index as are federal pensions such as GIS, OAS and CPP. The federal government has been indexing its pensions to CPI since 1974. I put it to Mr. Alexander if he is recommending that personal exemptions and small business exceptions be de-indexed under the income tax act. Why such we be indexing tax exemptions for tax payers and businesses and not pensions. I want him to come forward and recommend full de-indexation of all tax exemptions. This will provide provinces and the federal government with a huge increase in taxes to help balance their budgets and reduce deficits. In regards to his second point he claims that defined benefits pension plans are very rare you need to go back in time to 1999 when according to Fortune magazine close to 70% of the top 500 companies had defined pension plans. These companies have transferred the risks to employees who they claim are much better able to deal with market risks. This has to be one of the most cowardly acts in modern history. The largest corporations do not have the ability to deal with market risk but employees do.

  • Braidy
    March 30, 2011 - 14:56

    I worked for the provincial government from 1979 until 1991. The provincial government had a defined benefit program at the time. It paid 2% a year for every year of service up to 35 years resulting in a pension of up to 70% of the employee’s salary based on the average of the employees best five years. Historically Newfoundland followed the British system in which retirees received the same annual increases that the public servants received. This ended in 1991 when Clyde Wells was the premier. From 1991 until the early 2000s retirees got no increases. This resulted in windfall gains for the provincial government because the provincial government pension is blended with CPP which is indexed. Every year when CPP went up the amount the province had to pay to its retirees decreased. In the early 2000s the provincial government introduced partial CPI indexation. This is far less than if it was tied to the rate of increase the employees in General Services group received. Danny Williams gave his employees a 20 % increase over four years which helped to correct the lost wages of the employees in the years of wage freezes. Provincial retirees did not get any where near this increase in their pensions. While Mr. Williams helped to fix the rate of pay for current employees he did fix the significant loses in the standard of living that employees who retired before 1991 incurred. In my opinion Clyde Wells did a grave injustice to provincial retirees when they stopped giving the same increases public servants received. It was particularly difficult for them because they would not have been able to see it coming and make alternative arrangements. Today Newfoundland is a have province with a balanced budget. It saddens me that part of the reason it is were it is today is because of the millions the oldest and weakest members of society lost from their pensions. I call it a betrayal of a sacred trust.

    • Tommee
      March 31, 2011 - 08:50

      We also have a massive debt thanks to you baby boomers. Now you want more, get lost.

  • NFW
    March 30, 2011 - 08:09

    Not a g.d. cent more for this group. They're getting what they negotiated. They were well paid in comparison to today's public service, they saw high inflation in their day so they knew first hand what he did to cost of living but didn't push for a better pension plan. That's what happens when you live in the now and don't plan for the future.

  • Ev
    March 30, 2011 - 07:27

    Most people here don't seem to know or care that the government of this province did not pay a cent into this pension fund for the first 13 years and to add insult to it, they took the money paid in by employees and use it to build roads and hospitals. So the taxpayers of this province benefited from our pension fund, now they don't want governments to repay this forced loan. I am disappointed in the attitude of my fellow Newfoundlanders, who are usually happy to help out those that are hurting through no fault of their own.

  • Ed
    March 29, 2011 - 17:33

    Public Service workers are getting what they are entitled to under their agreement with the government. If they did not like the terms of the agreement they should do what we do in the private sector - find another job with the terms you want. I do wonder why you stayed in the public sector if it was such a bad deal ?

  • Ed. A.
    March 29, 2011 - 17:15

    the public sector association is spreading lies when they say the nfld taxpayers do not pay for their pensions. the very least we expect from their leaders is to be honest with their members. they are getting every cent they negotiated and voted for. also signed for when they retired. they are not the only pensioners struggling to get by and stay warm these days, so if they are given extra funds then every pensioner in nl. has a good court case to receive the same amount.

  • Bill A
    March 29, 2011 - 17:00

    With all the rhetoric between the two sides on this issue, you would think that someone would come up with the cost. Before I jump on or off this bandwagon, I would like to know mow much it would to add $5, $10, $20, $25 permonth to each pensioner, not forgetting of course, that 5 bucks added to current pensioners monthly cheque would have to be added to every one who retires in the future. Why doesn't the govt put na acturary to work on this and give us the cost???

  • Bill
    March 29, 2011 - 14:08

    I think Mr. Alexander should probably run for Mr. Harper as his concept of corporate tax breaks so that private industry can make millions more profit and not consider a shared pension plan with their workers appears to be where his arguments are coming from. I agree with P F Murphy "Years ago there was an Act called "The Increase of Pensions Act" and when the pensions of the retired public servants used to get to a poverty level due to inflation the provincial govt would from time to time give them an increase in their pension levels." This would help them stay out of poverty. Currently, the attitude of Marshall and Dunderdale is that you must fall well into poverty to qualify for the provincial social safety net. They too, along with Mr. Alexander, might be gone once we see the results of the October provincial election. As it stands now, the Provincial MHA's supporting the likes of Sullivan and Manning are starting to show contempt for their local supporters as well.

  • P F Murphy
    March 29, 2011 - 11:26

    Years ago there was an Act called "The Increase of Pensions Act" and when the pensions of the retired public servants used to get to a poverty level due to inflation the provincial govt would from time to time give them an increase in their pension levels. The great cheapskate, Premier Clyde Wells, stopped this because he didn't have the money and from his great distance above society, he didn't care. This "agreement" that out of the goodness of their hearts, govt would fund a increase for destitute existed outside any collective agreement, had no set time period, didn't necessarily cover the high paid pensioners and was a moral agreement if anything. For Alexander to say "you got what you've got" is the normal fish merchant mentality but it will get him in the end when no one has the money to spend in his members' stores. Perhaps the pensioners should pay more attention to who Alexander's members are and expedite that effect!

  • Darren
    March 29, 2011 - 11:23

    Hey Edmund - give me the chance and I'd walk away from that plan anyday!!! The whole problem is that it forced on you... BTW - the reason there is an an unfunded liability is that the government took breaks from thier contributions. We can't take any breaks on our taxes.. Government can find money to bail out employees who work for private pulp and paper company's and many more in this province - but they can't find or put that money into "their" unfunded portion of a legally negeitiated agreement. Probably would be like me trying to tell my bank that I cannot pay my mortgage for the next three months because I want to go on a trip - and by the way - being able to get away it!!!!!

  • Darren
    March 29, 2011 - 11:14

    When I started working 10 years ago, I did not have a choice but to join the PSPP. Had I had the choice, I would not have, but rather taken my contributions and that of my employer and gone my own route with it. I believe we should sue the government in a class action - heaven knows they get sued for everything else - right down to moose accidents... Just look at what the MHA's did for themselves after CRA got on their backs - look at their generous pensions plan and all the goodies therein. It's amounts to nothing but a farse - a democratic tyranny......... I don't believe in the PSPP - I would like to get out of it along with my money. I don't trust the government who is in charge and my predictions is that premiuims will rise and benefits will fall as we go forward..

    • Edmund
      March 29, 2011 - 12:24

      Hey Darren, sure you had a choice. You could resign your job with the Prov. Gov. and have looked for a job in the private sector and had $0.00 of employer matching contribution OR you could have been smart enough to figure out inflation etc. and what you would need to contribute extra to your oun RRSP to have enough, so please do not make excuses that you and other pensioners are not getting enough. Also, I am confident that those displaced workers in the pulp and paper industry and fisheries etc. or those who have been maimed in a moose accident would love to trade places with you. If you don't have enough, consider going back to work, like I had to do or taking on a part time job. It's an expensive place to live now, with or without a government pension. I would suggest harder without one, so, be thankful and if you are not happy with the way the government is spending our money, offer yourself as a candidate or make you vote count in the next provincial election. As for not wanting to be a part of the PSPP good luck with your own RRSP without the employer contribution - have you looked at the interest rates over the past 5 years for individual RRSP's??? Be careful what you wish for. Sometimes you may be better off with what you have and you can't have it both ways.

  • Edmund
    March 29, 2011 - 10:54

    I am 100% in agreement with Mr. Alexander. The Government employees are getting exactly what they paid for and signed for. Must have looked real good at the time. Unfortunately, a lot of us in the private workforce were not privy to such exotic benefits and had to depend on what we, as workers without pension plans, put into RRSP's, if we could. Stop complaining and be thankful that you had jobs that gave you pension plans complete with employer contributions. If you are not happy with that go after your union representatives who negotiated for you and acted on your votes to negotiate your contracts. Same old, same old...Much wants more but often gets less. Try thinking about putting yourselves in our place, those with no pensions, except what we saved of our hard earned dollars and the CPP and OAS that we will have to depend on and then try telling all of us that you have a problem. Welcome to the real world. Oh and yes, you did not have to retire as early as you did. You could have kept working, like the rest of us, to make sure you could make ends meet. But, that would have taken some planning, something that government employees lack when they are guarenteed a pension which the rest of us paid for and could only dream of. Sounds like you are bored with nothing to do during the winter months, we never hear about this during the summer when all you government pensioners are vacationing. Stop complaining and be thankful that you at least have a pension. You have no public sympathy on this issue. Move along.

    • KD
      March 29, 2011 - 11:35

      Edmund You are dead on time for these people to quit whinning

    • Richard Evans
      March 29, 2011 - 12:11

      Mr. Alexander doesn't give a rat's bum that you don't have a pension plan. He just wants you to identify with your boss and engage in union and public sector-bashing. He's doing all right, Jack.

  • Brett
    March 29, 2011 - 09:35

    Hey maybe you're right Politically Incorrect. Maybe the employees should shift to a defined contribution plan in the future so there aren't these types of problems. I don't see why there is a public debate about this issue though. Either the gov't is keeping to the contract they signed or they aren't. Wouldn't this be a court case?

  • Fristrated taxpayer
    March 29, 2011 - 09:24

    Alexander has it right for once. It would be discrimination to gift additional benefits to public sector retirees above their negotiated pension without giving the same benefit to those in the private sector. If government is going to use public money to do anything to help seniors, it should be based on need, not where the retiree spent their working career. Perhaps the public sector retirees' former union might be wiling to help them out. Don't hold your breath on that one though, they only suck from the government teat, not give anything back.

  • Abdul Saieed
    March 29, 2011 - 09:22

    I seem to remember Mr. Alexander praising the Conservative corporate tax cuts and refusal to improve the CPP a coupe of days ago. Somehow I don't believe that they are as concerned about the general public as they are their own profit margins. While Harper complains about the dreaded "coalition," he forgets to mention his coalition with the big business interests. A vote for the Conervatives is a vote for this bunch.

  • John
    March 29, 2011 - 09:19

    Mr. Alexander hit the nail right on the head. You get what you pay for. This group paid into a defined contribution plan rather a defined benefit plan and this is exactly what they are receiving - i.e. they get "X" number of dollars per year of service as long as they live and or the percentage the surving elegible members of his/her family are entitled to as opposed to getting "X" number of dollars per year of service increasing with the cost of inflation. Despite the NL Public Sector Pensioners Assn. saying that they aren't looking for special benefits, it can NOT be described as anything else. Yes, they have been paying into the plan since its inception, it is a defined contribution plan. A defined benefit costs more than the plan they paid for and that is what the government is paying them. I do NOT want my tax dollars paying an undeserved benefit - a defined benefit plan which they did NOT pay for as opposed to a defined contribution plan which they paid for.

    • Michael
      March 29, 2011 - 10:12

      I agree 100%.

  • Bob R
    March 29, 2011 - 08:42

    When Mr. Alexander retires, I assume he gets a pension, at least CPP. Will he be content with that in 25 years when it is below the poverty line? Will he be content to look at his neighbour on welfare living better than he is? I don't know the numbers but maybe they should look at the plan so we don't have senior citizens living in poverty.

  • Politically Incorrect
    March 29, 2011 - 08:18

    It seems like Mr. Alexander is reading from the same playbook as Scott Walker in Wisconsin: blame public sector workers for the mess made by the capitalists, divide the working class by (falsely) painting public sector workers as riding the gravy train and pitting them against the “taxpayer.” Wisconsinites were smart enough to see through this… what about Newfoundlanders?