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.”