Pension plan reform discussions will not impact current retirees: government

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The provincial government announced today that though discussions on public sector pension plan reform are underway, the pensions of retirees will not be affected.

Premier Kathy Dunderdale (left) and Finance Minister Jerome Kennedy address members of the media in St. John's today. — Photo by Rhonda Hayward/The Telegram

A news release notes that meetings were held last week between the provincial government and representatives of the Public Service Pension Plan (PSPP) and Teachers’ Pension Plan (TPP).

“We have initiated a review of public sector pensions in consultation with our unions, similar to what has been done in other jurisdictions,” Premier Kathy Dunderdale said.

“I want to reassure our stakeholders today that there will be no changes to the pensions of those who have already retired.

“This process is a co-operative effort and no changes will be made to the pension plans overnight. Our goal is to work together to ensure the sustainability of the pension plans for current and future employees.”

There are 25,000 retirees in the PSPP and the TPP. In addition to ensuring there will be no changes to retirees’ pensions, including maintaining the current indexing program, government is maintaining a health plan for retirees.

Union representatives from the Newfoundland and Labrador Association of Public and Private Employees, Canadian Union of Public Employees, Association of Allied Health Professionals, the Newfoundland and Labrador Nurses’ Union and the Newfoundland and Labrador Teachers’ Association, as well as representatives of the Public Sector Managers’ Association and the Public Sector Pensioners’ Association met last week and discussed various issues including governance.

 The government has hired actuarial consultants to do high-level pension related analysis and will share all information with stakeholders.

As of March 31, 2012, unfunded pension and other post-retirement liabilities represented approximately $5 billion and accounted for approximately 64 per cent of the province’s net debt. Since 1997, nearly $4.5 billion in special payments have been contributed to the pension plans, yet the outstanding unfunded liability continues to grow.

Organizations: Public Service Pension Plan, Newfoundland and Labrador Association of Public and Private Employees, Canadian Union of Public Employees Association of Allied Health Professionals Newfoundland and Labrador Nurses Newfoundland and Labrador Teachers

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Recent comments

  • Richard Duke
    September 20, 2013 - 23:47

    Doesn't the picture say it all...

  • Stephen
    September 20, 2013 - 20:39

    Are the pensions underfunded using the actuarial formulas that have been in place for decades or are they underfunded by controversial formulas that assume a much lower return. This is critical! One is a real problem the other is questionable math favored by conservatives who want to cook the books

  • Flloyd
    September 20, 2013 - 19:10

    A word to the wise, and in Kennedy and Dunderdales cases, the UNwise: hands off my money. Yes, MY money. I have not been paying into MY pension fund to pay for retirees that have gone BEFORE me. Amen.

  • Darin
    September 20, 2013 - 12:18

    I find it odd that there was no mention of the MHA's pensions - which is by a landslide the most underfunded of all the plans. I also find it interesting that there continues to be people collecting pensions that never paid a single dime into them - ie hundreds of fisherpeople and paper mill workers. Underfunded in part because the government went years upon years with holding what they were legally obligated to pay as an employer - meanwhile still robbing hundreds of millions from the fund to build roads.........Make no wonder we are called stupid newfies... I never wanted to be part of this pension plan to begin with; however it was and is mandatory. I would rather screw myself than be screwed by the governement. The unfunded liabilty being referred to is what we call a present value fund. Simpy put - it is a calcalution that looks at the value of all future payments as if we had to pay that today. That is simply not the case. And we thought that NL'ers abused sick leave and workers comp before - just watch and see.... I may even join myself and I have been 17 years employed and have used a combined total of 8 sick days. Why bother - screw the government before they can screw you is what I say from now on.

  • MUN Poli Sci
    September 20, 2013 - 11:48

    What are the positions of the Liberal leadership hopefuls and the NDP on this issue??? Problem will not go away but could be used as political fodder, given the Dunderdale government is unpopular.

  • Bucyk9
    September 20, 2013 - 10:05

    Pension plans are suffering everywhere . Check the demographics . Thirty years ago there were three people paying into the pesion fund for every one person retiring . It is now the opposite . Defined benefit pensions will soon be obsolete

  • Gerald
    September 20, 2013 - 09:02

    A deputy minister making $150,000/year with 25 years service can currently retire with a $75,000/year pension guaranteed for the rest of their life. People are living longer than ever so if this retiree lives for 25 years they will receive $1,800,000 after retirement. Something desperately needs to change!

  • Filly
    September 20, 2013 - 07:52

    Jerome looks like he has checked out. Has he lost faith? Maybe Kathy can lend him some belly fire?

  • Mike
    September 20, 2013 - 02:57

    Yes the pensions are in trouble. I am at a loss to understand why this government (going back to Danny) has taken so long to address the problem, unfortunately, they are going about it all wrong. The board that manages the pension needed to be fired 10 yrs ago when the markets went south. The utilities in NL are a solid revenue earner and they should have made the move years ago to re-acquire them and hold them in the pension. The approach of restructuring the pension at the detriment of the public servants only shows the lack of insight, creativity and intelligence of this government.

  • j thomas
    September 19, 2013 - 21:22

    I think the government should offer retirement incentives to reduce the public service further and don't replace 70 percent of the positions through attrition.

  • j thomas
    September 19, 2013 - 21:21

    I think the government should offer retirement incentives to reduce the public service further and don't replace 70 percent of the positions through attrition.

  • Dawn O
    September 19, 2013 - 14:42

    So does this mean that the MHA's will not be eligible to avail of their huge pensions until the age of 55 or older and that they will be required to work fo a number of years before they can receive their much larger pensions??????????? SHAME ON THE UNIONS IF THEY LET THIS HAPPEN!!!!!!

  • Pension Gone
    September 19, 2013 - 14:04

    I wonder how Ms Dunderdale will make out with her pension?? Or how about Mr. Kennedy?? Im sure these folks are well looked after!!! What a joke this crowd is!!!