Pension problem will plague Premier Coleman

Randy Simms
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Premier Frank Coleman says he wants to fix the province’s public pension plan. He says it’s an issue that’s been “kicked down the road”  and it’s time to do something about it.

The unfunded part of the public pension plan for civil servants is now up over 70 per cent of our total net debt and, according to Coleman, it is not sustainable.

In an interview with CBC’s David Cochrane, Coleman outlined a number of things he would like to do as premier, but he really focused on the public pension plan — the defined benefits plan that makes long-term employment in the public service so attractive. In fact, for years — until the fishery collapsed and the international economy took a nosedive — getting a job with government was like winning the lottery.

This was one of the issues Kathy Dunderdale said her administration was going to look at immediately after signing a new contract with NAPE. Now Premier Coleman is saying much the same thing, noting “those obligations are not sustainable going forward. It needs to be dealt with. It just can’t be ignored.”

He doesn’t have a solution to the problem right now, but says, “it’s an issue that I’d like to tackle if I am deemed to be the leader,” bringing together all of the “interested parties” to work out a solution that’s satisfactory to everybody.

Premier Coleman is dreaming in Technicolor. There is no solution that will satisfy everybody, and if you touch the pension plans of those already in your employ you will face everything from illegal strikes to civil disobedience. Consider yourself warned, Mr. Premier.

Coleman says he doesn’t know how to solve the pension problem but he actually indicated how he’d fix it even if he didn’t mean to. His solution is to grandfather in everyone in the public service today, so that their pension expectations will be met, but change the rules for new entrants.

This has been done a lot in private-sector companies and at some quasi-government agencies, like fire departments. It has not been done without upheaval and it would be naive to think the unionized civil service would go along with it willingly.

If a shift of that magnitude could be coupled with an increase in the Canada Pension Plan, it might  lessen the blow for new employees, but that would require federal government help. Considering the priorities of the Harper administration, support for that idea will be hard to come by. And even if such a thing could be timed properly, public-sector unions are not going to give up defined public pensions without a fight.

Premier Coleman should understand this going in and he should know, as well, that for the entire one year of his administration he will  be dogged by this issue.

And, yes, I realize that calling him “Premier Coleman” in advance of the leadership vote could be labelled as premature or arrogant, and that in doing so I am implying that some kind of fix is in. But it’s not so much a fix as the logical outcome.

Think about it for a minute: no one in the Tory caucus wanted the top job. Not one sitting Tory MHA wanted to be premier. That may say more about the people Coleman will lead than it does about Coleman, don’t you think?

Bill Barry shot himself in the foot on opening day and has not recovered.

Wayne Bennett was so far out there that any real consideration of him said more about his supporters than it did of him. He is now out of the race so Coleman only needs to wait it out and the top job is his. So “Premier Coleman” it is.

By the way, Premier Tom Marshall will be stepping down immediately following the leadership convention so the new premier can run in Humber East.

We can say with certainty that the fix is in on that one.

Randy Simms is a

political commentator and broadcaster.

He can be reached at:

rsimms@nf.sympatico.ca

Twitter: @RandyRsimms

Organizations: CBC

Geographic location: Technicolor, Humber East

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Recent comments

  • Mike
    April 06, 2014 - 12:06

    Nice article Randy, but I thought you missed an important point. Tom Marshall has been our finance minister for seven of the past nine years. He identified this as a potential crisis back in 2009 and did nothing. He sat on his butt and watched the pension crisis grow out of control. His legacy will be the soft-spoken politician that accomplished nothing! Of course all the tories, including Mr. Marshall, will want credit for everything good that the oil gave us.

  • Paul
    April 05, 2014 - 09:32

    as I understand it, the pension fund is under funded because it was spent for decades like general revenue for the benefit of everyone in NL. so it only stands to reason, and all concept of fairness, to pay it back from the general revenue. Why make public servants pay it back with reduced benefits or increased premiums? doing that will make us pay for those roads, schools and hospitals twice while the rest of the people get a pass. if it comes from GR, we all pay for it,...which is only fair since we all benefited from it.

  • Check it out
    April 05, 2014 - 08:39

    Before Coleman promises to fix it, he should take a closer look. A few days ago there was a story on the pension liability and there were different opinions as to what it is. Some think it is what is owed now. Another opinion is that is what it is owed 30-35 years down the road and includes severance and health benefits. Govt doesn't say what it is. $7.3 B is a big number. How many pensioners are there? How could they be owed that much? If the number includes money that won't be paid for another 30 years, not sure if that is relevent. The plan is in trouble but I don't think it is as bad as govt says it is. Somebody please explain?????

  • Charles
    April 05, 2014 - 06:20

    Laughable, The fix is in, no more then the fix was in concerning the Liberals leadership race, Has for Mr Coleman he going to do no more concerning unfunded pension then the rest, just more talk, hoping to buy the voters vote, Has for Bill Barry he only in this race about one thing, He scare about what about to take place concerning the fishery. Randy did you take notice to Dwight Ball and Cathy Bennett talking about jobs creation concerning our people. My question to Dwight, where have you been the past three years. Has for Cathy Bennett great supporter of the foreign workers policy, Yes sir you can say we have a fine crowd to chose from.