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