In the News April 11
In Action in Defence of Rights
New Brunswick Public Sector Workers Defend Right to Retirement Security
Public sector workers in New Brunswick, organized by the Canadian Union of Public Employees (CUPE) have been waging a serious fight against the government’s attack on their pensions. CUPE NB informed in a February 4 press release that it is maintaining its status of party plaintiff in the constitutional challenge in PIPSC v. Province of New Brunswick which deals with this matter. At stake is the government’s unilateral conversion of the province’s Public Service Pension Plan from a defined benefit pension plan to a so-called shared-risks one. In 2016, the Professional Institute of the Public Service of Canada (PIPSC) launched the challenge to oppose the government’s changes.
Workers’ Forum held a conversation with the President of CUPE NB, Steve Drost, about this fight in defence of pensions. Steve explained that on January 1, 2014, New Brunswick’s Progressive Conservative government, headed by David Alward, passed legislation converting the defined benefit pension plan into a shared-risks model, affecting many public sector workers. Current Premier Blaine Higgs was finance minister at the time. Nine CUPE locals, representing 90 per cent of CUPE members in the plan rejected the conversion and have never agreed to the changes.
Steve explained that under the Public Service Relations Act, even though the workers covered are not permitted to negotiate pensions, there is an understood guarantee under the Act that their pension would remain a defined benefit one. They therefore challenged the legislation passed by the New Brunswick government, arguing it violated the Public Service Relations Act. Workers, excluded from negotiations, were never consulted, never had any input and certainly never gave their consent. Using its majority, the government had just rammed it through, despite the many protests and rallies that were held against it.
“We’re hopeful that if we have success with this case, that we’ll be able to sit down and negotiate some of the changes that are in the plan,” Steve told Workers’ Forum. We want to get our defined benefit plan back, with some modifications. If we can’t achieve that then, as a remedy, we want to make the plan we are in now a better one for the members.
“Under the present plan, our workers are now going to have to work a lot longer, they’re going to have to pay more, and their pension is not guaranteed. It also introduces penalties. In the old plan, if you retired after the age of 55 but before the age of 60, there was a 3 per cent yearly penalty because you left early. They changed that into 5 per cent a year. Under the old plan, your pension rates were based on your best five years of income. Under the new plan, it’s career averaging. This reduces your pension payments at the end very significantly. Higher penalties, lower payouts and there are no guarantees because there are caps in terms of what the government is liable for.”
At the moment, after a career in the public service, public sector workers, such as CUPE workers, can only expect a very modest retirement pension, a CUPE press release notes. The inadequate retirement pension is part of the low wage, low income that plagues the economy in New Brunswick and contributes to the phenomenon of workers migrating out of the province.
“We know that having an adequate and secure workplace pension plan is what separates seniors with financial security from those experiencing poverty. Whether in the courts or in the streets, CUPE will always fight for workers to have a secure, adequate, and predictable retirement income,” Steve said in the press release.
Workers’ Forum, posted April 11, 2022.