New Brunswick has been chronically underfunding the pension plan established for the province’s nursing home workers, says CUPE.
They have a defined benefit plan where they contribute 8 per cent of their pay. The aim is to have an average guaranteed pension of roughly 7300$ annually.
Government underfunding of its portion has been going on for years, says CUPE, leading to a 112 million dollar deficit.
The underfunding first came to light in an actuarial report done in 2018, said CUPE Pensions researcher Emily Niles said in a press conference on Thursday.
The union made several attempts to rectify the situation with the province with no progress, she said.
“We’re left with no choice today but to file legal action, because every year the situation is getting worse,” she said. “The plan is further deteriorating. The last numbers we had at the end of 2020 show the plan was 83% funded. The year prior was 88% funded.”
Murray Gold, a pension lawyer hired by CUPE, explained that the underfunding is the result of pension contributions having been frozen since 2010.
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“The general rule is that you pay the cost of the pensions that people are earning in the year, and this is what we’re asking for,” he said on Thursday. “This is a pretty standard way to fund a pension plan.”
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CUPE has filed a formal complain asking the New Brunswick Superintendent of Pensions to intervene by forcing the province to allow for greater contributions from both employer and employees.
Premier Blaine Higgs said on Thursday that the pension plan was unsustainable, and wants to see it changed to a shared risk pension plan, like most provincial government plans.
“We know that we have an obligation to keep cheques flowing to the people that are on pensions. Whether we have to go any further than that at this stage remains to be seen, but my focus is to change this plan as we have all the others for the most part.”
CUPE is prepared to take the province to court if nothing comes of the formal complaint.
“It’s a minimum requirement,” Gold said. “If you offer a pension plan, you have to have the money set aside to pay the pension. You can’t promise someone a pension and then not put the money aside.”
This isn’t the first time CUPE has challenged the provincial government on pensions. In 2021 they received a ruling in their favour for school bus drivers, maintenance workers, and custodians, when a national labour arbitrator ordered the province to pay back almost 70 million dollars to fix years of underfunding to their pension plan.
The province has asked for a judicial review of that decision.
“I am just really disappointed that this continues to be a discussion, particularly with CUPE,” a noticeably frustrated Higgs said. “Where does this discussion end, and the reality set in that this pension reform really does work? Let’s just get on with it.”
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