June 28, 2013: Last month, CARP reported on New Brunswick’s new and controversial approach to public pension plan restructuring with the introduction of the Shared Risk model. CARP has since learned that legislation and regulation enabling the conversion of the Public Service Superannuates plan to the Shared Risk model means that retirees, including those who retired before the conversion, are now exposed the risk of retroactive benefits reductions. This represents a historical change in the way pension rights are dealt with in Canada. Up until recently, there has been a long-standing, legally enshrined tradition in Canada of protecting retirees’ pension rights.
This exposure to risk of retroactive benefits reduction comes on top of the loss of guaranteed cost-of-living indexation. And to make matters worse, the New Brunswick government amended pension legislation to rule out litigation against the province or pension plan administrators by aggrieved retirees, leaving no option for recourse.
As a result, CARP wrote an open letter to New Brunswick’s Minister of Finance, Blaine Higgs, asking the New Brunswick government for clear, legislative protection of earned pension benefits for all pre-conversion retirees in New Brunswick. We will continue to report on developments, including the Minister’s response to our letter.