Pen­sion­ers con­tinue fight for in­dex­ing

The Compass - - OPINION -

Dear edi­tor,

On Sept. 13, the Pen­sion­ers Coali­tion launched its com­mu­ni­ca­tions cam­paign tak­ing pub­lic sec­tor pen­sion­ers’ con­cerns di­rectly to the peo­ple of New­found­land and Labrador.

At this press con­fer­ence, past pres­i­dent of the New­found­land and Labrador Pub­lic Sec­tor Pen­sion­ers’ As­so­ci­a­tion, Robert Lang­don, stated that “ the pro­vin­cial govern­ment has bro­ken its con­tract with pen­sion­ers by re­fus­ing to ad­just pen­sions for in­fla­tion.”

In the Sept. 14 edi­tion of The Tele­gram, Fi­nance Min­is­ter Thomas Mar­shall dis­missed pen­sion­ers’ con­cerns when he stated that “ pen­sion­ers never paid for an in­dexed pen­sion when they were work­ing, and so the money isn’t there now.”

As was ex­pected, the min­is­ter con­tin­ues to de­lib­er­ately con­fuse the facts in an at­tempt to pub­licly jus­tify the govern­ment’s stead­fast re­fusal to rem­edy their mis­man­age­ment of OUR pen­sion funds. This ap­plies specif­i­cally to the fol­low­ing:

The Pub­lic Ser­vice (Pen­sions) Act, 1968 was ini­tially de­fi­cient in that all pen­sion con­tri­bu­tions were paid into and mixed with other rev­enue in the prov­ince’s con­sol­i­dated rev­enue fund. While we ex­pected our pen­sion de­posits to be safe­guarded, our pen­sion funds in­stead paid for the devel­op­ment of our prov­ince.

In the be­gin­ning, the govern­ment did not match work­ers’ con­tri­bu­tions. No in­vest­ments were made and no pen­sion fund was cre­ated. As a re­sult, the pen­sion fund that was fi­nally es­tab­lished in 1981 was sad­dled with sub­stan­tial li­a­bil­i­ties and un­der­fund­ing. These re­al­i­ties con­tinue to haunt us and the govern­ment con­tin­ues to use them as an ex­cuse not to im­prove our present pen­sions.

Govern­ment failed to make the em­ployer’s con­tri­bu­tions to the pen­sion plans for a three-year pe­riod from 1991 to 1994. This added to the pen­sion fund’s li­a­bil­i­ties.

It is true that, as a re­sult of the At­lantic Ac­cord, the govern­ment was able to ap­ply over $3 bil­lion to the pen­sion plans. How­ever, this was not enough to cover the losses due to the pre­vi­ous mis­man­age­ment and due to the fail­ure to pay the em­ployer’s share dur­ing the “con­tri­bu­tion hol­i­day” of the early 1990s.

More­over, this de­posit was de­signed to fore­stall the col­lapse of the pen­sion plans which would have had a neg­a­tive im­pact on the govern­ment’s fis­cal rep­u­ta­tion.

De­spite Min­is­ter Mar­shall’s opin­ion that pen­sion­ers never paid for an in­dexed pen­sion, the facts are to the con­trary:

For a nine-year pe­riod, the govern­ment rec­og­nized that the con­tract with its work­ers in­cluded in­dex­ing and there­fore un­til 1989 it reg­u­larly en­acted leg­is­la­tion (In­crease of Pen­sions Acts of 1980 to 1989) to com­pen­sate for the rise of in­fla­tion.

Un­for­tu­nately, since the uni­lat­eral dis­con­tin­u­a­tion in 1989, pen­sion­ers have seen the value of their pen­sions di­min­ish at a rate where they are now worth about 50 per cent of the value at the time of their re­tire­ment.

The govern­ment’s recog­ni­tion that it owed its for­mer work­ers in­dex­ing en­hance­ments led to a par­tial cost of liv­ing in­dex, in­tro­duced in 2002. How­ever, this is capped at 1.2 per cent of the CPI mak­ing our pen­sion plan the one with the worst in­dex­ing ben­e­fit in Canada.

In sum­mary, the govern­ment did not live up to its le­gal, con­trac­tual, moral and eth­i­cal obli­ga­tions.

The mem­bers of the New­found­land and Labrador Pub­lic Sec­tor Pen­sion­ers’ As­so­ci­a­tion and our af­fil­i­ated part­ners in the Coali­tion call upon the govern­ment to ac­cept its re­spon­si­bil­ity to rec­tify the in­equities that mark the present pub­lic sec­tor pen­sions’ sit­u­a­tion. These are due, not be­cause the for­mer work­ers did not pay for in­dex­ing, but rather, they are due be­cause of past gov­ern­men­tal mis­man­age­ment.

Shar­ron Cal­la­han Pres­i­dent of the New­found­land and Labrador Pub­lic Sec­tor Pen­sion­ers’

As­so­ci­a­tion.

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