Fredericton — Despite growing objections, the Gallant government has started the new year with a revamped strategy for New Brunswick’s looming pension funding deficit. Finance Minister Roger Melanson announced the changes on Monday to address the $1-billion deficit.
Members of CUPE New Brunswick were there to show their support for the changes, calling it a step in the right direction.
The new pension plan is being called a modified shared-risk plan and will be 100-percent lottery based. Under the new plan, the government will match all member contributions, then invest those funds into weekly 649 draws, VLTs, scratch tickets and pull tabs. Melanson predicts it will create 30 new jobs as staff are sent to gas stations to manage the pension contributions.
“The low-risk, low-return investments are coming up short. These civil service pensions were created, at the time, by people who didn’t really care about paying for them,” the minister said. “We need an investment vehicle that produces greater returns; lottery investments may save the province millions in pension shortfalls.”
He went on to say, “Under the new plan, staff will be sent to local Irving stations where they will purchase all available pull tabs. We will have 17 deputy ministers going to local dive bars to invest in VLT-based pensions. If the deputy minister can get the bonus, or a line of bells, that’s a great thing for retired New Brunswickers.”
Danny Légère of CUPE New Brunswick said, “I’m not sure how we would have done that, or whether other parties would entertain that, but it’s certainly an avenue we’ll be exploring for our members in the PSSA.” When asked about how CUPE members wanted their lottery-based pension invested, Légère replied, “We have some members who want to put it all on black and others that want to choose the same 649 numbers each week. Who will oversee when the deputy minister should hit the cash-out button?”
“We need a high rate of return to keep our retired teachers and civil service workers flushed with a guaranteed income, regardless of returns or how the pension fund performs,” said Bonny Hoyt-Hallett of the New Brunswick Pension Coalition. “For every dollar they paid into their retirement, the government should pay $30; we’d like to see that climb to $75 in the future.”
The Opposition Conservatives wonder how far the reforms will reach, saying they support the plan, but disagree with the premier’s favourite numbers of 6,14,17, 28, 35 and 45. They would be more willing to support the changes if the proposed “max bet” strategy was tempered to a lower-risk bet of $2.