The NLEC has been a very vocal advocate for public sector pension reform for the last four years, particularly around pre budget consultations and budget announcements. Multiple meetings with Finance Ministers and other cabinet ministers helped to drive the importance of pension reform home to our government.
On September 2nd, 2014, former Premier Tom Marshall announced that, following negotiations with most public sector unions, a deal has been reached to reform the majority of public sector pensions and retirement plans in this province. The deal establishes a plan to eliminate the massively unfunded public sector pension and post retirement liabilities, projected to account for 85% of our province’s net debt in 2015.
While this deal is nowhere near the type of reforms seen in the private sector, any deal is better than no deal. These reforms included the establishment of a joint trusteeship to govern the plan – meaning both government and unions will be responsible for the sustainability of the plan into the future. Government projects these changes will bring the pension plan to a funded position within 30 years. Thirty years is a long time, but without this deal, there were projections that the first of the Public Sector Pension Plans may have been bankrupt in 7 years. The NLEC will continue to monitor the success of the reforms.