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“Our union remains committed to protecting public pensions and ensuring the government lives up to its promise to protect them as well." — Michelle Gawronsky, MGEU President
Winnipeg (16 Jan. 2018) — Earlier this week, the Manitoba government announced plans to launch a public review of Manitoba pension law. If introduced, potential changes would be cause for concern for many Manitobans, including members of the Manitoba Government and General Employees' Union (MGEU/NUPGE) and their families, who have planned their futures based on the current provisions in pension legislation.
Public pension plans at risk with government changes
“Manitobans who have worked hard for many years and invested in their retirement deserve to retire with income security. They should feel confident that their long-term financial plans won’t be derailed by the short-sighted changes proposed here,” said Michelle Gawronsky, MGEU President.
The Pension Commission reviews pension legislation (the Pension Benefits Act) every 5 years. The commission makes recommendations to the government on changes it feels are necessary. Tim McGorman, Pension Commission vice-chair is quoted in the Winnipeg Free Press saying the major recommendation proposes changes to defined-benefit plans. He said recommendations would “relax” funding requirements and result in lower contributions for employers.
In addition, new pension plan designs are contemplated in the recommendations, including target benefit pension plans and shared risk pensions plans.
Target benefit pension plans and shared risk pension plans pose the following risks to members:
- provide less benefit certainty to members with potential reduction in benefits during retirement;
- have the potential to create a 2-tier plan where existing members would keep their defined benefit plan, while new hires would be subject to potential reductions if the plan doesn’t meet targets;
- open the door to promote the full conversion of a defined benefit pension plan to less predictable benefits under a defined contribution (DC) pension plan. Conversion to DC plans have shown in many cases to be more costly to the plan rather than yielding savings; and
- don’t require the employer to fund deficits.
MGEU/NUPGE fights to protect retirement security
New Brunswick’s Shared Risk Pension Plan currently has 3 legal challenges against its conversion from a public sector pension plan to a shared risk pension plan.
McGorman said he was unable to say what effect the changes would have on workers’ pension contributions and retirees’ payments.
Meanwhile, Gawronsky says it’s important to note that the PC party pledged to MGEU/NUPGE members during the 2016 election that they would make no changes to public pension plans if elected.
“Our union remains committed to protecting public pensions and ensuring the government lives up to its promise to protect them as well," says Gawronsky.
There will be no public meetings on any of the proposed changes. Instead, those affected are asked to submit comments on the government’s website at pensions@gov.mb.ca. The deadline to submit comments is February 21, 2018.