N.B. case has big implications for Canadian retirees | National Union of Public and General Employees

N.B. case has big implications for Canadian retirees

Toronto pension lawyer says precedent set by court could affect retirees depending on other financially stressed pension funds across Canada.

Toronto (13 Sept. 2010) - Canadian retirees should pay close attention to a public sector pension case now making its way through a New Brunswick court, says Toronto pension lawyer Hugh O'Reilly.

How the provincial Court of Queen's Bench rules in the case affecting more than 10,000 New Brunswick public employees could have implications for pension funds covering untold numbers of retirees across Canada, O'Reilly argues.

The pension committee of the Pension Plan for Certain Bargaining Employees (CBE) in New Brunswick is seeking guidance on how to deal with a $300-million deficit on its $1-billion fund.

The committee operates on behalf of members of the New Brunswick Union of Public and Private Employees (NBUPPE/NUPGE) and the New Brunswick Nurses Union (NBNU).

"This case has enormous implications," O'Reilly told CBC News, noting that should the judge rule that benefits may be cut it could set a precedent putting cost-of-living adjustments in jeopardy within stressed pension plans elsewhere across the country.

"You may have retired with a belief that your indexation was fully protected and this could come out and interpret vesting in a different way and could take away that right," O'Reilly says.

The CBE is asking the court for direction on a variety of options to deal with the deficit. These include the possibility of cutting benefits, increasing contributions or adopting a combination of both options.

Last year, the CBE put forward a proposed solution on behalf of the unions to add a funding policy to the plan. If implemented, it would involve both sides contributing whatever money is necessary to stabilize the plan.

The proposed change would mean increased contributions of about $48 every two weeks for members earning $60,000 a year. The government's share has been estimated at $7 million.

Justice William Grant, who is hearing the case, acknowledged this week that the New Brunswick plan faces serious problems. He also criticized the province's Liberal government for dragging its feet in dealing with the situation, noting that the issues could be settled by the parties "sitting down and doing something about it."


The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE

More information:
New Brunswick government stalling pension reforms
N.B. legal fight for control of public pension plan