CHARLOTTETOWN – The president of the province’s largest civil service union says she believes action will likely be taken against the P.E.I. government’s pension reforms.
Debbie Boyver, president of the Union of Public Sector Employees (UPSE) said the changes announced Tuesday to civil service pensions could result in retirees receiving 30 to 50 per cent less in their pension plans, according to estimates provided by an actuarial from Ontario retained by UPSE.
The changes are so controversial, Boyver is likening them to the 7.5 per cent wage rollback introduced in the 1990s by former Liberal premier Catherine Callbeck’s administration.
“There’s a lot of people upset with this,” Boyver said.
“Retirees are very concerned about being able to afford to live. They’re calling us asking, ‘Where do I go if I can’t afford my pills anymore?’ This then puts a strain on social programs… people see this as worse than the 7.5 per cent rollback.”
Both UPSE and the Canadian Union of Public Employees (CUPE) were vocal Tuesday in opposing the changes coming soon to public sector pension plans. Those changes include the elimination of guaranteed cost of living increases and a change in the calculation of pension earnings from the best three or best five years to a career average, adjusted to inflation.
Government says the changes are necessary in order to curb hundreds of millions in pension shortfalls that could to cripple the province’s economy if left at status quo.
But CUPE spokesman Bill MacKinnon said the province’s changes go too far.
"We think this is too drastic, we think this is unnecessary to go this far and we’re going to tell our members that,” MacKinnon said.
“Yes, changes are needed. Radical changes are not.” MacKinnon said.
The two unions recently presented government with a a counter proposal which they claim is more moderate and would ensure the plan is 100 per cent funded, rather than funded to 120 per cent, as government aims to do.
The union proposal would have eliminated the deficit in the pension funds within three to five years, MacKinnon said.
The two unions believe their proposal was brushed aside and accuse government of barreling ahead after promising to continue to negotiate for a few more weeks. Instead, a hastily called news conference, originally scheduled for Friday and later cancelled, was held Tuesday afternoon.
Premier Robert Ghiz and Finance Minister Wes Sheridan said their pension reforms would go ahead regardless of whether the unions are on side.
Boyver said the union is upset at the whole manner in which the plan is being rolled out.
“We’ve spent 16 months as well going to meetings with the understanding we were going to work out a plan together, and that’s not the end result,” Boyver said.
She also pointed to a letter penned by Ghiz to UPSE during the 2011 election campaign in which he promised, “no changes would be made to the pension plan without concurrence” from the union.
When asked about this letter Tuesday, Ghiz said he tried his best.
“But at the same time I have a responsibility as premier to make sure that… I protect the pensions that are out there and that I protect the taxpayers.”
Both Boyver and MacKinnon said they will go back to their members and their executives to decide how they will respond to government’s hard line.
In the meantime, UPSE has meetings planned across the province to voice its concerns over the pension changes.