Pension expert says N.S. civil servants should put more into pensions

The Canadian Press ~ The News
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HALIFAX - Nova Scotia civil servants, teachers and others in struggling public pension plans should start paying more into them and accept reduced benefits, a pension expert says.
Bill Black, who led a committee that made recommendations to the province on private-sector pensions a year ago, says the Dexter government must take steps now to ensure the public-sector plans are viable and not a burden to taxpayers in the long run.
Black, who is mulling a run at the provincial Tory leadership, lays out the pension issue on his website,
The two major plans are the Public Service Superannuation Plan and the Nova Scotia Teachers Pension Plan.
Both, like most other public- and private-sector plans, suffered deep losses in 2008 because of the stock market freefall. The public service plan ended the year 64 per cent funded, with a deficit of $1.7 billion. The teachers' plan was 71 per cent funded, with a deficit of $1.5 billion.
Even if both pension plans bounced back a bit with the markets last year, they still have a difficult road ahead because they're not sustainable with current contributions, Black says. The number of retirees is growing and there aren't enough people paying into the plans to keep the current level of benefits, he says.
Black, on his website, says plans should become "target benefit plans," often seen in construction trades. He said they basically provide fixed contributions, while benefits are adjusted to what's affordable.
He says plan members already make significant contributions but they should increase those to up to 10 per cent of salary, and that should be the maximum level the government matches.
Members of the public service plan and government increased their contributions last year. In announcing the increase, then-finance minister Jamie Muir said it was a first step toward improving the plans' health.
Current Finance Minister Graham Steele and Steve Wolff, CEO of the Nova Scotia Pension Agency, were both unavailable for comment Tuesday.
Black isn't calling for benefit reductions for current retirees, though he believes indexing provisions should be on hold until the plans are healthier, as is already the case with the teachers' plan. He also says the eligibility for retiring with a full pension should be lengthened gradually.
It would be clear that any future surpluses would not belong to the employer, and all employer and employee contributions would go to pension benefits, he says.

Organizations: Tory, Public Service Superannuation Plan, Graham Steele and Steve Wolff

Geographic location: Nova Scotia

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Recent comments

  • Reg
    March 01, 2010 - 14:39

    I would love it if my employer would match up to 10% of my contributions!!! These civil servants have it too good at the expense of the taxpayer.