Court File No.:
IN THE COURT OF QUEEN'S BENCH OF NEW BRUNSWICK
TRIAL DIVISION
JUDICIAL DISTRICT OF FREDERICTON
IN THE MATTER OF AN ACT RESPECTING PUBLIC SERVICE PENSIONS
BETWEEN:
PENSION COALITION NB, CLIFFORD KENNEDY JR., VIOLA SAVAGE, DEBORAH MCCORMACK, and RITA DUNNETT
Applicants,
-an
HER MAJESTY THE QUEEN IN RIGHT OF NEW BRUNSWICK as represented by the ATTORNEY GENERAL OF NEW BRUNSWICK and THE MINISTER OF FINANCE and the BOARD OF MANAGEMENT, the SUPERINTENDENT OF PENSIONS, and the TRUSTEES OF THE PUBLIC SERVICE SHARED RISK PLAN
Respondents.
AFFIDAVIT
I, CLIFFORD KENNEDY JR., of Beaver Dam, in the County of York and Province of New Brunswick, MAKE OATH AND SAY AS FOLLOWS: 2
A. Introduction
1. I am an applicant in this proceeding. I am a resident of New Brunswick and am a
Pensioner receiving pension benefits under the pension plan formerly provided by the
Public Service Superannuation Act, which has been converted in An Act Respecting
Public Service Pensions.
2. I am a founding member of the Pension Coalition NB (the "Coalition", or
"PCNB"), which is also an applicant in this proceeding, and I am the official
spokesperson of the association and sit on the Steering Committee. The PCNB is a
voluntary association of Pensioners who have retired from employment with the
Province. The PCNB was established in Fredericton New Brunswick in January 2013.
The PCNB is run by a steering committee of unpaid volunteers who reside in the Greater
Fredericton Area. The PCNB has books and records and an operating bank account in
Fredericton, has internal rules of organization, conducts business on a day-to-day basis, and is accountable and responsible to its constituency. The Coalition's objects are to represent Pensioners whose retirement savings have been converted by the Province in
An Act Respecting Public Service Pensions.
3. I have personal knowledge of the matters to which I hereinafter depose in this Affidavit. Where I do not possess personal knowledge, I have stated the source of my information, or it comes from a document that has been shown to me by our counsel, or is in the Book of Documents, and in all such cases, I believe it to be true and, in the case of a document, I believe it is a true copy of the document identified.
3
4. Where reference is made to documents and exhibits, in this affidavit and in the
Notice of Application, including in footnotes, the reference is to a document identified
and listed in the attached Index of Documents, at Exhibit "A" attached hereto. These
documents and exhibits are collected in a Book of Documents, which is attached hereto
as Exhibit "B", with separated tabs between them, and they form part of this my affidavit.
Other affiants make reference to documents and exhibits too, and these are contained in
the Book of Documents. For convenience, the Book of Documents contains all exhibits
and other documents directly or inferentially cited in the Notice of Application, or by any
of the affiants, and contains other relevant documents in the public realm implicitly
arising from the application, that may be referred to by counsel, a future affiant, or may
otherwise be of assistance to the Court hearing this application.
5. Capitalized terms not otherwise defined herein shall have the meanings ascribed
to such terms in the Notice of Application.
6. I make this affidavit in support of the application brought by myself and others in
connection with An Act Respecting Public Service Pensions and for no other or improper
purpose.
B. Background
1) Personal
7. I am currently 62 years old. I was a public servant for the Province of New
Brunswick for 25 years and 10 months. I began my career in the civil service of the 4
Province of New Brunswick on August 1, 1978, at 27, with the Department of Sport,
Recreation and Culture as the Manager of the Fredericton Region. My annual starting
salary was $18,000. One of the major projects I worked on was to spearhead province-
wide research on the Recreation Council System (150 plus councils), from an historical
perspective to recommending changes and strategies for the future.
8. When I was first hired, I was aware of the pension package that was available and
that certainly attracted me to the civil service. Naturally, we were obliged to participate
in this pension regime, as it was against the law not to do so. My contributions to the
pension plan were automatically deducted from my pay by the province on a bi-weekly
basis, thereby reducing my ability to set up other savings vehicles. In addition, there were
many years during my 26 year tenure with the Province that there were no salary
increases. The government always used as an excuse that we had a guaranteed pension
plan, with guaranteed Cost of Living Adjustment (COLA), to compensate for the wage
freezes.
9. In 1982, I became a Provincial Recreation Consultant working on provincial policies, procedures and strategies for the Recreation System.
10. In 1988, I assumed the position of Senior Policy Advisor for the Department
Tourism, Recreation and Culture and held that position for 2 years. 5
11. In 1990, I was appointed Director of Regional Development for Tourism. I was
responsible for offices and staff throughout the province. One of the major projects was the development of Themed Regions for tourism marketing.
12. In 1992, our department was amalgamated with the Department of Commerce and
Technology and I was appointed Manager of Regional , Development for Economic
Development, Tourism and Culture. Again, I was responsible for offices and staff throughout the province. One of the major projects was the development of a five-year
$15M financing package for the Regional Economic Development Commissions, whose primary work was to assist in the growth and development of manufacturing companies and other small businesses.
13. In 1996, I was appointed to the Investment Attraction Division of the Department as an Investment Project Executive. My initial market was`the Greater Montreal area for three years and six months. Then, I developed a sales strategy for the Italian market and was assigned to Italy for two years and six months. In addition, projects took me to
Ireland, Scotland, England, the US and other parts of Canada. My major accomplishments included the attraction of 5 companies that established their operations in the province. It resulted in the creation of 327 full-time jobs at an average salary of
$40,000 per year (when the provincial average was $29,000 and the national average was
$35,000). In addition, the total investment by these five companies was $75M of new money into the provincial economy, plus the salaries, benefits, supplies and the
6
outsourced contract work to other manufacturing companies in New Brunswick. I was
proud of my contribution to this initiative.
14. In 2002, I was appointed as Manager of the Manufacturing Industries Unit of the
Department of Business New Brunswick (formerly Economic Development, Tourism and
Culture). In this capacity I was responsible for regional manufacturing sector engineers
working to create new product and market opportunities for New Brunswick
manufacturers. Two of the major projects undertaken in this capacity was the
development of the Advanced Manufacturing Strategy and the implementation of the
Excellence in Manufacturing Consortium for the growth and development of
manufacturing companies in New Brunswick.
. 15. On May 31, 2004, I accepted an early retirement Work Force Adjustment (WFA)
package from the Province. I was age 52 at the time. This package is referenced in An Act
Respecting Public Service Pensions, and as a result of that Act, my supplemental benefits
can be revoked, suspended, reduced or increased by Board of Management. I fear that
any negative impact to this remuneration would put me in a bankruptcy position. This is a
critical component to my pension, not to mention the Cost of Living Adjustment
(COLA). My annual salary on May 31, 2004 was $77,172 and the average of my best
five years was $68,640, on which my base pension was determined.
16. Since my pension did not come into effect until August 1, 2006, I had to find
employment to compensate for the loss of income. I was hired by the Town of Caraquet 7
, on July 1, 2004 and worked there until October 31, 2007 in the capacity of Investment
Attraction Officer and subsequently President and CEO of AcadieNord, a corporation
responsible to the Town Council of Caraquet New Brunswick. Investment opportunities
came from several locations across Canada, US , China, Thailand, Bangladesh and India,
where I travelled with the Mayor of Caraquet.
17. My first pension cheque commenced August 24, 2006, and included the base
pension of $2,589.09 per month plus an additional amount for the WFA (Work Force
Adjusment) of $456.90, all these amounts are gross before income taxes. Today my
pension cheque includes the base pension of $2,994.07 plus the WFA of $528.35 on a
monthly basis, gross before taxes. These increases are due to the COLA, which is a key
component to our pension benefits and without which my wife and I could not survive.
At age 65, my base pension will drop to approximately $2,500 per month plus the WFA
which will drop to approximately $440 per month, all these amounts are gross before
taxes.
18. My wife Norma Kennedy is also a retired civil servant and her pension cheque is
$2,987.25 monthly, before taxes. Without both of our base pensions and my WFA
ancillary benefit and both potentially not receiving COLAs, we certainly would not be
able to meet our financial obligations. It definitely concerns us both that under Bill 11,
the COLA is conditional, as the pricing escalation is going to impact on our purchasing
power. -8-
19. My wife and I have been providing primary care for my mother-in-law for the last
21 years. She is presently 92 years old. There are extra costs relating to living expenses
and all kinds of doctors and other personal appointments .. That is gas we would not normally expend, not to mention the wear and tear on the vehicle.
20. It should be noted that I had several opportunities available to me in the private
sector during my 26 year career with the public service of New Brunswick. However, I chose to remain in the public service because the guaranteed pension plan, and its guaranteed ancillary benefit (COLA), were extremely attractive.
2) Task Force on Protecting Pensions
21. When I and other Pensioners retired under the PSSA, we were told by the
Province that our pensions were secured by the Province. For example, in 2006, the
Province stated as follows in the PSSA Echo, a newsletter distributed to PSSA stakeholders:
Your PSSA Pension Plan: A secure, well-funded pension plan The good news for PSSA participants is that, since the Minister of Finance is the 'Plan Governor' and fully assumes the risk for any unfunded liability under the current legislation, plan participants can be confident that the pension promise will be fulfilled. This arrangement differs from a 'jointly governed' pension plan where the element of risk associated with insufficient funds to cover promised benefits, is shared between the Employer and the Plan participants (usually 50/50). This joint responsibility often means, when the Plan is in a deficit position (not fully funded), that Plan participants, along with the Employer, must assume responsibility for a portion of any unfunded liability'. [Emphasis added]
1 PSSA Echo, Vol. 3, 2006, A joint publication from the NB Investment Management Corporation and the Compensation and Employee Benefits Division, Office of Human Resources, p. 2. 9
22. In 2008, the world experienced adverse economic events. In 2009, the Province's
credit rating was downgraded2 and the following year, the Province's finances were put
on negative outlook3.
23. In response to these events, on October 28, 2010, the Province announced it
intended to appoint a task force panel to examine the state of private pension plans in
New Brunswick, and "will undertake a separate full review of pension plans affecting
provincial public employees and retirees" 4. Premier Alward stated that "Employees in the
private and public sector deserve the peace of mind that comes with knowing that the
pensions to which they have contributed all their working lives will be there when they
retire" 5.
24. On December 7, 2010, the Province appointed a three-member "Task Force on
Protecting Pensions" 6. Justice and Consumer Affairs Minister Marie-Claude Blais stated that
Employees deserve to know that the pensions they have contributed to all their working lives will be there when they retire. Retirees need to know the pension they count on will continue to support them throughout retirement. Our goal at the end of the review is to ensure New Brunswick has the rules and regulations in place that are needed to offer our residents the best protection possible for their hard-earned pension savings. 7
2 Rebuilding New Brunswick: The Case for Pension Reform, A Government of New Brunswick Report, February 2013 ("Task Force"), p.7. 3 Task Force, p.7. 4 "Justice and consumer affairs minister to establish pension task force", News Release, Office of the Premier, October 28, 2010. 5 News Release, October 28, 2010, supra. 6 "Pension task force members named", News Release, Justice and Consumer Affairs, December 7, 2010. The three members of the Task Force on Protecting Pensions were named by Justice and Consumer Affairs Minister Marie-Claude Blais. See also, Task Force, p.4. The Members appointed were: Paul McCrossan, Susan Rowland, and Pierre-Marcel Desjardins. 7 "Pension task force members named", News Release, supra. -10-
25. At an initial meeting of the Task Force, Premier Alward was asked "if he was looking for a report, or would he want a 'hands-on Task Force' implementing solutions.
The Premier (and all others in attendance) agreed that they wanted New Brunswick's pension problems lixed'."8
26. Among the issues the Task Force was asked to examine: • rules protecting employees and pensioners; • ensuring that the long-term sustainability of pension promises made to workers is honoured and protected; and • reviewing the structure meant to protect pension plans to insure they are as effective as possible.
27. In September, 2011, the Task Force's mandate was extended to include public sector pension plans 1°.
28. The Task Force described its mandate as:
• To design pension plans that will offer affordable and sustainable pension promises to the people of New Brunswick in both the public and private sectors. • To provide the template and enabling legislation that will provide sufficient financial stability so as to encourage the continuation and expansion of pension plan coverage in the province. • To provide a transition to a new pension regime that minimally disrupts the financial retirement arrangements of pension plan members."
'1 Task Force, p.8. 9 "Pension task force members named", News Release, supra. I° Task Force, p.8. 11 Task Force, pp. 8-9. 3) An Act to Amend the Pension Benefits Act
29. On May 31, 2012, the Province announced "a new pension model" developed by
the Task Force that "would be adopted in three pension plans in the Province 12. Premier
Alward stated, "As premier, I will be advocating this model for our own pensions. I
would encourage all New Brunswick employees and companies to examine this model
and see the advantages it offers over their existing system". The province indicated that
"amendments will be made to the Pensions Benefit Act in the near future to allow both
private and public sector pension plans the option to adopt this model if they so
choose"13.
30. The same day, the Minister of Justice and Consumer Affairs introduced in the
Legislature Bill 63, An Act to Amend the Pension Benefits Act, On June 13, 2012, the
Legislature passed and proclaimed into force Bill 63, An Act to Amend the Pension
Benefits Act 14
r
31. Bill 63 adds a new Part 2 to the Pension Benefits Act, concerning the registration
of "Shared Risk Pension Plans". Part 2 is applicable "if a pension plan is converted to a
shared risk plan" 15, on or after July 1, 2012. Part 2 "binds the Crown if the Crown is the
employer under a shared risk plan that is registered under this Part". 16
12 ,G New pension model introduced", May 31, 2012, News Release, Office of the Premier. The pensions plans adopting the new pension model were the CUPE Hospital Plan; the Pension Plan for Certain Bargaining Employees (CBE) of New Brunswick Hospitals and the New Brunswick Pipe Trades Pension Plan. 13 "New pension model introduced", May 31, 2012, News Release, Office of the Premier. 14 SNB 2012, c.38. Assented to June 13, 2012. 15 PBA, s. 100.6(2). 16 PBA, s. 100.31. nfl
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32. On December 20, 2012, the Legislature passed further amendments to the Pension
Benefits Act, inter alia, to provide that the conversion of alension plan to a shared risk
plan that affects vested pension benefits may proceed, "despite section 12 [of the PBA]
... and any contract or trust" 17, and to provide immunity from liability to government
actors, pension administrators, employers and unions in relation to "a breach of any
contract or trust [or] breach of legal duty or obligation" in relation to a plan conversion' s.
4) An Act Respecting Public Service Pensions
33. In February, 2013 the Task Force published its report, Rebuilding New
Brunswick: The Case for Pension Reforrn 19. In it, the Task Force "recommended that
each public sector pension plan be converted into Shared Risk Pensions." 20
J 34. In the spring of 2013, the Province held information meetings with PSSA stakeholders 21 . The Province made various informational resources available 22, on a
17 S.N.B. 2012, c.57, s. 2. PBA, s. 12 states that a pension plan amendment is void if the amendment purports to reduce a vested pension benefit. 18 S.N.B. 2012, c.57, s. 4. 19 A Government of New Brunswick Report, February 2013 29 Task Force, p.11 21 0n April 17, 2013 Minister Higgs held an information session at the Convention Centre in Fredericton and in Saint John; On April 18, Minister Higgs held an information session in Moncton and Miramichi City; On April 19, Government pension information session continued in to Bathurst and Campbellton; On April 20, Government pension information session continued in Edmundston. 22"setting the Record Straight: The Truth about Pension Reform"; Frequently Asked Questions; Presentation to Retirees of the PSSA; Frequently asked questions for retirees of the PSSA (updated November 21, 2013). - 13 -
government corporate promo website 23 . In October, 2013 Minister Higgs published a
letter to Pensioners explaining why the Province was making the pension conversion 24.
35. Between June 21, 2013 and November 20, 2013, the Province and the Minister
entered into a Memorandum of Understanding with certain unions representing some
employees participating in the PSSA 25. The MOU states that the parties are implementing
a "proposed a redesigned pension plan", "in consultation with the Parties", which has
been "recommended by the Task Force". The signatories to the MOU agreed to "convert
the PSSA to a shared risk plan", and "the Province will repeal the PSSA and introduce
the new Public Service Shared Risk Plan", The MOU sets out the expectation of the
parties in connection with the new Plan.
36. The parties to the MOU agreed that the new Plan "will cover former employees
currently covered under the PSSA" 26. No Pensioner signed or was asked to participate in
the MOU.
37. On November 19, 2013, the Minister of Finance introduced Bill 11, An Act
Respecting Public Service Pensions, in the Legislature. On November 29, 2013, Bill 11 passed second reading. On December 4, Bill 11 was amended and passed third reading.
On December 13, 2013, Bill 11 was passed and given royal assent.
23 http://www2.gnb.ca/content/gnbien/colporate/promo/pension.html 24 Letter October 2013, Blaine Higgs, Minister of Finance. 25 Memorandum of Understanding Regarding the Public Service Superannuation Pension Plan ("MOU") dated November 20, 2013. The MOTJ was executed and adopted by various unions on June 21 and 27, August 29, and November 12 and 13 (Appendix "B" - "Adoption of the Terms of Memorandum of Understanding"). 26 MOU, pp. 1-2. -14-
38. Bill 11 repeals 27 the Public Service Superannuation Act, effective January 1,
2014, and states that "the pension plan under the Public Service Superannuation Act shall
be converted to a shared risk plan in accordance with Part 2 of the Pension Benefits Act,
and that Part applies to the converted plan5128 .
5) Conversion of COLA
a. Bill 11 revokes vested COLA benefits
39. Bill 11 revokes the automatic COLA increases provided to Pensioners under the
PSSA. Bill 11 states that a person currently receiving a pension under the PSSA is
"entitled to a base benefit under the converted plan that is no less than the benefit he or
she was receiving under the Public Service Superannuation Act, exclusive of any
escalated adjustments not granted before the commencement of this section". 29
40. Bill 11 secures a Pensioner's "base benefit" from the Consolidated Fund,
exclusive of COLA. If the converted plan requires a base benefit to be reduced, the
amount of the reduction (exclusive of COLA) "shall be paid from the Consolidated
Fund" 30 . In this respect, the Consolidated Fund no longer secures COLA earned by
Pensioners under the PSSA that are payable in the future. This is a change to what was protected by Section 27(8) of the PSSA, which secured all benefits from the Consolidated
Fund, including vested COLA payable in the future.
27 Section 2. Bill 11 also repeals the PSSA regulations: Section 3. 28 Section 6(1), (3). 29 Bill 11, s. 7(3). 3° Bill 11, s. 7(7). -15-
41. Bill 11 also consolidates the Plan's supplemental benefits being paid to
Pensioners from the Consolidated Fund, 31 and preserves these benefits outside the r -1 converted plan 32 , "exclusive of any escalated adjustments not granted before the
commencement of this section." 33 The Board of Management has been given the
authority to "revoke, suspend, increase or reduce" any COLA "earned, accrued or
vested"34 on supplemental benefits, "in a manner and by an amount that is consistent with
[how] the administrator of the converted plan" exercises such authority 35.
42. Bill 11 also abolishes36 the Pension Board appointed under the PSSA that assisted
in the administration of the Plan and revokes 37 the appointment of its members.
43. Bill 11 states that "no cause of action, claim or demand arises and no action for
damages ... shall be instituted against the Crown ... in relation to the enactment of ...
this Act or the repeal of the [PSSA] or ... a breach of any contract or trust [or] pension
plan [or] a breach of any legal duty or obligation" in relation to the conversion of the
pian38.
31 Bill 11, ss. 8(1) and (2). 32 Bill 11, s. 8(3). 33 Bill 11, ss. 8(6), (7). 34 Bill 11, ss. 8(4), (5). 35 Bill 11, s. 8(5.1). 36 Bill 11, s. 10(2). 37 Bill 11, s. 10(3). In addition, s. 10(5) eliminates allowances and expenses paid to Pension Board members and s. 10(6) provides that "No cause of action, claim or demand arises and no action for damages or other proceeding shall be instituted against the Minister of Finance or the Crown in right of the Province as a result of the abolition of the Pension Board or the revocation of the appointments of its members." 38 Bill 11, s. 9(2). - 16 -
lb. The Pension Benefits Act
44. As stated, Bill 11 states that the PSSA Plan is "converted to a shared risk plan in
accordance with Part 2 of the Pension Benefits Aet" 39
45. In a shared risk plan registered under Part 2 of the PBA, an employer may not be
the administrator of the pension plan. Rather, a shared risk plan is managed by a board of
trustees, the composition of which may include employer and employee representatives 40
46. The primary feature of a shared risk plan is that an employer is relieved from making special solvency funding payments when there is a deficit in the pension fund:
The sole obligation of persons making contributions under a shared risk plan is limited to making or remitting, within the time prescribed by regulation, the contributions required under the plan text and the funding policy. 41
47. This is in contrast to the employer funding rule in Part 1 of the PBA, which requires the employer to make normal cost contributions and deficit funding payments until the pension fund is solvent42.
48. In an employer-run plan, under Part 1, a pension plan amendment is "void" if the amendment purports to "reduce the amount or the commuted value of a pension benefit accrued under the pension plan with respect to employment before the effective date of
39 Section 6(1), (3). 4° PBA, s. 100.5. 41 PBA, s. 100.4(2). PBA, s. 49(1), (2); PBA Reg., s. 35. - 17 - the amendment."43 In a shared risk plan, the board of trustees may reduce vested pension benefits — including to pensions already being paid and received — in the event the assets in the pension fund are insufficient to cover the benefits provided under the plan 44.
49. With respect to COLA benefits, Part 2 to the PBA provides that a shared risk plan may provide "escalated adjustments", which are a form of "ancillary benefits" 45 .
"Escalated adjustments may only be granted in respect of past periods and if the funding policy so permits."46 Moreover, "a conversion of a pension plan to a shared risk plan is not void if the vested right to escalated adjustments is changed to a form of contingent indexing as of the conversion date"47.
c. The new Plan makes COLA "conditional"
50. The Plan documents filed with the Superintendent on December 31, 2013 provide that effective January 1, 2014, "the Public Service Shared Risk Plan converts and replaces the pension plan under the PSSA" 48. "Benefits accrued under the PSSA Plan shall be converted as of the Effective Date in accordance with the provisions hereof and the Pension Benefits Act" 49, and "no person who has any entitlement under the terms of the Public Service Shared Risk Plan shall have any entitlement or claim under or with
43 PBA, s. 12(1)(a). See also, subsection (b) and (c). 44 PBA, s. 100.53. 45 PBA, s. 100.51. 46 PBA, s. 100.4(1)(e). 47 PBA, s. 100.52(3). 48 Plan text, s. 1.3. ° Plan text, s. 22.2. The "PSSA Plan" is defined in s. 2.47 as "the pension plan under the PSSA, as it was immediately prior to the Effective Date". - 18 -
respect to the PSSA Plan". 5° The Plan "shall be a shared risk plan and shall comply with
and be subject to the Pension Benefits Act" 51 and the Income Tax Act (Canada) 52.
51. The Plan text states that "If any provision of [the Plan] is held to be invalid or
unenforceable by a court of competent jurisdiction, its invalidity or unenforceability shall
not affect any other provision of the [Plan] and the [Plan] shall be construed and enforced
as if such provision had not been included therein" 53.
52. The Plan text provides that COLA benefits will be provided only to the extent that
funds are available for such benefits:
As a shared risk plan, all future cost of living adjustments for current and future retirees and other Ancillary Benefits under the Public Service Shared Risk Plan shall be provided only to the extent that funds are available for such benefits, as determined by the Board of Trustees in accordance with applicable laws and the Funding Policy.54
53. The text introduces the term "Pre -Conversion Retiree", defined as:
a person who had been employed by the Employer and retired under the terms of the PSSA Plan prior to the Effective Date and was receiving a pension payable from the PSSA Plan immediately prior to the Effective Date'
5° Plan text, s. 22.3. 51 Plan text, s. 1.4. 52 Plan text, s. 22.4. 53 Plan text, S. 24.2. 54 Plan text, s. 1.5. 55 Plan text, s. 2.44. See also, s. 2.34: "Other Pre-Conversion PSSA Plan Claimant" means "an eligible Claimant in receipt of pension payments under the PSSA Plan immediately prior to the Effective Date or a Pre-Conversion Deferred Vested Member immediately prior to the Effective Date, but excludes a Pre- Conversion Retiree".
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54. Each person who is a "Pre-Conversion Retiree" is "entitled to benefits under the
Public Service Shared Risk Plan in accordance with Section 5.2. 56 Section 5.2 states that
a Pre-Conversion Retiree is entitled to COLA granted before the conversion date, and
will be granted a COLA increase of 0.96% for the year 2014. However, "future COLA"
is provided as may be granted by the Trustees:
Subject to Article XX, for each Pre-Conversion Retiree and Other Pre-Conversion PSSA Plan Claimant, the Base Benefits shall be the sum of (i), (ii) and (iii), adjusted where required according to Appendix C: (i) the amount of pension, including any COLA granted prior to the Effective Date, paid or payable as at the Effective Date, as determined under the PSSA Plan but shall not include future COLA; plus (ii) COLA of ninety-six one hundredths percent (0.96%) granted on January 1, 2014 (pro-rated for the time since termination of employment for those who terminated employment in 2013); plus (iii) COLA as may be granted by the Board of Trustees from time to time in accordance with Article VI and the Funding Policy, as documented in Appendix A. 57
55. Moreover,
For greater certainty, any automatic increases in accrued pensions... under the PSSA Plan no longer apply under the Public Service Shared Risk Plan as of the Effective Date, as permitted under Section 100.52 of the Pension Benefits Act. Instead, future COLA adjustments may be granted by the Board of Trustees from time to time in accordance withArticle VI 58.
56. Article VI provides that COLA is a conditional "Ancillary Benefit":
COLA is an Ancillary Benefit and shall be granted annually on January 1 on a conditional basis in respect of all Base Benefits in payment on or accrued up to December 31 of the previous year.
56 Plan text, s. 3.2. A Pre-Conversion Retiree "who is an Employee as of the Effective Date shall not be required to join the Public Service Shared Risk Plan", 57 Plan text, s. 5.2. Section 5.1 provides that Base Benefits are "intended' and may be "adjusted" and this "may affect all classes of Members, Pre-Conversion Retirees and Claimants", 58 Plan text, s. 5.6. -20-
For greater certainty, COLA may be nil in a given year or years, as determined by the Board of Trustees in accordance with the r 1 Funding Policy.59
The Ancillary Benefits described in this Article VI are the intended Ancillary Benefits. Notwithstanding any other provision of this Public Service Shared Risk Plan, the Funding Policy allows or requires the Board of Trustees to make changes to the Ancillary Benefits. Such changes may be positive or negative and may affect all classes of Members, Pre-Conversion Retirees and Claimants. Any changes to Ancillary Benefits made pursuant to the Funding Policy shall be paramount for the time period required under the Funding Policy and shall affect the Ancillary Benefits specified in this Public Service Shared Risk Plan. Any such changes shall be documented in Appendix C.
57. The Plan text requires the adoption of a "Funding Policy", which must be
reviewed annually°. The Funding Policy filed with Superintendent was approved by the
Minister of Finance on December 30, 2013 on his own behalf and on behalf of the
Province61 .
58. The Funding Policy prescribes "risk management goals" for the Plan. The
"primary risk management goal is to achieve at least a 97.5% probability that the past
base benefits at the end of each year will not be reduced over a 20-year period". In
addition,
There are two secondary risk management goals. These are:
• on average provide contingent indexing on base benefits for service rendered on or before the conversion date that is in excess of 75% of the indexation provided under the pre- conversion plan over a 20-year period;
59 Plan text, s. 6.1. In addition, s. 6.3 provides that "Once COLA is granted for a given year to a Member, Pre-Conversion Retiree, or Claimant in accordance with this Article VI and the Funding Policy, it becomes part of the Base Benefits for such Member, Pre-Conversion Retiree, or Claimant, as the case may be." 6o Plan text, ss. 18.1-18.4. 61 Funding Policy, p. 16. The Policy was also executed and adopted by the three union parties: pp. 17-19. - 21 -
• on average over a 20-year period, provide other ancillary benefits that exceed 75% of the value of the ancillary benefits described in the Plan text at conversion.
For the purposes of meeting these goals, base benefits include the accrual of service of members over the projection period and any contingent indexing provided based on the financial performance represented by each scenario tested.
If, through the testing process, a scenario allows for indexing in a given future year, this contingent indexing amount becomes part of the base benefits at the time it is granted.
59. In other words, the Funding Policy has a "goal" that over the next twenty years, there is a 97.5% probability that a Pensioner will receive at least 75% of the COLA benefits accrued under the pre-conversion PS SA Plan.
60. With respect to administration, the parties to the MOU agreed that the Plan will be governed by a Board of Trustees 62. The Plan text identifies the Trustees as the administrator63 of the Plan and the pension fund, and the powers of the Trustees are as set out in the Plan text and in the Trust Agreement.
61. Amendments to the Plan" or Trust Agreement 65 may be made by the Trustees, except that amendments to the composition of the Board of Trustees or certain parameters in the Funding Policy may only be made by the Province and the unions 66.
62 MOU, Art. 3.1(w), p. 11. 63 Plan text, s. 2.4. 64 Plan text, s. 21.1. 65 Trust Agreement, s. 5.1. 66 Plan text, s. 21.2. In addition, no amendment may be made to the Trust Agreement which would divert the Fund to a purpose other than as set out in the Agreement or be inconsistent with the PBA, ITA, Plan text or Funding Policy: Trust Agreement, s. 5.4. -22-
62, The composition of the Board of Trustees includes a "Pre-Conversion Retiree",
appointed by the secretary of the Board of Management °.
6) Superintendent of Pension
63. On December 18, 2013, the Coalition's counsel wrote to the Superintendent of
Pensions and made submissions concerning the constitutionality of Bill 11. Counsel
asked the Superintendent to defer registration of the shared risk plan document 68.
64. On December 20, 2013, the Superintendent acknowledged receipt of counsel's
letter and stated that she had not yet received an application to register the new Plan.
"Once an application is received, it will be reviewed with your submissions" 69.
J 65. On December 31, 2013, the Superintendent received an application from the
Trustees to register a number of Plan documents, effective January 1, 2014, including the
M0U70, the Trust Agreement71, the Plan textn, the Funding Policy73 and a Statement of
Investment Policies74.
66. On March 11, 2014 the Applicant's counsel replied to the Superintendent making
additional submissions, and continued to ask "that you please defer registration of the
Plan documentation"75.
67 Trust Agreement, s. 2.1. Plan text, s. 15.3. 6B December 18, 2013, letter from Coalition counsel. 69 December 20, 2013, letter from Superintendent. 70 This is required by PBA, ss. 10(2)(b) and (c). 71 This is required by PBA, ss. 10(2)(b) and (c), and 100.5(1) 72 This is required by PBA, ss. 10(2)(b), and 100.6(2)(a)(i). 73 This is required by PBA, S. 100.6(2)(d). 74 This is required by PBA, S. 100.6(2)(e). 75 March 11, 2014, letter from Coalition counsel. - 23 -
67. On March 12, 2014, the Superintendent received the "Conversion Plan and Initial
Actuarial Valuation Report" 76 in respect of the converted Plan. The Actuarial Report
notes that the Plan is "subject to approval by the New Brunswick Office of the
Superintendent of Pensions" 77 and that the registration number from the Superintendent
of Pensions is "pending" 78.
68. The Superintendent of Pensions has jurisdiction under the PBA over the
registration of pension plans in New Brunswick. The PBA states: "The administrator of a
pension plan shall, ... within sixty days after the establishment of the plan..., apply to the
Superintendent for registration of the pension plan" 79 . Bill 11 provides that "the
converted plan shall be deemed to have been established on the date of the coming into
force of this section." 80
69. The PBA also states that "No person shall administer a pension plan unless an
acknowledgment of registration of the pension plan has been issued by the
Superintendent". 81 An exception exists permitting a pension plan to be administered
within the first ninety days after the establishment of the pension plan82.
76 This is required by PBA, s. 100.6(2)(a)(ii). 77 Actuarial Conversion Report, at p. 3. 78 Actuarial Conversion Report, at p. 2. 79 PBA, s. 10(1). This rule applies to the registration of a shared risk plan under Part 2: PBA, s. 100.6(1). 8° Bill 11, s. 6(3). 81 PBA, s. 7(1). 82 PBA, s. 7(2). -24-
70. Despite that more than 90 days has passed since the converted Plan was
"established", neither the Coalition nor our counsel have heard further from the
Superintendent with respect to the registration of the Plan. I am not aware if the Plan is registered, or not, or if the Superintendent has any view regarding the registration of the
Plan or the constitutionality of Bill 11.
C. Pension Coalition NB
1) Background
71. On May 29, 2012, the Board of Management sent a letter 83 to PSSA Pensioners, describing the work of the Task Force. The letter states as follows:
Over the next two weeks there will be detailed announcements about the specific changes that will be made to those pension plans which have been engaged in the extensive collaborative process. The pension plans are not identical, but all have made improvements to their security, sustainability, and affordability by moving to a new pension model.
In cases where pension funds are underfunded, this will require modest increases in contributions from current employees. However, our commitment to you, as a pension recipient, is that your pension cheque will not decrease as a result of the change to the new model. In fact, under the new model your pension will be more secure than ever before. The new model is designed to provide very strong protection for the base and also to make future increases highly likely. [Emphasis added]
72. On May 31, 2012, as stated, the Province introduced Bill 63, An Act to Amend the
Pension Benefits Act. At the press conference announcing the new pension model,
Premier Alward stated that the new model "provides peace of mind to New Bnmswickers receiving pensions - under this plan, their cheques will not diminish". Moreover, "the
83 May 29, 2012 letter from Board of Management to PSSA Pensioners. - 25 -
new model is not a 'one size tits all' model", and "each pension plan must be carefully
examined and evaluated on its own terms" 84.
73. On October 15, 2012, I attended a "pension discussion group" of affected persons
who met at a Pensioner's house, to discuss our concerns over pending public sector
pension reforms. Those in attendance included myself, and Pensioners Bill Leonard and
Brian Steeves. On October 23, 2012, I attended a second pension discussion group meeting among Pensioners at the same retiree's house.
74. On October 31, 2012, I met with Minister of Human Resources, Troy Lifford,
Deputy Minister Jane Garbutt, Assistant Deputy Minister Brian Durelle and the
Minister's Executive Assistant, Louise Jackson, to make them aware of the lack of communication and consultation with Pensioners concerning the Province's statements about the shared risk plan model in the public sector. The Minister acknowledged at that meeting that communications with Pensioners had been minimal and should be corrected.
75. Between November 7, 2012 and January 24, 2013, I met at least seven more times85 with our pension discussion group.
76. On January 25, 2013, the Province announced, in a second letter to PSSA
Pensioners, that the Province "would be pursuing the shared risk pension model for all provincially sponsored pension plans, including the Public Service Superannuation Act
84 News Conference Speech, "New pension model introduced", 31 May 2012. 85 The meetings took place on November 7 and 27, December 10, 2012; January 2, 10, 16 and 24, 2013. --1 - 26 -
pension plan"86. The lefter invited Pensioners to a "Town Hall" information session with
the Task Force, by teleconference, scheduled for February 11. This letter attaches a
"Q&A", which includes statements, for the first time, indicating that Pensioners will not
receive the automatic COLA increases that they had earned and were vested under the
PSSA. The Q&A includes the following statements:
Why is the government considering changes to pension plans including the PSSA?
• The challenges of private and public pension plans in recent years have been well documented. The PSSA was designed at a time when employees worked longer and lived for shorter periods after retirement. Combined with volatile investment returns, this has resulted in a plan where changes are required to ensure sustainability in the long term. At the most recent plan valuation, the benefits were funded at 83.6%.
What are the main features of the new pension model that J are important for me? • Your current pension benefit is not being reduced as a result of the PSSA converting to the shared risk pension model. • For retirees, under the new model, the monthly pension payment you currently receive does not decrease and the cost of living increases (indexing) will continue to be provided when the plan can afford it. The new model is designed to make annual cost of living increases highly probable. • One of the benefits for retirees of this new model is that annual increases will no longer be capped at the previous maximum of 5% (or 6% if retired before May 1995). Cost of living increases to the full extent of inflation can be provided if the plan funding levels allow. • The new model is designed to ensure your pension will be more secure than ever before, including very strong protection for the benefits you are currently receiving.
Is indexing being eliminated from my Pension? What happens if the full cost of living increase is not provided? • Indexing is not being eliminated from your pension. You will continue to receive cost of living increases. • If the full cost of livin increase is not aid in a iiven ear the difference is carried forward and can be paid in a subsequent year if the PSSA pension plan funding level allows for it.
86 January 25, 2013 letter re "PSSA Retiree Town Hall Invite", Pensions and Employee Benefits Division, Department of Human Resources. r
-27-
• The shared risk pension model is designed to provide cost of living increases of greater than 75% of Consumer Price Index (CPI) over the long term.
Can my pension ever be reduced? • Again, your pension is not being reduced as the result of the conversion to the new model, however, there is no pension model, no matter how well designed, which can entirely eliminate any chance that benefits may be reduced.
Isn't my pension currently guaranteed? • As mentioned, there is no pension model, no matter how well 1 I designed, that can entirely eliminate the risk of possible benefit reductions. • In situations, such as a severe economic depression, where government does not have the ability to sustain pension payments, it is unlikely that taxpayers will support the current level of benefits under the current PSSA. • Again, the shared risk pension model is designed to ensure your • pension will be more secure than ever before. The new model is designed to provide a very strong protection for benefits you are currently receiving and also to make future increases highly probable.
Why are retirees being impacted? Couldn't the problem have been solved by simply increasing contributions for active members and government? • The financial position of the PSSA is such that requiring all the work to be done on the contributions side would require a very large increase in contributions — more than is realistic to expect employees or taxpayers to fund. • In addition, there is an issue of fairness between generations of workers. Trying to resolve the issue solely with contributions would amount to requiring present workers to make large contributions more to sustain the benefits of present pension recipients than to build their own pension fund for when they retire. 87 [Emphasis added]
2) Formation
77. On January 31, 2013 the Pension Coalition NB (the "Coalition", or "PCNB") was
formally established, as a voluntary association of individual Pensioners, at an
organizational meeting called by Pensioner Bill Ayer, at the Anglican Church on Main
r January 25, 2013 "Q&A". - 28 -
Street in Fredericton NB. I was one of the original participants in the discussion that r started the Pension Coalition NB. I and approximately 60 Pensioners were in attendance.
78. On February 4, 2013, I attended the first Steering Committee Meeting of the
PCNB held at Ducks Unlimited, Union Street in Fredericton NB.
79. Over the coming months, I attended at approximately 98% of all the Steering
Committee meetings which were held on a weekly basis since February 4, 2013. In
addition, I have attended all of the six Operational Committee meetings and
Communications Committee meetings, and two of the various Fundraising Committee
meetings.
, 80. On February 7, 2013, I along with Pensioners Bill Leonard and Cyril Theriault attended a University of New Brunswick Pension Group meeting at the Wu Centre, UNB
Campus, to hear PSSA Plan actuary Conrad Ferguson discuss his concerns regarding the
solvency of the PSSA.
81. On February 11, 2013, the Task Force "Town Hall" teleconference took place. Approximately 500 Pensioners and PCNB representatives participated in the
teleconference and a similar teleconference was held in French.
82. On February 18, 2013, myself and Pensioners Brian Steeves and Mike Wong met with the Task Force and other government officials. In response to various questions, the - 29 -
Task Force indicated that no legal opinion concerning the rights of Pensioners had been
sought, and this was immaterial, "as the Government will be going ahead anyway". The
Task Force advised that there will be no costings conducted of grandfathering COLA benefits.
83. On February 19 and 20, 2013, Pensioner Cyril Theriault attended a "National
Summit on Pension Reform" in Fredericton, which was partnered by the Province. Mr.
Theriault reported to me and to others on the Steering Committee that a number of presentations and speeches were given by industry professionals and government representatives. A report on the "Summit" meeting was published in August 2013 and various presentations and event documents have been published 88.
84. On February 27, 2013 the PCNB issued its first press release, stating as follows:
Pension Coalition NB plans Town Hall
Pension Coalition NB represents a large number of retirees from the NB public service and universities. The Coalition is very concerned over the Province's stated intention to unilaterally alter the pensions of those currently retired. Coalition volunteers have been working hard to try to learn about the proposed changes and to inform all public sector retirees on how they might be affected. In addition to the web site (vvww.pensioncoalitionnb.ca ), a second town hall meeting will be held in Fredericton, at Saint John's Anglican Church Hall, Main Street, at 1:30 pm on Thursday February 28.
The Coalition wants the Government to honour their employment commitments with those who retired in good faith, believing that the Government would stand by its commitment to them. Throughout our working lives, we felt that the government of NB was solidly behind us and would, at 'the end of our careers, provide the promised retirement income for us and our
88 http://ppforumma/pension reform — Agenda, Pension Issues Brief, News Release, Gerald McCaughey Speech, Jim Leech Speech, Bill Morneau Speech, and Final Report. - 30 -
survivors for the remaining years of our lives. We believe that we have served the people of New Brunswick well and that we have done our share in providing Provincial citizens with the public services necessary to create a Province in which we all are proud to live and raise our families. Now, for the first time, the Alward government has announced that it is willing to break its agreements with its retirees in key areas. Worse, the government has not provided its retirees with any voice into its decision to change the commitments made by previous New Brunswick governments.
The average retiree, under the Province's largest pension plan (PSSA), receives approximately $21,000 per year. The survivor of that retiree will receive $10,500 per year. The poverty line in NB for a single employable person is $16,167 (Canadian Council of Social Development). We are hurt by the charge that our pensions are "gold plated" and in light of the above see the taunt as very unfair. The proposed changes are obviously of great concern to us. ...
This is a major change in that it means that the Province will no longer be guaranteeing its retiree's pensions., In addition to ceasing to guarantee pensions there will not be guaranteed indexing linked to the Consumer Price Index. Instead, indexing will be based upon performance of the pension funds and their investments. The official version is that indexation should reach 75% of CPI but that depends on significant funding growth. The Premier has also said that "base benefits" will not be reduced for retirees but communications from the Pension Branch and Task Force members suggest that in a serious economic situation they could indeed be reduced. Task Force members counter by downplaying the likelihood of that occurring but it is indeed possible now that pensions will no longer be guaranteed. ... So far, Shared Risk and its impact on current retirees have been presented as a done deal. Our group fears that the Government has deserted us. We cannot undo our retirement. We cannot undo our career choices. ...
3) Activities
85. Over the following 15 months, the PCNB has engaged in extensive activities to protect Pensioners' benefits. In addition to internal meetings and organizational activities, the PCNB's activities include: - 31 -
(a) Communications with Pensioners, including regular mailings, email and
website updates, and three separate tours across province in which
informational sessions were held for interested persons;
(b) Communications with the general public, including media interviews and
press releases, to inform the New Brunswick public of Pensioners'
concerns and to respond to a public perception concerning public sector
retirees;
(c) Political advocacy, including meetings with government and opposition
officials; and
(d) Legal advocacy, including making freedom of information requests to the
Province and retaining legal counsel to advise the PCNB on Pensioner
rights and to advocate before the Superintendent and the Courts.
86. These activities are described below.
a. Pensioners
87. The PCNB has set up informational and communication resources for
Pensioners, including a "1-800" phone line, Facebook page, and website
(www.pensioncoalitionnb.ca), which are updated regularly with articles and other pension resources. The PCNB has also recorded and produced a number of YouTube videos for public viewing. - 32 -
88. The PCNB has also conducted three province-Wide tours in which it held
information sessions for Pensioners. The PCNB's first Provincial Tour was from
February 28-April 22, 2013, and included stops in Fredericton, Quispamsis, Saint John,
Moncton, Dieppe, St. Stephen, Tracadie, Miramichi, Edmundston, Woodstock,
Campbellton, and Bathurst. Approximately 2,000 Pensioners attended these sessions. A
PowerPoint presentation prepared by the PCNB was delivered at these sessions 89.
89. The PCNB's second Provincial Tour was held between September 17-25, 2013, which had 11 stops, including in Quispamsis, Moncton, Dieppe, Fredericton, St. Stephen,
Edmundston, Woodstock, Miramichi, Tracadie, Campbellton and Bathurst. One purpose of the second Provincial Tour was to secure a mandate from Pensioners to determine the future direction of Coalition, including discussing a solution with the Province, or considering legal action if discussions fail. A total of 2,150 Pensioners voted on this initiative, with over 96% of people voting supporting legal action against the Province should discussions fail.
90. Mr. Robert Blais, an actuary whose services were provided to the PCNB by the
Province, attended a number of these sessions and a video recording of his comments were made available at subsequent stops. Mr. Blais commented that the Province could have implemented any number of options concerning the shared risk plan, including grandfathering current Pensioners.
89 Power Point presentation, First Provincial Tour. - 33 -
91. The September 25 information session in Fredericton was also attended by Mr.
Bernard Dussault, a former Chief Actuary of Canada who attended in his capacity as
Pension and Benefits Officer of the PIPSC union. Mr. Dussault has expended considerable time and effort in assisting the PCNB in its efforts to protect Pensioners' vested COLA benefits.
92. Also in attendance at the September 25 session was Mr. Gary Corbett, president of the PIPSC union. PIPSC represents a number of public service employees affected by
Bill 11, and did not sign the Memorandum of Understanding that preceded the Plan's conversion to a shared risk plan.
93. The PCNB's third Provincial Tour was held between May 5-15, 2014, which had
11 stops, including in Fredericton, Saint John, Moncton, Dieppe, St. Stephen, Tracadie,
Miramichi, Edrnundston, Woodstock, Campbellton and Bathurst. A Power Point presentation and video presentation was delivered to Pensioners.
94. Regarding the Provincial Information Tours, I have prepared, with the assistance of the members of the Steering Committee, all three PowerPoint presentations and I have also made 31 out of 33 presentations to Pensioners in the 11 selected communities, as identified in the PCNB's Chronology of Activities 90 .
b. Political
9° Chronology of PCNB Activities. -34-
95. The PCNB has been engaged in extensive political efforts to express Pensioners'
concerns, including meetings between PCNB representatives and government and
opposition officials. Meetings were held in 2013 on February 26 91, March 1992, 2e and
21 94, April 495, 896 and 29 may 798, 159' and 21 100, June 4 101 , 10 102 and 1 -103/ August ,
9104 and 28 105, September 10 106, and October 1107 and 9 108.
96. In addition to meetings with officials, PCNB representatives engaged in a letter-
writing campaign with the Province, including letters and emails to various persons in
91 February 26 Meeting with Deputy Ministers Byron James and Jane Garbutt, and Judith Keating. PCNB 1 attendees: Brian Durelle, Cyril Theriault, and Clyde Spinney. 92 March 19 Meeting with Greater Fredericton PC Caucus. PCNB attendees: Bonny Hoyt-Hallett, David Wiezel, Clyde Spinney, Glen Wilson, and Cyril Theriault. " March 20 Meeting with Provincial Liberal Caucus. PCNB attendees: Bonny Hoyt-Hallett, David Wiezel, Clyde Spinney, Glen Wilson, and Cyril Theriault. " March 21 Meeting with PC MLA Ross Wetmore. PCNB attendee: Elizabeth Abraham. 95 April 4 Meeting with Premier Alward, Minister Blais, Minister Jody Carr, Minister Troy Lifford, Deputy Minister Byron James, Nancy McKay, Premier's Office, Darrell Fowley. PCNB attendees: Bonny Hoyt- Hallett, David Wiezel, Clyde Spinney, Cyril Theriault and Bill Ayer. 96 April 8 Meeting with Minister Jody Can and MLA Ross Wetmore. PCNB attendee: Cyril Theriault 97 April 29 Meeting #1 with Greater Moncton PC Caucus. PCNB attendees: Clyde Spinney, David Wiezel, Don Madore and Jean Luc Belanger (NB Seniors Federation). Meeting #2 with Greater Saint John Area PC Caucus. PCNB attendees: Liz, Cyril, Debbie McCormack, Barry Harbinson (NB Society of Retired Teachers). 98 May 7 Meeting with Liberal MLAs Roger Melanson, Greg Byrne, Victor Boudreau, Bill Fraser, Roland Hachey, and Bernard LeBlanc. PCNB attendees: Clyde Spinney, Bonny Hoyt-Hallett, Clifford Kennedy, Cyril Theriault, Claire LePage and Brian Durelle. 99 May 15 Meeting with Minister Higgs. PCNB attendees: Group of Four 1°° May 21 Meeting with Auditor General and his Deputy, Janet Leahy. PCNB attendees: Liz Abraham, Bonny Hoyt-Hallett, Cyril Theriault. 1°1 June 4 Meeting with Acting Comptroller, Louise Wilkins, Ken Little and Finance employee, Leonard Lee White. PCNB attendee: Liz Abraham. 102 June 10 Meeting #1 with New Brunswick Investment Management Corporation (NBIMC). Meeting #2 with Jane Garbutt, Deputy Minister of Finance. PCNB attendees: Group of Four. 1" June 17 Teleconference Meeting with Jane Garbutt, Deputy Minister of Finance, and Finance employees Marc Gaudet, David Nolan, Leonard Lee White, with Paul MeCrossan. PCNB attendees: Group of Four. 104 August 9 Telephone Meeting with Minister Higgs. PCNB attendee: Bonny Hoyt-Hallett 105 August 28 Meeting with Minister Higgs, Deputy Minister Jane Garbutt, Nancy McKinnon. PCNB attendees: Group of Four. li)6 September 10 Meeting with Minister Higgs, Deputy Ministers Byron James and Jane Garbutt and Robert Blais, Actuary. PCNB attendees: Group of Four plus Glenn Wilson and Clifford Kennedy. 107 October 1 Meeting with Minister Higgs. PCNB attendees: Bonny Hoyt-Hallett, Cyril Theriault, Brian Durelle and Clyde Spinney. 1" October 9 Meeting with Provincial Liberal Caucus. PCNB attendees: Bonny Hoyt-Hallett and Cyril Theriault. -35-
2013 on March 1 and 7, May 6, 17, 23, and 27, and October 8. Various replies were received, on May 24, 27, and September 13 and December, 2013.
c. Public
97. The PCNB has also directed efforts toward informing the general public about
Pensioner rights and concerns through regular press releases, news commentaries, media interviews and public demonstrations.
98. In the course of these efforts, Pensioners discovered a deep public resentment toward what they perceived to be "overly generous" public sector employment benefits.
The Task Force reported on the public resentment toward public sector retirees in the
Province:
For public sector plans, the reaction to increasing deficits following the 2008/09 recession by the general public was not positive. Many in the public complained openly about the generosity of these schemes and the fact that they have to pay extra taxes to cover pension deficits for benefits that they cannot afford for themselves, and for protections of savings they themselves don't receive in their RRSPs m9.
99. This public perception was also expressed by various government officials, in various media and in editorial commentary in the Province. For example, at the May 31,
2012 press conference announcing the shared risk pension model, Premier Alward stated that "it is not fair or realistic to expect New Brunswick taxpayers to backstop huge swings in pension valuations because of the performance of pension plan investments." 110
109 Task Force, p. 7. 11° http://www2.gob.ca/content/gabien/corporate/promo/pension/speech.html -36-
100. On February 28, 2013, I held the first of several media interviews on behalf of
Pension Coalition NB with Terry Seguin of CBC Information Morning. I expressed the
concern among Pensioners over the potential reduction in their benefits.
101. I have been the official spokesperson for Pension Coalition NB doing most of the
TV, newspaper and radio interviews, of which there have been over 100.
102. On March 15, 2013, PCNB representative Ernie MacKinnon published a
commentary in the Telegraph Journal, in which he made a case against reducing COLA
benefits for Pensioners.
103. On July 31, 2013, I was interviewed by CBC radio regarding the NBPC's legal
efforts.
104. On November 6, 2013, the PCNB organized a public demonstration in front of the
New Brunswick Legislature in which approximately 3,000 Pensioners from across the
Province attended to support the PCNB's efforts. The PCNB was joined by PIPSC union national and local representatives.
105. On November 20, 2013, a joint press conference by the PCNB, PIPSC and the
CUPE union was held at the Delta Hotel in Fredericton, in which the attendees asked the
Province to "hit pause" on Bill 11 and study the issue further. - 37 -
d. Legal
106. The PCNB retained legal counsel in spring, 2013 to advise it on the issues giving
rise to this application. As mentioned, our legal counsel has corresponded with the
Superintendent of Pensions on this topic.
107. In addition, the PCNB has made a number of requests to the Province for
information under the Right to Information and Protection ofPrivacy Act.
f
108. On September 23, 2013, the Commissioner's office under the Right to
Information and Protection of Privacy Act reported that several departments did not
respect the statutory time limits for response. On January 22, 2014 the Commissioner
reported on a list of recommendations that have not yet been completed by several
departments.
4) Fundraising
109, The Pension Coalition NB has engaged in fundraising activities to finance its
activities including the cost of bringing the within application. All committee members
of the PCNB volunteer their time, and having been in attendance at most meetings I can
say that each committee has spent thousands of hours toward the PCNB's efforts.
110. In March, 2013 the PCNB struck a Ways and Means Committee with a mandate
to manage the financial affairs of the Coalition and to develop and implement strategies - 38 -
for raising funds. The primary fundraising activity occurred at each of the three
provincial tours (February 28-April 22, 2013; September 17-25, 2013; and May 5-15,
2014).
ill. During the first two tours, the Coalition made a plea for donations to support the
ongoing operating costs of the organization and this was included the circulation of two
or three plastic buckets around the room. Following the second tour, once a mandate to take legal action was received from members, the steering committee decided that any future donations received would be deposited into a Legal Defense Fund in order to pay legal expenses.
112. During the third provincial tour in May, 2014, the plea for funds accompanied by the circulating of plastic buckets was for both operational and legal funding.
113. In addition, attendees at the third provincial tour were shown a video from our legal counsel which was commissioned by the Coalition, explaining the legal action, and we asked attendees to mail in cheques or visit the Coalition website where they could donate electronically using PayPal.
114. Since May 2014, following the third tour, fundraising initiatives have intensified as we struggle to raise the significant funds required to cover a major court challenge of this nature. Initiatives underway in June 2014 include: - 39 -
(a) emailing weekly messages to members reminding them of the need for
contributions to cover legal expenses and reporting on funds raised;
(b) mailing letters via Canada Post requesting donations for the Legal Defense
Fund to over 300 members who do not have computers;
(c) setting up a network of regional coordinators in 11 regions of the
province. Their task is to build a local network of people who will then
personally contact local retirees and solicit funds. To assist these
coordinators, the Coalition has developed spreadsheets of member contact
information sorted by region as well as lists for each region of who has
already made a contribution to the Legal Defense Fund since its inception
in October 2013, and
(d) posting a fundraising "barometer" on the Coalition website to show how
much has been raised.
115. Between October 2013 and May 30, 2014, the Coalition has raised $111,000 toward its legal defense costs, and has spent approximately $46,000, leaving approximately $65,000 remaining in the Legal Defense Fund. We expect this amount to be largely depleted over the month of June and July, 2014.
116. In addition, as at May 30, 2014 the Coalition has raised approximately $108,000 toward the Coalition's operating expenses, of which it has spent approximately $76,000, which it has used toward meeting room rental costs for the three provincial tours, including audio and video equipment, photocopying, newspaper and radio advertising, -40-
monthly website and telephone charges. We have approximately $32,000 remaining to
cover future operating expenses.
117. If we are not successful in securing additional funding toward these efforts, the
Coalition will not be in a position to continue to pursue this application.
118. I am proud to have served on the various committees of Pension Coalition NB and
to have conducted presentations to Pensioners throughout the Province of New
Brunswick. This is a case for security of the person and discrimination against the most
vulnerable in our society, seniors.
SWORN TO BEFORE ME at the City of Fredericton, in the County of York and Province of New Brunswick, this 30th day of June, 2014.
A Commissioner of Oaths, Being A Solicitor Court File No.:
IN THE COURT OF QUEEN'S BENCH OF NEW BRUNSWICK
TRIAL DIVISION
Exhibit "A" to the Affidavit of Clifford Kennedy Jr. JUDICIAL DISTRICT OF FREDERICTON June 30, 2,014.
IN THE MATTER OF AN ACT RESPECTING Allison Whitehead, Q.C. PUBLIC SERVICE PENSIONS Commissioner of Oaths being a Solicitor for the Province of New Brunswick
BETWEEN:
PENSION COALITION NB, CLIFFORD KENNEDY JR., VIOLA SAVAGE, DEBORAH MCCORMACK, and RITA DUNNETT,
Applicants, - and -
HER MAJESTY THE QUEEN IN RIGHT OF NEW BRUNSWICK as represented by the ATTORNEY GENERAL OF NEW BRUNSWICK and THE MINISTER OF FINANCE and the BOARD OF MANAGEMENT, the SUPERINTENDENT OF PENSIONS, and the TRUSTEES OF THE PUBLIC SERVICE SHARED RISK PLAN,
Respondents.
BOOK OF EXHIBITS BENCH ri; •)1:.11iT , I ET11.51CION Ai.,0 HUED (VA
COUR DU BANC DE LA RENE FREDE-IRCTQN, N43 REQU ET DEPOSE
1 Tab 1: Principal Statutory Documents
A: Canadian Charter of Rights and Freedoms, ss.1,7, 15(1), 24(1), and 52(1), Part 1 of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c.11.
B: An Act Respecting Public Service Pensions (Bill 11)
C: An Act to Amend the Pension Benefits Act, S.N.B. 2012, c.38.
D: An Act to Amend the Pension Benefits Act, S.N.B. 2012, c.57
E: Pension Benefits Act, S.N.B. 1987, c.P - 5.1, as amended
F: Tax Payer Protection Act S.N.B. 2003, c.T - 0.5
G: Sch. C "Public Acts and Parts of Public Acts to be brought into force by Proclamation but for which no Proclamation had been issued up to March 31, 2014".
Plan Documents
Tab 2: Public Service Superannuation Act, S.N.B. 1973, c.P-26, repealed
Tab 3: New Brunswick Public Service Superannuation Act Actuarial Valuation as at April 1, 2012 for Funding Purposes
Tab 4: Memorandum of Understanding Regarding the Public Service Superannuation Pension Plan, November 20, 2013
Tab 5: Public Service Shared Risk Plan text, effective January 1, 2014
Tab 6: Agreement and Declaration of Trust of the Public Service Shared Risk Plan, effective January 1, 2014
Tab 7: Public Service Shared Risk Plan Funding Policy as of January 1, 2014
Tab 8: Statement of Investment Policies of the Public Service Shared Risk Plan January 2014
Tab 9: Conversion Plan and Initial Actuarial Valuation Report as at January 1, 2014
2 Government Documents Tab 10: PSSA Echo, Vol. 3, 2006, A Joint Publication from the New Brunswick Investment Management Corporation and the Compensation and Employee Benefits Division, Office of Human Resources.
Tab 11: "Justice and Consumer Affairs Minister to Establish Pension Task Force", News Release, Office of the Premier, October 28, 2010.
Tab 12: "Pension task force members named", News Release, Justice and Consumer Affairs, December 7, 2010.
Tab 13: Board of Management to PSSA Pensioners, May 29, 2012.
Tab 14: "New Pension Model Introduced", May 31, 2012, News Release, Office of the Premier
Tab 15: "Premier's News Conference Speech", May 31, 2012
Tab 16: Pensions and Employee Benefits Division (Dept. of Human Resources) to PSSA Pensioners plus attached Q&A, January 25, 2013.
Tab 17: Rebuilding New Brunswick: The Case for Pension Reform, A Government of New Brunswick Report, February 2013.
Tab 18: National Summit on Pension Reform, February 19 and 20, 2013, Event documents
Tab 19: Blaine Higgs, Minister of Finance to PSSA retirees, October 2013.
Tab 20: "Setting the Record Straight: The Truth about Pension Reform", Frequently Asked Questions; Presentation to Retirees of the PSSA; Frequently asked questions for retirees of the PSSA (updated November 21, 2013).
Tab 21: Finance Factsheet: Revenue, 2014-2015 Budget
Tab 22: Letter to Retiree regarding conversion to Public Service Shared Risk Plan, December 2013.
Pension Coalition NB Documents
Tab 23: Email correspondence from Glen Wilson to Premier Alward, February 18, 2013,
Tab 24: Bill Ayer to Various Ministries, March 2013.
3 Tab 25: Commentary Published in Daily Gleaner, March 15, 2013, Ernest MacKinnon.
Tab 26: Power Point Presentations from PCNB Provincial Tours
A. Power Point Presentation for First Provincial Tout, February 28-April 22, 2013. B. Power Point Presentation for Second Provincial Tour, September 17-25, 2013. C. Power Point Presentation for Third Provincial Tour, May 5-14, 2014
Tab 27: Pension Coalition New Brunswick Articles
A. PCNB Article "Retirement and the Proposed Changes to the PSSA Plan", February 11, 2013, PCNB. B. PCNB Article "Discussion Process with Minister Higgs", May 17, 2013, PCNB. C. PCNB Article "Your Coalition at Work" October 2, 2013, PCNB, D. PCNB Article "Facts Behind the Pension Debate - An Approach for a More Sustainable Future" November 17, 2013, PCNB. E. PCNB Article "Pension Reform: 'virus' or reality?", November 20, 2013, PCNB.
Tab 28: Pension Coalition New Brunswick Press Releases
A. PCNB Press Release "Pension Coalition NB Plans Townhall", February 27, 2013, PCNB. B. PCNB Joint Press Release "Canadian Pension Expert Says Alward's Shared Risk Plan is Irresponsible", November 20, 2013, PCNB, PIPSC and CUPE.
Tab 29: Pension Coalition New Brunswick Advertisements
PCNB Advertisement "Broken Trust. Betrayed Seniors." November 11, 2013, PCNB.
Tab 30: Chronology of PCNB Activities to present
Tab 31: Sample Retirement Agreement - Viola Savage
32. Pension Coalition Correspondence
A. Correspondence from Bill Ayer (Pensioner) to Premier David Alward re: objection to removal of pension guarantee, March 1, 2013.
B. Correspondence from Jim Carter (previous Assistant Deputy, Office of Government Reform) to Bonny Hoyt-Hallett (PCNB), re: 15 points on pension plans, March 7, 2013.
4 C. Correspondence from Bonny Hoyt-Hallett (PCNB) to Premier David Alward, re: lack of correspondence, May 6, 2013.
D. Correspondence from Bonny Hoyt-Hallett to Minister Higgs re: meeting and request for independent actuary, May 17, 2013.
E. Correspondence from Minister Higgs to Bonny Hoyt-Hallett re: legality of funding for independent actuary, May 24, 2013.
F. Email Correspondence between Minister Higgs and Bonny Hoyt-Hallett re: PCNB active engagement in process, May 27, 2013.
G. Email Correspondence between Minister Higgs and Bonny Hoyt-Hallett re: actuary report and goal of pension reforms, September 13, 2013.
H. Email Correspondence between Bonny Hoyt-Hallett and Minister Higgs re: corrections to statements made by Minister Higgs, September 16, 2013.
I. September 23, 2013: Right to Information and Protection of Privacy Act Commissioner's findings to Pension Coalition New Brunswick
J. Correspondence from Bonny Hoyt-Hallett to Minister Higgs re: options to preserve contracts of former employees of the Province, October 8, 2013.
K. Correspondence from Bonny Hoyt-Hallet to Minister Higgs re: questions regarding pension changes, November 15, 2013.
L. December 18, 2013: An Kaplan to Superintendent of Pensions
M. December 20, 2013: Superintendent of Pensions to An Kaplan
N. January 22, 2014: Right to Information and Protection of Privacy Act Commissioner's findings of recommendations not completed
0. March 11, 2014: An Kaplan to Superintendent of Pensions
Bernard Dussault
Tab 33: March 2010, "Global Solution to the Canadian Pension Crisis: A Full-Scale Expansion of the Canada Pension Plan
Tab 34: Chapter 3, Province of New Brunswick Audit: Accounting for Pensions and NB Power, Report of the Auditor General —2013
Tab 35: May 7, 2013 PowerPoint presentation, "Why DB Plans Work", IFEBP
5 Tab 36: September, 2013, "How Well Does the Canadian Pension Landscape Fare?", September/October 2013 IFEBP Newsletter Tab 37: February 6, 2014 letter to the editor entitled "Why making the simple complex?", Daily Gleaner newspaper in Fredericton.
38. News Articles A. "Alward Government Wasting More Taxpayer Money on Political Ads", June 26, 2014, The Office of the Official Opposition. B. "Taxpayer-funded TV ad raises hackles", June 27, 2014, Chris Morris, The Daily Gleaner.
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