Smith: Attack on public pension plans can’t be justified

This opinion-editorial from UNA President Heather Smith is published in today’s Calgary Herald:

[ http://bit.ly/1iH6XB9 ]Smith: Attack on public pension plans can’t be justified

BY HEATHER SMITH, CALGARY HERALD JANUARY 27, 2014

Re: “Prudent pensions; Reform of public-sector plans is in everyone’s best interest,” Editorial, Jan. 21.

In an editorial supporting Alberta Finance Minister Doug Horner’s plan to gut the pensions of tens of thousands of Albertans, the Calgary Herald got many facts wrong and twisted almost everything said by the unions representing approximately 290,000 members of the province’s public service pension plans.

In mid-September, Horner announced that major changes would be made to Alberta’s four public-sector pension plans, including the largest, the Local Authorities Pension Plan (LAPP), in which almost all of the members of United Nurses of Alberta are enrolled.

The Herald’s editorial accuses Alberta public service unions like UNA of advising the government to “twiddle its thumbs” while future pension commitments become “an overbearing burden on taxpayers.”

Nothing could be further from the truth. What the unions have told Horner and the government is that the pension plans are healthy now and measures have been put in place by plan members and employers to return them quickly to fully funded status.

So plan administrators are not blindly relying on investment returns to improve, as the Herald falsely claims, and no one in any of these plans is “rolling the dice” on financial market performance.

What the unions do argue is that the actions Horner and the government propose to take will undermine the future viability of the pension plan members paid for.

To support this argument, the coalition of affected unions engaged the services of an independent professional actuary to examine the plans — and it was that impartial study by Vancouver-based George & Bell Consulting that showed the changes proposed by Horner were neither justified nor sensible.

So when the Herald says, “hope is not a strategy,” it is being disingenuous, because the LAPP and other pension plans’ boards have already adopted practical and effective strategies — action that Horner’s plans will undermine.

It is true, as the Herald asserts, that “Horner has clearly and repeatedly stated that although there is no crisis today, the long-term sustainability of these plans must be addressed now.”

Yes, Horner has said that. The trouble is, it’s quite misleading — as the minister must know.

This is because the long-term sustainability of the plans has been addressed by members and employers, as the impartial actuarial study shows. That’s the same view, by the way, as the one held by the professionals who now manage the plans. So Horner is, in fact, “manufacturing a crisis” for the government’s own purposes.

The Herald also denies Horner’s proposed changes are “draconian” and describes them as “reasonable measures to prevent future pension commitments from becoming an overbearing burden on taxpayers.”

Never mind that taxpayers aren’t directly on the hook for pensions paid for by members and their employers, Horner has proposed a cut of 25 per cent or more in benefits earned after Jan. 1, 2016, and if that isn’t “draconian,” it’s hard to imagine what is.

Imagine how the Herald would scream if Horner, instead, had decided to raid the bank accounts of RRSP owners to avert some imagined future crisis! Yet, when you consider the true source of pension contributions, his plan is not really that different — other than the fact public employees are easier to victimize.

It is also untrue, as the Herald and Horner claim, that retirees now collecting the pensions they paid for “won’t be affected.”

The Horner plan also proposes the imposition of hard contribution caps on plan members. If we encounter another financial crisis like the one that happened when the bankers went wild in 2008, the only way to respond and keep the plans viable will be to cut benefits!

Younger workers will be hit first, but cuts to benefits for retirees will inevitably have to be considered in such a crisis — which is bound to happen sooner or later.

The Herald even tries to muddy the waters by pointing to vague problems in other jurisdictions — where, in some cases, but not all, pension plans really are in trouble. But that’s a question of management, and Alberta’s plans have been soundly managed. So plan performance elsewhere is irrelevant here.

So, in the end, what’s the Herald’s bottom line?

Well, it quotes the Fraser Institute, a far-right “think-tank” supported by donations from multinational corporations with an interest in destroying pensions for all workers and encouraging a globalized race to the bottom, saying these Alberta employees should be taken down a notch.

To support this, the Herald cites the disgraceful fact that many other Albertans do not have fair pensions, something of which the Fraser Institute apparently approves, to make the untrue claim these are the people who “will end up footing the bill.”

And it disingenuously tries to pass off pensions that earn their owners an average of less than $15,000 a year as “lavish.”

Someone’s doing some “spinning” all right, just as the Herald claims, but it’s not union leaders!

It’s the government of Alberta and its supporters, and they ought to be ashamed.

Heather Smith is president of the United Nurses of Alberta.

Dave Cournoyer
Communications Advisor
United Nurses of Alberta
Website: www.una.ab.ca
Office: 780 425 1025
Mobile: 780 913 1563

Advertisements

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s