News Release

FREDERICTON (GNB) – Legislation was tabled today to formalize the pension reform agreement struck between the provincial government and the New Brunswick Teachers' Federation.

The agreement was approved by the federation's board of directors on April 12.

“Like all pension plans, the teachers' plan had its own requirements and challenges that were addressed,” said Finance Minister Blaine Higgs. “As with the other plans that have been reformed, we collaborated with plan representatives in order to create a solution that also met our key principles for pension reform.”
 
The new pension legislation meets the four principles set out for pension reform:

●    Sustainability: The changes will eliminate the deficit facing the Teachers' Pension Plan and make it sustainable for the future.
●    Affordability: Similar to the other public sector plans that have been reformed, the funding ratio for the Teachers' Pension Plan will reach a 50/50 ratio and taxpayers will no longer make special payments.
●    Security: Similar to the other public sector plans that have been reformed, the plan will be regulated through the superintendent of pensions, with a high likelihood that both benefits and cost-of-living increase objectives can be met.
●    Intergenerational equity: Similar to the other public sector plans that have been reformed, teachers will have to work longer and contribute more than they did under their old plan to receive an equivalent pension. Also like the other plans that have been reformed, on a go-forward basis, active teachers' pensions will be based on an indexed career-averaging formula. Unlike the other plans however, future annual indexing for retired teachers will not exceed 75 percent of the consumer price index for retirees. Retired teachers will be sharing in the solution which will limit the increase in active teachers’ age plus service retirement formula from 87 to 91.

“This legislation will make the teachers' pension plan much more secure for members and affordable for taxpayers by capping contributions and ending the practice of special payments,” said Higgs. “It is clear that there is support among teachers, both active and retired, for taking action today in order to ensure this plan will be there for future generations.”