Letter from Interim President
RE: CSSF Pension Update
Posted: August 31, 2012
As many PEI UPSE members may already be aware, the PEI government and public sector unions are currently having discussions regarding our public sector pension plans, including the Civil Service Superannuation Fund (CSSF). The process that led to the discussions began this Spring when government approached the unions to advise of a significant funding shortfall, and seek their cooperation and input in exploring ways to address and assure future stability. PEI UPSE agreed to participate in the discussions which began on June 26th and 27th. A working group made up of government and union representatives (UPSE, PEI Teachers’ Federation, CUPE, IUOE and the PEI Nurses Union are all involved) has been charged with exploring alternatives and possible changes, and will be asked to make recommendations to the Unions and Government.
The CSSF is a very good pension plan and provides significant financial stability for retirees and future retirees. PEI UPSE is committed to maintaining the Plan as much as possible, but we are challenged by a number of factors which have created a deficiency in the Plan’s funding and contribute to increased costs. Life expectance is increasing, which means that our retirees are drawing their pensions for longer; our ratio of retirees to active contributors is growing; interest rates remain low, and investment returns since the 2008 economic crisis have continued to lag behind funding assumptions. We think it is prudent to consider ways to manage these realities in order to ensure that our pension plan is around for the long term, and is there for you when you retire.
Be assured, however, that this does not mean we will simply accept the Government’s view that changes are inevitable. In cooperation with our sister unions we are subjecting the Government’s conclusions regarding the pension plans to serious scrutiny. The Unions have retained an independent actuary who will advise us on the soundness of the pension plan valuations thus far, who can assess from our members’ perspective any proposals from the Government, and who will be in a position to advise us as to the best and most cost-effective way to spend our pension dollars.
In addition, PEI UPSE has retained Susan Philpott (Koskie Minsky LLP) to advise us and participate in the working group meetings. Sue has worked extensively with PEI UPSE in helping to achieve reform on the Public Sector Employees Group Insurance Plan and will be an invaluable asset to the union as this process to achieve a healthy and sustainable pension plan for the membership unfolds.
Change may be unavoidable. The Government seems determined that some changes are required, and may seek to impose them if we cannot agree. There will almost certainly be some increase to contributions (both member and employer) in the future, and that may be coupled with benefit changes. We will work hard to minimize the impact on you, and fight to safeguard your interests as much as we can.
If you wish to have more information on the pension plan please consult the most recent PEI UPSE Advocate. On pages 7 and 8 of the Advocate is an article which provides information on the CSSF. It is available on the PEI UPSE website at http://peiupse.ca/advocate/2012_ADVOCATE_SUMMER.pdf. You may also want to visit the Civil Service Superannuation Fund website at http://www.gov.pe.ca/pensions/index.php3 for further information.
We will continue to provide information on the pension discussions on a regular basis, and will seek your input when the opportunity arises.