FREDERICTON (GNB) – Legislation is being introduced today to move members of the legislative assembly to a shared-risk pension plan.
"Everyone has a role to play in pension reform and MLAs are no different," said Premier David Alward. "The legislation we introduced to make public service pensions more affordable, fair, sustainable and secure for all public service members has paved the way for MLAs to adopt a shared-risk model."
Once the legislation is enacted, the members will contribute to the Public Service Shared-Risk Pension Plan and will receive their pensions on future service from this fund. Pensions based on previous service will continue to be paid from general revenue so there will be no negative impact on the Public Service Shared-Risk Plan.
"By entering the Public Service Shared-Risk Pension with government employees, they will be sharing in the same risks and rewards as the public servants who also work for New Brunswickers," said Alward.
The change to MLAs pensions will save taxpayers about $1.3 million annually.
Under this model, members will be able to retain the service they have accrued to date, but new service will be calculated differently. The age for unreduced retirement on future service will also be increased from 60 to 65. This means that regardless of when they cease being an MLA, on a go-forward basis, they will only be able to collect an unreduced pension at the age of 65.
This change will not reduce the pension cheques of former MLAs who are vested in the existing plans, but they will now receive conditional cost of living increases on par with what is received by members of the shared-risk plan.
"These pensions will become more fair and affordable for taxpayers under the shared risk model," said Alward. "This is what New Brunswickers have asked of their elected officials, and we believe it is the best course of action to offer pension equality and security for future MLAs."
There are about 90 retired members and 55 active members in both of the existing MLA plans.