HALIFAX – Two public sector unions panned a Nova Scotia government proposal to offer pooled registered pension plans Monday, saying they are a poor substitute for beefing up the Canada Pension Plan.
Both the Nova Scotia Government and General Employees Union and the Canadian Union of Public Employees told a legislature committee they would not support legislation. Instead, the unions want the province to push the federal government to enhance the Canada Pension Plan as a secure means of ensuring that workers save for retirement.
Finance Minister Diana Whalen has said the voluntary pooled plans would provide a low-cost, regulated option given that only 40 per cent of working people in the province have a pension, and less than 20 per cent contribute to a registered retirement savings plan.
But Ian Johnson, a policy analyst with the government and general employees union, said he doesn’t believe pooled plans will meet the government’s goals without mandatory coverage. He said it was the biggest flaw with the proposed bill.
“We hear that businesses are keen to offer the PRPP, but what is unknown is if they will step up and contribute towards their employees’ future retirement,” said Johnson.
Carol Ferguson of CUPE said the pooled plans aren’t pensions and will offer participants no relief from investment management fees and low returns.
The labour movement wants a phased-in doubling of CPP benefits, funded by an increase in employee and employer contribution rates, she said, arguing it’s a better solution because it is mandatory, non-profit and the risks and costs are pooled with workers across the country.
“We urge premier McNeil to push for CPP expansion as most other provincial leaders are,” said Ferguson.
Liberal committee member Terry Farrell said there is nothing in the legislation that precludes the government from pushing for additional pension changes at the federal level in addition to offering the pooled plans.
The plans, to be administered by large financial institutions, such as insurance companies, would be available to people who are self-employed and people without a participating employer.
