The Provincial Government has an obligation to ensure that money belonging to the taxpayers of this province is allocated to address issues of concern to all senior citizens throughout the province. And while this certainly includes public sector pensioners, it is important that all seniors benefit from government initiatives and program spending, said the Honourable Tom Marshall, Minister of Finance and President of Treasury Board.

Minister Marshall said the vast majority of seniors in Newfoundland and Labrador do not have the benefit of any retirement pension. Of the approximately 72,400 seniors in the province who are over age 65, only 26,400 (or 36 per cent) have any pension income from an employer-sponsored plan or personal retirement savings. Of the 26, 400, the total number of Public Service Pensioners is 10,043. This means a total of 64 per cent of senior citizens have no formalized pension plan income and, for the most part, must rely upon other means to live in their retirement years. This includes initiatives put forth by the Provincial Government and federal benefits such as CPP, OAS and GIS.

"The Provincial Government has a responsibility to all senior citizens in Newfoundland and Labrador; not just to one specific group," said Minister Marshall. "That is why we are providing assistance through specific measures such as enhancements to the seniors� benefit, general tax reductions, the home heating fuel rebate, elimination of insurance premiums tax, reduction in motor vehicle registration fees, enhancements to the Newfoundland and Labrador Prescription Drug Program, and other significant investments in Newfoundland and Labrador. In addition to all of those wonderful initiatives, our government stepped up to the plate and secured both the Public Service Pension Plan and the Teachers Pension Plan with an investment of almost $3 billion. While we hear the arguments put forward by the public service pension group, as a government we must consider the whole picture and put forth initiatives that put money back into the pockets of all of our seniors. Seniors have contributed immeasurably to the well being of our province for decades, and they all deserve equal and fair treatment."

Minister Marshall said public sector pensioners are currently receiving the benefits that their contributions, matched by the employer, were designed to pay for, and to make changes to those previously agreed upon arrangements would seriously impact the province�s ability to spend in other areas. "To fully index the Public Service Pension Plan and the Teachers� Pension Plan on a go forward basis would increase the plan obligations by some $1.8 billion," said Minister Marshall. "Even an ad hoc increase of four per cent would increase plan liabilities by $160 million, negatively impacting the funded status of the plans and undermine the measures taken in 2006 and 2007 to address the unfunded liability. You cannot isolate this request from the many, many other initiatives we have undertaken to substantially improve the lives of seniors in our province.  It does a disservice to the other seniors and members of the general public."

When the Williams Government took office in 2003, the Public Service Pension Plan and the Teachers� Pension Plan were significantly under-funded to the tune of approximately $4 billion. Minister Marshall said the Teachers� Pension Plan was 26 per cent funded and would have run dry by 2012, meaning the Provincial Government was paying $200 million annually from general revenues just to meet the pensioner payroll.

Minister Marshall said the Williams Government has worked hard to improve the funded status of the pension plans.  In 2006 and 2007, the Provincial Government took major steps to address the unfunded liabilities of the two largest public sector pension plans. In 2006, the Provincial Government paid $1.953 billion of the 2005 Atlantic Accord advance payment into the Teachers� Pension Plan and in 2007, paid a further $982 million into the Public Service Pension Plan. In spite of these efforts, the plans continue to have an unfunded liability.

"Any increase in unfunded liability would have to be covered by all taxpayers including seniors who are not receiving any type of employer-sponsored pension plan or workers who do not have a pension plan," said Minister Marshall. "It would be unfair to use the taxes of all citizens to pay a benefit to one group of citizens solely because that group are former government employees. If government is going to use tax dollars to help senior citizens, then all senior citizens should benefit."

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