Pensions of 16,000 workers, retirees at stake in court battle

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Union lawyers grilled a pension expert in a Burton court on Friday, part of a bigger battle to overturn a law passed by the Higgs Progressive Conservative government to convert the retirement plans of 16,000 public workers and retirees to something cheaper for taxpayers.

Joseph Nunes, the executive chairman and founder of Actuarial Solutions in southern Ontario, was hired by the Tory government to file a report and act as an expert witness in service of the Court of King’s Bench, which is hearing an injunction filed by Canadian Union of Public Employees, better known as CUPE.

The actuary appeared in the rural courtroom outside the capital on the third day of the hearing after listening to another pension plan adviser from British Columbia who appeared as an expert witness at the request of the union, which represents the workers.

The atmosphere was charged from the get-go. CUPE’s lead lawyer, Peter Engelmann, of the Ottawa law firm Goldblatt Partners, tried to portray Nunes as being fervently against defined-benefit plans, the very kind of retirement scheme the Higgs government was trying to abolish.

You’re not listening. I’m not objecting to government defined-benefit plans. I’m against the lack of transparency of the cost of these plans.

Joe Nunes

Nunes is a prolific writer and blogger who’s posted scores of articles on pension plans over the last two decades. The lawyer said there was plenty of his writing, publicly available, to suggest he didn’t like the traditional plans that have secured the retirement of millions of Canadians.

“I don’t agree,” Nunes fired back. “I’m opposed to the non-transparent pricing of such plans that will transfer costs to future generations.”

Engelmann was persistent in his line of questioning, citing and quoting the expert’s writings, one as recently as last spring on a LinkedIn post.

“You’ve said that taxpayers are exhausted with overly generous pension plans.”

Leaning forward in his chair from the witness stand, Nunes remonstrated with his hands.

“You’re not listening. I’m not objecting to government defined-benefit plans. I’m against the lack of transparency of the cost of these plans.”

The testy exchange between the expert and the lawyer was interrupted close to a dozen times by lawyers representing the provincial government.

Both Josie Marks and Stephen Hutchinson of the law firm Stewart McKelvey in New Brunswick raised a stream of objections that the union team was doing an improper examination of Nunes’ report and trying to add new, previously undisclosed evidence to the proceedings.

The union lawyers shot back that the other side was trying to eat up their cross-examination time by raising so many petty objections.

Keeping a perfect poker face, Justice Ivan Robichaud said he’d rule on the objections when the case resumes Thursday.

CUPE, one of the province’s biggest unions and a sworn enemy of the Higgs government, is seeking an injunction to stop a new law the Tories passed in December to convert the pension plans of the members and former members of three of its groups. Those 16,000 workers and retirees do or did everything from driving kids on school buses, to cleaning washrooms, to changing diapers at nursing homes.

The emergency measure, if granted by the judge, would buy the union time as it seeks another court challenge. CUPE says the new law violates the workers’ freedom of association and collective bargaining rights enshrined in the Canadian Charter of Rights and Freedoms and is suing in the same court, a case expected to take months, if not years.

Premier Blaine Higgs has warned that the existing pensions are at risk of failure because they are so costly that taxpayers can’t continue to bail them out for millions of dollars every year. As the plan sponsor, the government is on the hook for any shortfalls, unless it goes bankrupt.

Set up decades ago, the schemes were designed in an era when pensioners didn’t live as long and didn’t draw as many years of retirement income. Instead, the government wants to convert them to shared-risk plans.

As the name suggests, costs for shoring up the pension would be borne equally between the government and contributors. Such jointly sponsored plans are also nimbler when changes need to be made to ensure the retirement funds are more sustainable, such as tweaking indexing benefits or raising the retirement age.

During the courtroom battle on Friday, Nunes said he had a problem with the terminology used in pension circles because there were so many variations of different retirement schemes bandied about. He said people were getting lost in the different titles, such as defined-benefit plan, shared-risk plan, target-benefit plan, jointly sponsored plan, and variations within those categories.

Nunes argued that it was crucial for plan sponsors to properly communicate with members about how the various schemes work.

“We need to focus on the actual details of the plan, rather than get hung up on terminology that can be misleading,” said the actuary with more than 30 years’ experience.

Later Friday afternoon, much of the courtroom time was gobbled up by arguments between the two sides over whether five affidavits filed by CUPE – four from workers and one from a labour leader Sandy Harding, who’d negotiated with the government on the pension – were admissible or should be struck in full or in part from the evidence.

The government lawyers argued the workers’ concerns were mostly hearsay and not based on any real factual evidence, such as school bus driver Lois Daigle, who said she’d retired within a week of getting notice from the province that her retirement scheme was about to change because she was worried she’d be forced to work longer, to the age of 65.

The CUPE lawyers countered that without such written evidence under oath, there was little proof of the immediate, hurtful impact of the new law. Workers and retirees, they said, were changing when they retire, avoiding major purchases or trips, and considering second jobs because of the conversion.

The debate over the pension changes has been bitter. Both the union and the Higgs government blamed the other side for a breakdown in talks over the pension impasse last year that culminated in the introduction of the new law.

This is about pensions for nursing home workers, school bus drivers, educational assistants who don’t make a lot of money and now there’s uncertainty over what will happen.

Sandy Harding

When the bill was passed on Dec. 12, wild scenes erupted in the legislature. Hundreds of CUPE members and other labour groups, who had packed the public gallery, denounced the Tories, yelling, chanting, and singing. In the wake of the protest, several labour leaders were banned from the legislature grounds for violating rules of decorum.

Immediately afterward, union leaders vowed legal action. The charter challenge is an extension of a legal battle CUPE began years ago after a previous Tory government converted the pension plans of tens of thousands of other public sector workers and retirees in 2014. Higgs was finance minister at the time and the architect of those changes.

Harding, regional director of the Maritimes for CUPE and one of the leaders banned from the legislature, attended court this past week, along with several other union members and retirees.

She told Brunswick News outside the courthouse she was hopeful the judge would grant the injunction, allowing a pause until the charter challenge is heard.

“This is about pensions for nursing home workers, school bus drivers, educational assistants who don’t make a lot of money and now there’s uncertainty over what will happen,” she said.

“Pensions are deferred wages that you paid into. And there’s no ability for us to offset that with collective bargaining in other ways. You have to realize these pension plans have been bargained over for 40, 50 years. So it’s extremely problematic to us the government wants to decide on its own about changing them.”

– with files from Andrew Waugh