The chair of the pension committee for the association representing retired Nova Scotia government employees is calling for changes to address hardships members are facing as inflation cuts into their buying power.

Fred Morley told MLAs on the legislature’s public bills committee on Monday that in the last 15 years members of the plan have seen retiree expenses increase by 40 per cent, while pensions have gone up by just 10 per cent. It translates to a cumulative loss of $27,000 in income and spending power, he said.

Morley said there have been no increases in the last five years, despite a 20 per cent increase in prices and the highest inflation in the last 50 years.

“Inflation has dramatically eroded the purchasing power of our members,” he said.

‘A lot of repercussions’

In an interview after his presentation, Morley said the situation is forcing members, who have an average annual pension of $22,000, to make difficult decisions.

“People are having to sell their homes, they’re having to move in with their kids,” he said, adding that he’s also heard stories about members having to use food banks and some who have found themselves homeless.

“When you’re not keeping up with inflation, there’s a lot of repercussions to that and those are the facts.”

Changes to the plan proposed by the provincial government will make things even worse, said Morley.

The Financial Measures Act includes a plan to amend the Public Service Superannuation Act to change the time between comprehensive reviews of the plan from five years to seven. Morley said five is already at the long end for pension plans and adding two years means even more time between opportunities to reconsider the structure of the plan.

Following the law

Finance Minister John Lohr told reporters at Province House that the proposed change comes as a recommendation from the pension plan trustees and that the government is bound by the act to follow any such recommendation. He said the process takes about two years and speculated that the trustees wanted more time between those efforts.

But Morley said the legislation falls under government’s control and it’s within their purview to make changes.

“Making reviews less frequent weakens oversight,” said Morley. “That responsibility rests entirely with government, not the trustee.”

Other changes he called for on Monday include reviewing cost-of-living adjustments every year, rather than the current practice of every five years. Morley suggested consideration be given to merging the plan with the two other major government plans for teachers and health-care workers.

He said the move would ensure consistency in governance for all government employees and give them collectively the ability to make more high-profit investments.

The changes he proposed wouldn’t cost the government anything, Morley said, but they would lead to more fairness and transparency for the 3,000 members the association represents and the 20,000 retired public servants and their survivors who collect benefits through the plan.

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