Developing a consultative approach
There is growing concern that public sector DB pension plans may no longer be sustainable as presently structured, given their size, maturity, the growing number of retirees and the challenging fiscal realities most public sector plan sponsors are currently faced with.
As a result, a number of provincial governments are considering the issue of how to make public sector pension plans not only more affordable, but also highly secure, transparent and fairer for all generations. Morneau Shepell worked with the Task Force that developed the New Brunswick government’s shared risk pension plan model. We understand the issues governments need to tackle having been a part of the process.
Our real-life experience in working with governments and their employees / unions to solve pension sustainability issues has highlighted these factors for success:
- Be collaborative and transparent. Ensure that all stakeholders understand the process and its objectives and invite them to be part of the dialogue.
- Be realistic about the problems. Prioritize issues and address the most pressing challenges.
- State outcome goals up front. It’s important to have all stakeholders understand the desired outcome from the outset.
- Take a long-term approach. Our clients have said they weren’t looking for a quick fix.
- Think differently and keep an open mind. There is more than one option and it’s important to consider all possibilities in terms of what you’re trying to achieve.