Retirees from the municipal and provincial sectors are continuing their fight in court to recover the partial indexation of their pensions and reduce their impoverishment. These steps will be decisive for future generations, according to several observers, in the context where governments are trying to control the costs of retirement plans.
“It’s a bit of an easy solution, to cut the income of isolated and vulnerable people,” laments René Allard, president of the Association of Retired Management Personnel of Quebec.
In 2017, under the pretext of a deficit in their plan fund, he and his former retired colleagues found themselves faced with a fait accompli. Courtesy of Law 126 adopted in the National Assembly, their pensions would be frozen for six years instead of increasing slightly with the cost of living.
Three years earlier, a similar fate, accompanied by a similar justification, had awaited the employees of a good part of Quebec’s cities. In this case, it was Bill 15 (Act to promote the financial health and sustainability of defined benefit pension plans in the municipal sector) which allowed municipalities to indefinitely withdraw the 1% per year indexation from employees and retirees, which had nevertheless been negotiated in Montreal just a few years earlier.
“At the time, we negotiated this because long-term retirees found themselves below the poverty line,” says Monique Côté, who then chaired the city’s white-collar union. Unfortunately, history will repeat itself. »
Both municipal and provincial retirees felt that they were being ignored by the government and that they had to challenge these laws in court. The former also won their case before the Superior Court and the Court of Appeal of Quebec. This measure was deemed unconstitutional for people who were retired when Law 15 came into force.
“The courts have recognized that retirement benefits are a condition of employment. It was negotiated,” underlines Lucie Lamarche, professor in the Department of Legal Sciences at UQAM. “We are coming head-on into freedom of association and negotiation,” she adds.
A betrayal
The Attorney General of Quebec, however, brought the case before the Supreme Court, which should decide in the coming months whether it agrees to hear it. The lawyer for retirees of the Management Staff Pension Plan, Mr.e Guillaume Charlebois, of the Davies firm, judges that the same logic applies to his clients in the provincial sector. They therefore made a request to take class action, which was granted by the Quebec Court of Appeal.
“A retirement plan is part of the overall compensation,” explains Mr. Allard. I paid contributions throughout my career with a view to a predictable pension whose provisions were known. We expect the employer to respect its commitment, we plan our retirement accordingly. And then we suddenly learn that he is breaking the agreement. But I can’t go back in time to resume my contributions. »
Impoverishment has hit the members of his association hard, believes Mr. Allard, since inflation exceeding 6% has led to a sharp drop in their purchasing power. But this cause has an even broader importance, he believes. “If the government can pass a law with us, it could do it with others. We don’t want this to create a precedent. »
A strong trend
Several university researchers have also highlighted the strong trend in recent decades towards the weakening of pension systems and the disengagement of the State in this area.
“If we want to control costs, attacking the indexation of pensions is a less shocking way in the eyes of the public than increasing contributions and reducing workers’ salaries,” indicates Pierre Tircher, associate researcher at the Institute. research and socio-economic information.
The coordinator of the Retirement Observatory, François L’Italien, also notes that indexation is a mechanism that seems more abstract and distant for ordinary mortals. According to him, it is increasingly disappearing from “ kit basic” pension plans.
Lucie Lamarche notes for her part that retirees constitute the least well represented group in union negotiations, which can put them in a sacrificed position.
In this context, the FADOQ Network is concerned about the future of retirees condemned to having more and more difficulty making ends meet. “Everyone would benefit from a more global reflection on retirement in Quebec,” argues Philippe Poirier-Monette, special advisor for government relations.
Mr. Tircher also believes that a public debate should take place. “But it takes place in court,” he laments.
Unfortunately, legal processes are long in Quebec. Meanwhile, retirees are losing their lives while others are tightening their belts.
The ministers concerned by these questions did not wish to comment since they are currently before the courts.