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PS pensions and Doris Day

PS pensions. What will Day want to do?

There is much angst at the moment among Public Servants with regard to what the future holds for their jobs, salaries and pensions. And I think that this concern has some merit given the track record of the new Treasury Board President as a spender rather than a cutter in his old job as the Alberta Treasurer. He may want to prove to his right-wing supporters that he is not afraid to take the axe to spending.

This is what he said during Saturday’s CBC interview:

Q Will public service pension schemes need to be addressed?

A We will look at everything. I am looking for an overall co-operative approach and you will see the details begin to unfold.

I take this to mean that pensions are indeed on the table as well as PS wage controls beyond 2011. Salary increases of 1.5% in each of the three years of the current collective agreement will expire on June 15 th, 2011.

So let’s put aside wages for a moment with the acknowledgement that – given the history of either the Grits or the ReformCons (doesn’t really matter who’s in power, in this case) – any medium term restraint plan will once again include impose salary increase limits.

So – to pensions.

When I signed on to this job about 13 years ago, it was with the knowledge that I would be paid at a lower rate than I would have been – all else being equal – in a similar position in the private sector. I was willing to accept this because the PS pension benefits are really a part of my salary – a deferred salary. I do pay one-third of the total contribution to my pension benefits and the government pitches in the rest. Should that ration change? Maybe. But slowly and it should certainly not be without extensive discussions with the PS Unions. This is what I signed on for and the pension is what was promised to me… and I expect the government of the day to live up to their promise.

But – you say – the private sector employees are being robbed of their pension benefits by their former employers, why should the PS suffer the same pain? This is the argument of many right-wing think-tanks and analysts but is one that is from a profit-driven perspective. Any change to the rules that benefits the bottom line is a good move according to the CFIB, C.D. Howe Institute or the National Citizen’s Coalition (the group that Stevo used to lead).

But why do we have to dumb down the public sector to the level of the private sector? What can’t the private sector pension rules be every bit as generous those in the public sector? THAT is what the employees of big business should be asking their employers.

But what if the rules were changed, not retroactively, but only for new recruits?

Then that is a different case. The new employees are coming on board knowing at the time of their acceptance of the position their own pension provisions, rates of pay, etc. In much the same way that we in the PS know that if we do want to climb the corporate ladder, we will need to achieve some degree of competence in French (if an Anglo) and English (if a Francophone). The rules of the game are up front for all to see.

Yes, imposing less “generous” pension rules of the game would create two distinct classes of PS employees – one under the old provisions and one under the new and more restrictive provisions. This, in the long-run wouldn’t be a good thing. But it may be necessary.

So to sum up:

  1. I am assuming a pension – based more or less on the rules of the road when I signed on – to be there when I choose to retire (which BTW won’t be until I’m at least 61).
  2. I am willing to make a larger contribution (I currently contribute about $7,000 per year) of my deferred salary to the fund to ensure that it is adequately funded and to take a little pressure of the public purse…. as long as the changes are made progressively and with the cooperation of the labour groups.
  3. WRT to the above – the politicans MUST apply these changes to their own pension plans as well.
  4. I am NOT willing to accept large cuts to my benefits nor to changes to the years of service or ages at which one can claim a pension (even though I personally cannot benefit from early retirement).
  5. I am willing to accept that new Public Servants may have to have a plan that is quite different from my own
  6. And I strongly suggest that the private sector and all of those chattering, right-wing business interest groups look at something other than RoI once in a while and invest in long-term commitments to their most valuable resopurces – their people.

One final note. I know that very, very few outside of the National Capital Region give two shakes about the Public Service. Mnay native Ottawans don’t realise this having grown up in a Government town. But as an “import”, I can say with a high degree of confidence that tTo the bulk of the populace, we are painted with the same brush as the politicians and would not shed a tear upon hearing of cuts to the PS pension plan. The Harperites know this and may well be willing to enact radical changes knowing that while they may lose a few seats in the NCR, the impact would be neutral or even positive elsewhere.

And THAT is waht frightens me.


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  1. […] I’ve gone on and on about the PS pension plan, as have others. And if you are in the PS, you pretty much like the status quo, but if you are not, you pretty much think that the pesnions are already way too generous for a buncha lazy good-for-nothing bureaucrats. […]

  2. I do think the PS is likely to get the shaft unfairly on this one. Irrespective of what i think of the PS pension relative to what everyone else gets, it was a condition of employment and changing it negatively after the fact is rather unethical.

    Re: banks bumping up pensions…
    The gov would love nothing more than for the banks to, say, kick in $200 mil to their employees pensions… that’s all money that’s going into government coffers in the future, taxed not at the lower corporate rate, but at the higher personal rate on the $200 mil plus all the future profits it makes in pension funds. That’s slick… a nice suggestion for the government to make for someone else’s money. The banks, on the other hand, lose for it, and consumers of retail banking lose because that’s where the banks will make up the lost profit.

    If I was to change the gov pension fund, I’d do it thus:

    1. Close the current pension fund. It lives under its current rules for its current members until they finally die off or leave the civil service in a way that doesn’t generate a pension.
    2. Open a new pension fund subject to the same rules and regulations regarding funding as all the corporate funds. All new hires to the civil service would fall under this plan, including people who left the civil service without a pension under the old system but come back.

    That would likely cause the least amount of grief, keep the most people happy, and since the gov would then be operating on the same rules they force everyone else to operate with, should be beyond reproach.

  3. dave1949 says:

    I couldn’t agree more. People seem to think that pensions are some sort of present given to someone at the end of their working life.

    Not so it is part of the compensation that was offered for doing the job. I wonder how these people would feel if on the next paycheck the pay was shorted by some percentage and the boss just said. Oh I decided we were not going to pay you that much anymore.

    I worked for GM and just lost a little bit off my pension benefits this year and know that we will be faced with the same crap over and over in the future as the bosses give themselves million dollar bonuses for running the company into the ground.

  4. Ken says:

    @trasheeIf you could find that report on the effect on the banking industry, I’d LOVE to read it.

    If they kicked in even 10% of the profits each year, that’d be say $200 million extra into the pensions. Over 10 years, that pension would be $2b to the good, not including market returns. And could you imagine how the employees would feel about that??

    But while we’re dreaming about corporations doing what’s best for the consumer and politicians & the bureaucracy doing what’s best for the taxpayer, I’ll dream about winning LottoMax as well…

  5. trashee says:

    Re – 2 shakes… Yeah Ken – I didn’t mean to imply that everyone in the NCR is all warm and fuzzy toward the “guvvies”… but, compared to the outside world, they are a lot more sympathetic here than in Red Deer, Parry Sound, Jonquière or Brandon…
    Re – ways to improve private pension plans – generally, I agree that something would have to give to offer better plans… but there ARE sectors that report huge profits who could afford to bump up their plans quite easily. I remember seeing a report a few years back (I wish I could remember the title or rthe context) that showed the impact of a public service type pension plan on the banking, pharmaceutical and real estate sectors….

  6. Ken says:

    “[Why] can’t the private sector pension rules be every bit as generous those in the public sector? THAT is what the employees of big business should be asking their employers.”

    I wish we could. I really do. Profit & the bottom line has been the driving force for years. Fortunately for me I got out of the “profit at all costs” type of environment and work for an organization whose corporate culture isn’t like that.

    In the meantime, unfortunately, the only way the private sector can improve pensions is to either increase revenues (increase prices and face lower demand for their products & services) or decrease expenses (usually staff layoffs or closing parts of their operations). They don’t have the power of taxation like the government does to make up shortfalls. If the government of the day determines that the PS pension is facing a shortfall, then they’ll increase taxes. Sure, they’ll probably increase your contributions too, but the easiest way is to increase taxes (or borrow).

    “very, very few outside of the National Capital Region give two shakes about the Public Service”

    Hate to break it to you, Trashy, but there’s a lot, a lot of people within the NCR that don’t give two shakes about the Public Service also. If a stereotype exists, it’s probably because at some point in the past it was true, and perhaps continues to be true.

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