pension benefits

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Canadians will receive meagre rate of return on CPP contributions

Canadians born after 1970 can expect a rate of return on their CPP contributions of between 2.3 per cent and 2.5 per cent.


2:00AM
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If Canadians ever wonder why it is so difficult to reform government spending, there’s a simple reason: government employee unions.

A good example (if one can call it that) is the issue of growing government sector pension costs and the outright resistance from the unions to address the problem.


2:00AM
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One theory about politics is that because politicians must get votes to stay in power—that’s their “currency”— they are unlikely to act against their own self-interest. So politicians cater to the specific voters who put them in power in the first place.


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In Alberta, almost twice as many workers in the government sector possessed defined benefit pension plans in 2011 when compared with private sector employees. That might explain why so many government employees’ unions, from the Alberta Union of Public Employees to the United Nurses of Alberta, vociferously oppose modest pension reforms proposed by Finance Minister Doug Horner.


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Canadians routinely hear about alleged growing divides in Canadian society. But here is one rift that often goes unmentioned: the divide between the pension benefits of public sector employees and everyone else.

Such inequality incurs real costs, where ordinary taxpayers pay ever more for above-market, guaranteed pension benefits that ever fewer in the private sector possess.