pension plans

1:59PM
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As Alberta’s provincial and municipal governments grapple with declining oil revenues and a weakening economy, a sober review of government spending should be part of any belt-tightening initiative. One place to start is the compensation of government employees, a key spending item for all governments.

10:00AM
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Since the turn of the millennium, the ever-increasing cost to taxpayers of government sector pension plans has been made evident time and again. Contribution rates have been hiked, often doubling in one decade, or the plans have been partly bailed out by governments—or both.

2:00AM
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With talks to expand the Canada Pension Plan having stalled, the Ontario government has pledged to roll out its own provincial version.

2:00AM
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Now that the province has reaffirmed its intent to lightly modify government employee pension plans, government unions will again try to divert the public from the facts.

For example, after my recent column on the ever-increasing cost to taxpayers of public sector pension plans, Guy Smith, president of the Alberta Union of Provincial Employees and Marle Roberts, president of the Canadian Union of Public Employees (Alberta), cried foul.


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.


2:00AM
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Imagine if governments engaged in a massive spending binge over the last decade, with the benefits falling to just a small part of the population—and then hiked taxes four times to pay for it. Now imagine if they argued, in some Orwellian twist of illogic, that such excess generosity was “fully funded, affordable, and sustainable” – this after the multiple tax hikes demonstrated they were not.


2:00AM
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When Alberta’s Finance Minister Doug Horner recently announced that the province will reform public sector pension plans, the reaction was predictable: government employees’ unions set their collective hair on fire. Thus, Guy Smith, Alberta Union of Provincial Employees president, remarked that the province’s planned reforms will “fundamentally” undermine the “the retirement security of more than 70,000 AUPE members.”


2:00AM
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The federal government's recent introduction of legislation to enable Pooled Registered Pension Plans (PRPPs) drew the expected responses from interested parties. The financial industry expressed support, while labour union executives described the new retirement savings plans as a mistake on the basis that it is wrong to earn a profit for providing a service.


2:00AM
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The Institute for Research on Public Policy is the latest organization to publish a study with a proposal to fix Canada’s pension system. However, it’s a proposal akin to using a battering ram to swat a fly.

Like many of the other proposals floated by a variety of groups, the IRPP study suggests expanding mandatory savings by expanding the Canada Pension Plan (CPP). Similar to all the other proposals, this latest one is overkill for a policy issue that has seriously been overblown, and comes with a number of adverse consequences.