Federal workers pay their fair share of the Public Service Pension Plan

OTTAWA, May 20 /CNW Telbec/ - Federal public sector employees work hard for and make significant contributions to their pension plan. Cuts to public sector pensions would harm communities and the Canadian economy. That's the message that the Public Service Alliance of Canada is sending to the federal government in response to the corporate lobby's attacks against public sector workers and their pensions.

"Employees are the main contributors to their pension plan. They contribute more than 10 cents of each dollar earned," said PSAC National President John Gordon, in response to recent attacks from the Canadian Federation of Independent Business.

"They also pay into the Canada Pension Plan or the Québec Pension Plan, but when they turn 65, their public service pension benefit is reduced by the same amount that they receive from CPP or QPP."

Prior to 1999, federal employees made 40% of contributions to the Public Service Pension Plan and the government contributed 60%. That year, the government adjusted the rates to 35%-65% to make up for the fact that it withdrew a $36B surplus from the pension fund, using it to pay down government debt. This would have been illegal had it been done with any other private sector pension plan.

Also, federal public sector workers' contribution rate is increasing and will settle at 40% in 2012-2013, which is the standard rate for pension plans in Canada.

The viability of the pension plan is not in question. The latest report from the Chief Actuary of Canada tabled in Parliament in November 2009 stated that the Federal Public Service Pension Plan is adequately funded and is running a surplus, due in part to the large contribution by employees.

"Public sector works have fought hard to ensure that they will not retire in poverty," said Gordon. "We object to the idea of a race to the bottom. That's why the union movement is fighting hard for retirement security for all Canadian workers."

Federal and provincial ministers will be meeting in Charlottetown, PEI in June to discuss the future of retirement for all Canadians. PSAC has joined the Canadian Labour Congress' Retirement Security for All campaign and is demanding that the federal government:

    
    -   Introduce concrete measures to safeguard federal public service
        pension plans.

    -   Introduce specific measures to safeguard all defined benefit pension
        plans.

    -   Improve retirement security for all Canadians by doubling Quebec-
        Canada Pension Plan benefits and immediately increasing Old Age
        Security and Guaranteed Income Supplement for all retirees.
    

SOURCE PSAC

For further information: For further information: or to book interviews: Alain Cossette, PSAC Communications, (613) 293-9210 (cell)


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