CFIB calls for end to $7,000-a-year perk for government workers who
TORONTO, June 18, 2013 /CNW/ - Federal public employees who retire early
are eligible to collect a "bridge benefit" (a temporary income top-up
that ends when a retired public servant reaches the age of 65) which
can be as much as $105,000 per retiree, according to a new study, The Case for Ending Early Retirement in the Public Sector, from the Canadian Federation of Independent Business (CFIB).
At the federal level, over 55,000 pensioners received an average annual
bridge benefit of roughly $7,000. The earliest retirement age for
federal public servants to receive a reduced pension is 50. A federal
government worker who retires at that age is eligible to collect
$105,000 in bridge benefit payments that are not available to private
"We've known for some time that public sector pension plans are
financially unsustainable, but this report provides even more evidence
of how unfair they are to the rest of us taxpayers," said CFIB
president and CEO Dan Kelly. "If an ordinary working Canadian retires
before 65, they get a CPP penalty for the rest of their life. I think
Canadians will be shocked to learn that if a government workers retires
at 57 or 61, we as taxpayers make up the difference and pay them the
equivalent of the full CPP. This is yet another benefit for government
workers that is unavailable to us taxpayers."
With the exceptions of Alberta, Saskatchewan and Manitoba, similarly
overly-generous bridge benefit provisions can be found in pension plans
for provincial public servants. The bridge benefit is especially
expensive in the Maritime Provinces at around $8,000 per year.
"The way the rules are structured, public servants would be foolish not
to retire early. The bridge benefit is an outrageous perk and a
perverse incentive that should be eliminated," said the author of the
report, CFIB research analyst Marvin Cruz.
In 2011, the federal government was on the hook for $2 billion in
pension benefits to public servants who retired before the age of 65.
That's 44 per cent of the $4.6 billion in total annual pension benefits
payable to retired federal public servants.
Eight out of ten public sector workers (whether at the federal,
provincial or municipal level) who retired between 2007 and 2011 did so
before the age of 65. Recent changes by the federal government to
increase the age of retirement for employees hired as of 2013 to the
age of 65 is a step in the right direction, however, the federal
government needs to do more to bring retirement policies more in line
with the private sector.
"It's disturbing that the unions are calling for higher CPP/QPP premiums
on hard-working Canadians at a time when public servants can
essentially have their cake and eat it, too," added Kelly. "That's why
CFIB launched the All Signs Point to Trouble campaign. Canadians shouldn't be forced to pay a nickel more for CPP
until governments at all levels make meaningful reforms to public
sector pensions. Eliminating the bridge benefit would be an excellent
place to start."
To read The Case for Ending Early Retirement in the Public Sector, please visit www.cfib.ca
To read a backgrounder on the report, please visit www.cfib.ca
Entrepreneurs are encouraged to sign the Don't Hike CPP/QPP online
petition at www.cfib.ca
CFIB is Canada's largest association of small and medium-sized
businesses with 109,000 members across every sector and region.
SOURCE: Canadian Federation of Independent Business
For further information:
To arrange an interview with Dan Kelly, please call Gisele Lumsden at 416-222-8022 or by email at email@example.com.