TORONTO, May 31, 2012 /CNW/ - Every man, woman and child in Canada may be on the hook for more than $9,000 to pay for the unfunded liabilities of public sector employee pension plans. That's according to a new report, Canada's Hidden Unfunded Public Sector Pension Liabilities, released today by the Canadian Federation of Independent Business (CFIB).
"The privileged status of public sector pensions has bred a dangerous complacency on the risks they pose to future pensioners and taxpayers," said Ted Mallett, CFIB's Chief Economist. "And, since the state of disclosure of public sector plan financials is alarmingly low, nobody really knows how big the problem might be."
Based on evidence that is available from Statistics Canada, Public Accounts and other sources, the unfunded shortfall for public pension plans across the country likely exceeds $300 billion. This shortfall exists even though public sector employers (meaning taxpayers) injected an extra $1.27 billion per year into these plans between 2001 and 2010. Allowing pension managers to use overly optimistic rate-of-return assumptions has also contributed to the problem. All of which means, money promised to public sector employees in the form of pensions won't be there without additional massive contributions from taxpayers.
"We've known for a long time that the public sector pension scheme is unfair to taxpayers and small business owners," said CFIB president, Catherine Swift. "This is further evidence that many public sector pension plans are structurally unbalanced and in need of immediate reform."
Today's study is the first in a series of CFIB reports that will examine the problem of unfair and unsustainable public sector pensions. Last year, CFIB launched the Pension Tension campaign to call for transparency of public sector pension liabilities and fairness for taxpayers. Since then, nearly 38,000 small-and-medium-sized businesses have signed "action alert" petitions demanding public sector pension reforms.
To view the report in full, please visit www.cfib.ca
As Canada's largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 109,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.
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For further information or to arrange an interview with Ted Mallett, contact Gisele Lumsden or Meghan Carrington at 416 222-8022 or email email@example.com.