PSAC Pension Fightback Campaign

Erosion of our pension benefits?
NO WAY!

An update on the federal public service superannuation plan

An April 1 article in the Ottawa Citizen by Kathryn May entitled «Liberals Plan Pension Overhaul» has caused some concern among PSAC members. Supposedly, the «federal pension advisory board» has been considering proposals for change, including moving the retirement-without-penalty minimum age from 55 to 60.

The PSAC has two elected officers on the Pension Advisory Committee, Brother John Gordon (National Executive Vice-President) and Brother John Baglow (Executive Vice-President for the National Capital Region). No such discussions have ever been held at the Committee. Phil Charko, the Treasury Board Assistant Secretary of the Pensions Division, has stated that both he and Minister Lucienne Robillard were «shocked» by the article, and, at a recent retreat of the Pension Advisory Committee, he stated clearly and unequivocally that «the age threshhold provisions of the pension plan are not under review.»

For the information of PSAC members, however, there are other elements of the Plan that are indeed under review. As Kathryn May’s article noted, the government is concerned about recruitment and retention in the federal Public Service. The Pension Advisory Committee has discussed the issue of how the Pension Plan could be part of an over-all strategy in this respect, and those discussions are continuing.

Is the pension plan of use when trying to recruit new employees? The general consensus is that it is not. Young workers do not generally consider pension plans as a major factor in choosing employment.

Is the pension plan helpful in retaining employees? Yes and no. As employees get older, the pension plan is an inducement to stay. But beyond a certain limit, an employee finds it much more worthwhile to retire on pension than to stay on. Beyond 35 years of service, the pension does not increase under current legislation, for example. Indeed, superannuates who want to return to the Public Service part-time are penalized under the legislation.

One possible solution, which the PSAC supports and which has some support on the Employer side, is to develop transitional retirement programs, which would allow older employees to move into part-time work while drawing a pension at the same time.

Other issues presently under discussion, or proposed for discussion by the PSAC, include:

• retirement without penalty before 55 with 35 years of service,

• optional survivor benefits

• whether the public service demographic crisis actually exists

• pension plan coordination

• and other technical issues in such areas as elective service.

The over-all concern of the PSAC is that, given the legislative «right» the employer has given itself to seize plan surpluses at will (currently being contested by the unions in the Ontario Superior Court ), there appears to be no mechanism in place for making any improvements to the plan in areas of concern to our members -- such as survivor benefits, early retirement and so on.

An advisory committee has the power to advise. The PSAC can and will push the members’ pension concerns in this forum, and can also glean information from the discussions there that will give us distant early warning of any government plans to erode our pension rights. The National President, Nycole Turmel, has made it very plain that our reaction to any such initiatives will be overwhelming and swift!