Presentation on theme: "1 The Professional Institute of the Public Service of Canada L’Institut professionnel de la fonction publique du Canada www.pipsc.ca www.pipsc.ca Pension."— Presentation transcript:
1 The Professional Institute of the Public Service of Canada L’Institut professionnel de la fonction publique du Canada www.pipsc.ca www.pipsc.ca Pension Session Ontario Stewards Council Sept 29, 30, 2011 by: David Gray
2 Your Pension Plan: The Lost Surplus In 1999, the Government misappropriated $30 billion of the Pension Plan’s surplus which helped balance the Government’s Budget for that year and 4 subsequent years In 2010 The Ontario Court of Appeal upheld the decision that the lower Court made, i.e. that the Employer can remove surplus PIPSC filed an application for Leave to Appeal to the Supreme Court of Canada on December 6, 2010, leave was granted and the case will be heard in early 2012 (currently set for Feb 9, 2012)
3 Your Pension Plan: The Constitutional Challenge A constitutional challenge was filed in May 2008 by PIPSC. In November 2008 the Institute served its main affidavit on the government. This challenge seeks to invalidate provisions in the Act that restrict the scope of bargaining. One of the areas restricted is pension –Your pension currently cannot be negotiated as it is not part of the Collective Agreement
4 The 2011 Federal Budget Numerous media reports in the months leading up to to the 2010 and 2011 budget refer to “gold- plated” public service pensions. Coverage predominantly focuses on the “levelling-down” approach advocated by think tanks such as the C.D. Howe Institute and the Canadian Federation of Independent Business (CFIB). Concerns
5 Pensions 101: There are two types of pension plans: – defined contribution (DC) & defined benefit (DB) A DC plan has contributions by the member and employer, pension is based on investment returns. – In addition to returns, the state of the market and the interest rate at the time one purchases an annuity. A DB plan has contributions by the member and the employer but the pension is predetermined. Shortfalls are made up by the plan sponsor.
6 Your Pension Plan: What kind of Plan are you in? You are in a Defined Benefit Plan Your Plan is in sound financial condition it currently has a $1.8 Billion surplus per the Auditor General contrary to what the CFIB and think tanks would have you believe.
7 YOUR Pension Plan: How it works The benefit calculation is: FULL PENSION = 2% x 35 Years x best 5 year average 2%X number of years of pensionable service X average salary for your 5 consecutive years of highest paid service
8 YOUR Pension Plan: When can you retire? - Normal retirement age is 60 -You can retire at age 55 with 30 years of service without penalty. - When you retire you will get a monthly annuity for life. - You can also retire anytime after age 50 with penalty. - If you are in a relationship when you retire - (i.e. married or common-law) then your surviving spouse will receive 50% of your unreduced pension for the remainder of their life. - If you are single when you retire - your estate will receive the equivalent of a guaranteed 5 year pension.
9 Your Benefit is Integrated with CPP/QPP at Age 65 -This means that your pension will be reduced at age 65 by an approximation of what you will receive from CPP/QPP based on how long you have worked for the government
10 Medical Retirement Medical retirement is complex and depends on a variety of factors. It must be certified by Health Canada and results in the receipt of a pension based on years of service without penalty. It may be topped up by Disability insurance until age 65 depending on circumstances. If you have questions on medical retirement contact PIPSC.
11 Your Pension Plan: The Contributions You Make Contribution Rate: – In 2011 members contribute 5.8% to the CPP/QPP maximum ($48,300) and 8.4% above – This means you contribute 10.75% (CPP/QPP and Superann) on the first $48,300 and 8.4% above that.
12 YOUR Pension Plan: What it costs you - Currently you pay 35% of the cost of your pension and this will reach 40% by 2013. - The Employer pays the balance. - There is talk to change the 60/40 split to 50/50 after 2013 which will require a change in the legislation which we will oppose.
13 PUBLIC SECTOR PENSION PLAN MYTHS The PS pension plan is “gold-plated” and “overly generous”. PS employees are retiring “on the backs of Canadian taxpayers”. PS employees haven’t “earned” their pensions. PS plans cost too much.
14 PS PENSION PLAN MYTHS (ctd.) A “gold-plated” and “overly generous” plan? The average annual pension paid from the PSSA(*) plan for members who retired up to and including 2008 was approximately $23,500. The average annual pension paid from the PSSA plan for members who retired in 2010 was approximately $35,600. (*) Public Service Superannuation Act
15 PS PENSION PLAN MYTHS (ctd.) PS employees haven’t earned their pensions? PS employees have traded-off higher wages for income security at retirement. Private-sector professionals enjoy variable pay, lump-sum bonuses, stock options and generally higher salaries that are not available to their PS counterparts. The PS pension plan is an essential part of the overall compensation package which allows the public service to offer competitive recruitment and retention incentives.
16 LEVELLING THE PENSION LANDSCAPE: THE FIGHT CONTINUES The fundamental issue is not that public sector pensions are too generous – the problem is that the majority of Canadians do not have access to a Pension Plan In addition, many Canadians don’t have enough savings or other forms of income to ensure an adequate retirement. Our union stands for retirement security for ALL Canadians.
17 What PIPSC is doing for you! 1.Pursuing the legal challenge on the surplus grab. 2.Pursuing the constitutional challenge. 3.Submitted position paper to Federal Government on pensions. 4.Attending consultations (whether invited or not!) 5.Member education campaigns (like this one). 6.We are meeting with Government officials to state our concerns. 7.We are submitting recommendations to the government as part of the 2011 pre-budget consultation process. 8.We are addressing articles and reports that are attacking YOUR pensions. 9.Correcting misinformation using campaigns such as the CFIB Prosperity is Mutually Beneficial And more…
18 WHAT YOU CAN DO FOR YOU! Talk to your friends, family and neighbours about how important your job and your colleagues jobs are to the health and safety of Canadians. Go to the CFIB Prosperity is Mutually Beneficial link on www.pipsc.ca and use the information to inform businesses of what we do www.pipsc.ca Support initiatives aimed at ensuring retirement security for all Canadians such as increasing CPP pensions. Let your employer know where you stand by displaying PIPSC pensions materials (available online) in your workplace. BE READY TO SHOW YOUR SUPPORT WHEN THE TIME COMES !!!