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The Professional Institute of the Public Service of Canada L by Xw6rV7j

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									The Professional Institute of the Public Service of Canada
L’Institut professionnel de la fonction publique du Canada


                 www.pipsc.ca



          Pension Session
       Ontario Stewards Council
          Sept 29, 30, 2011


                               by: David Gray

                                                             1
            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)

                                                      2
         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
                                                            3
      The 2011 Federal Budget

                   Concerns



 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).

                                                    4
                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.

                                                               5
    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.




                                                 6
          YOUR Pension Plan:
            How it works

• The benefit calculation is:
       number of years       average salary for your 5
2%   X of pensionable    X     consecutive years of
           service             highest paid service



 FULL PENSION = 2% x 35 Years x best 5 year
                 average



                                                         7
             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.
                                                                 8
    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




                                             9
          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.



                                              10
        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.


                                         11
         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.


                                                 12
    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.



                                                 13
            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
                                                     14
         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.
                                                        15
                 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.


                                                           16
          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…

                                                                 17
            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
• 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
                                                            18
                   WHEN THE TIME COMES !!!
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            Questions?


• Any Questions?




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