The Canadian Federation of Independent Business (CFIB) is once again squaring off against public sector pensions.
The CFIB—which is no stranger to the debate of public sector pension funding—has just released a report entitled Canada’s Hidden Unfunded Public Sector Pension Liabilities, stating that every Canadian could be on the hook to pay an extra $9,000 for the unfunded liabilities of public sector pension plans.
“The privileged status of public sector pensions has resulted in a dangerous complacency on the risks they pose to future pensioners and taxpayers,” said Ted Mallett, the CFIB’s chief economist. “Since the state of disclosure of public sector plan financials is alarmingly low, nobody knows how big the problem may become.”
The unfunded shortfall for the pensions exceeds $300 billion, according to Statistics Canada and Public Accounts, despite the extra $1.3 billion yearly contributions made by taxpayers between 2001 and 2010.
Allowing pension managers to use overly optimistic rates of return has contributed to the ongoing issue, according to the CFIB.
“For a long time, the public sector pension scheme has been unfair to taxpayers and small business owners,” said Catherine Swift, president of the CFIB. “The plans are structurally unbalanced and in need of immediate reform.”