The Public Sector Pension Investment Board’s annual report boasted a healthy 14.5% return for the 2011 fiscal year, resulting in a gain of $7 billion and an approximate $58 billion in net assets for the year ending March 31, 2011.
However, despite these positive figures, the public sector DB plan has been under attack from various lobby groups.
One such group, the Canadian Federation of Independent Business (CFIB), has launched a campaign against proposed increases to the CPP and QPP, saying the increases will only harm small business owners and their employees. As part of its campaign, the organization is pushing for changes to current public service pension plans, citing the system as unfair.
“The real crisis lies in unsustainable public sector pension commitments and the lack of fairness in the Canadian pension system overall,” states the CFIB website. “There is already too large of a gap between private sector and public sector retirement benefits—a gap that will not go away and will only grow larger unless governments address pension inequality. You should not be asked for one more cent in payroll tax until federal and provincial governments fix Canada’s pension unfairness.”
The CFIB says a CPP/QPP increase can be avoided by targeting the public sector pension plan. It suggests putting new public servants on more cost-effective DC plans and ensuring that employees in both the public and private sectors are required to put in the same number of working years. However, the CFIB clarifies that it is not suggesting current retirees should lose their pension benefits or that they be taken away from those who have already earned them.
However, the Public Service Alliance of Canada (PSAC) feels the CFIB campaign is merely encouraging a divide between public and private sector employees. Patty Ducharme, executive vice-president with the PSAC, says it’s a “cynical campaign, designed for no other reason other than to divide Canadians.”
The PSAC is encouraging its members to post and tweet their comments on the issue on Facebook and Twitter.
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