Canada is moving towards a two-tier retirement system, says Catherine Swift, president of the Canadian Federation of Independent Business(CFIB).
A paper released by the organization, called Canada’s Pension Predicament, says the gap between public and private sector pension plans is widening.
She says: “those of us who work in the private sector will not have the same means to retire as our counterparts in the public sector, and to add insult to injury, we are subsidizing their retirement lifestyles.”
While the private sector has begun moving towards defined contribution(DC)plans, the public sector has stayed with defined benefit(DB)plans.
This, Swift notes, has allowed public sector workers to begin retiring earlier than their counterparts in the private sector.
In 2005, the proportion of early retirees within the public sector was around 56%. In the private sector, it was slightly more than 33% and for self-employed individuals, it was just 20%.
A related story, entitled The pension gap, appeared in the December 2006 issue of Benefits Canada. To read that article, click here. To download a PDF version of Canada’s Pension Predicament from the CFIB website, click here.
To comment on this story email craig.sebastiano@rci.rogers.com.