The federal government’s move to introduce legislation extending pension eligibility to frontline public safety and law enforcement workers after 25 years of service could help manage room for new hires and ensure stable plan maturity, says James Fu, partner and national leader of pensions and benefits law at Borden Ladner Gervais LLP.
Hundreds of frontline workers in Canada — such as firefighters, paramedics, parliamentary protection officers, search and rescue and corrections services employees, who typically face increased physical challenges and risks in their workplace — stand to receive early retirement benefits through the Treasury Board’s proposed ’25 and out’ legislation.
Read: Unions welcoming equitable pension reform for frontline public safety, law enforcement workers
Fu says the proposed change in eligibility would grant the government a certain amount of flexibility in overseeing the public service pension plan. “In many ways, this is an incentive for workers to retire early . . . then you can have a refresh of the new workers. Then you get new individuals . . . and depending on when they join [and] their job titles, they may have different types of benefits as well. At the end of the day it becomes an issue of fiscal prudence.”
Mark Weber, national president of the Customs and Immigration Union, previously told Benefits Canada that having equitable benefits with other law enforcement organizations would help the Canada Border Services Agency with talent attraction and retention issues.
The pension changes would have to be negotiated through amendments to the Public Service Superannuation Act, the Income Tax Act and regulations. Unions representing the impacted workers will still be able to lobby through the process, but, ultimately, there’s no negotiation through bargaining sessions in this case.
Read: PSAC files policy grievance regarding transfer of PSHCP, impacts on plan members
Fu says he doesn’t anticipate that the legislation will get held up in political discussion, despite a looming federal election. Indeed, he believes it may prove challenging for any political party to necessarily come out as fully against the pension policy change.
Still, the feds’ move to provide retirement benefits to public service workers after 25 years of service isn’t consistent with current trends seen in the corporate pension landscape, where the going trend has seen many employees expecting to work well past their initial planned retirement age.
While it’s unlikely the feds’ decision will have an impact across the industry, there’s potential it could play a role in how some employers consider their strategy around encouraging retirement packages for the departing workforce, says Fu.
Read: CBSA, PSAC, CIU agreement includes pension, benefits gains