# How many in this forum have DB Pension?



## piano mom

Just wondering how many of you have DB Pensions? Curious to find out if having a DB Pension will reflect the amount of retirement savings you have.

I clicked the button too fast and omitted to provide an option for DB Pension of $2000 or less.


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## mind_business

Not sure I fully understand your question? Are you asking those with DB Pensions if they save less because they know they'll receive a pension at retirement?

If I retire early at 55 (currently 47), I will receive $4000 per month (not indexed). Our company is converting the DB pension to a DC pension in a couple of years, which is why my DB monthly pension is at $4000. I will be opting to leave the DB amount locked in until 55. At that time I will have to decide whether I take a monthly pension or transfer out the value of the DB Pension. I will also be receiving income from the newer DC pension ... just not exactly sure how much. 

Earlier in my career, it definitely impacted my retirement savings rate ... largely due to complacency knowing I had a pension. In hindsight, that was foolish thinking, forcing my savings rate to be much higher later in my career.


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## piano mom

Mind Business, that's quite a healthy pension you have there - $48k a year. What do you expect your annual expenses in your retirement to be?


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## mind_business

piano mom said:


> Mind Business, that's quite a healthy pension you have there - $48k a year. What do you expect your annual expenses in your retirement to be?


In today's dollars ... around $40,000 ... maybe more if we can afford it. Keep in mind that it's not indexed, so it's impacted by inflation. That's why we need to have supplemental income.


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## Addy

My husband has a DB pension, I have a DC pension. His will be somewhere around $3500/m in todays dollars if he retires at 54, and mine will be a pittance in comparison, estimate less than $500/m, but still happy to have it.


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## fraser

....mind_business : In 2000 my employer announced that the DB plan was closed to new employees and to employees with little service. Their plan was to wind up the DB plan in 2007. Grandfathered employees could take the commuted value and move those monies to the DB, they could freeze the DB at that point and join the DC, or they could remain in the DB plan. 

In 2006 the company announced that they would keep the DB plan going until the end of 2010. Not sure why. I was very happy that I remained in the DB plan until the end of 2010. It worked to my benefit. 

My point is the your employer could change their minds between now and when the DB plan is scheduled to close.


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## mind_business

I hope so fraser. A bunch of at work are hoping for the same, but preparing for the worst case scenario.


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## fraser

Here is a recent article on the economic benefit of DB pensions from HR Reporter:


http://www.hrreporter.com/articlevi...fit-pensions-can-provide-economic-boost-study


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## Karen

I have my own DB pension as a retired federal public servant and I have a small DB pension as my late husband's surviving spouse. Both add up to just under $2000. (Neither of us worked for government long enough to accumulate huge pensions.) But my most recent late husband was an American citizen so I also receive a U.S. social security pension of over $1200 U.S. So my total pension income is plenty to cover my living expenses. I didn't realize, of course, when I was divorced at 40 that I would marry again (twice!) so I started putting the maximum allowable amount into my RRSP every year, and I continued to do that until I retired at age 63. So I'm one of those people who over-prepared for retirement, but that's a nice problem to have!


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## Jon_Snow

I have one, but since I have no intention of working into my 50's (or mid 40's for that matter) it will not reach anywhere close to 4k monthly. It certainly has negatively affected my ability to contribute to my RRSP (thank you, pension adjustment), but it is no big deal. My wife and I are saving 80% of our income right now - of the approximately 12k monthly we are bringing in (both salaries, dividends), we are only spending about $2500. This is what is making our retirement happen, an early one at that. I view the DB pension as a bit of a cherry on top, nothing more. I will likely move the commuted value (180k?) into a self directed LIRA at some point.

My wife who will likely work another 5 to 10 more years, has a nice DC pension going...


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## uptoolate

No DB or DC pension. My wife and I have very small LIRAs which are the result of opting out of a pension plan at our original employer. My contemporaries who remained in the plan have been locked in litigation with the employer for the last 5 or 6 years over money 'missing' from the plan and the ones I know say they are not counting on getting much out of the plan.


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## sags

fraser said:


> Here is a recent article on the economic benefit of DB pensions from HR Reporter:
> 
> 
> http://www.hrreporter.com/articlevi...fit-pensions-can-provide-economic-boost-study


This study is spreading to news organizations over the internet, which I think was the intention of the authors.

It would seem that pension plans are pushing back on some recent articles against DB pensions and expansion of the CPP.

Raising public awareness was mentioned a little while ago by Jim Leech of the Teachers Pension.

It will be interesting to read the articles that criticize the study............as I am sure they are going to appear.


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## Daniel A.

I have a healthy DB plan and am retired, my wife also has a DB plan when she retires in four years.

We both will have maximum CPP on top. 

We never thought a great deal about saving outside but have maximized RRSP's .
Since retiring I've used the RRSP to supplement my pension and draw it down before 65 for tax purposes.


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## Maltese

After 35 years with the Provincial Government my pension will be 35,000 net/year. It is not guaranteed to be indexed to inflation. If any indexing occurs I will receive up to 2/3 of the CPI. The indexing fund is in trouble so all my retirement calculations have been based on having a non-indexed pension. I am on my own so will not be able to benefit from income-splitting. One more year I will hit the 35 year mark.

According to my calculations, CPP & OAS payments will keep my income level at $35,000/year in today's dollars if inflation does not go over 2.5% and my investments earn 3.25%. Thankfully I have been a diligent saver and have no debts.

I have maxed my RSP yearly since I started working at 22 but have never been allowed to put in more than $2300/year. My RSP total is much less than I had anticipated mainly due to the 10 lost years of market returns. $200,000 isn't a lot but much more than the majority of my co-workers will have because they didn't feel it necessary to save due to having a pension. But then, extra savings is not as crucial for them as it will be for me because they will have income-splitting tax benefits as well as two retirement incomes.


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## Spudd

If I stay here till age 60, I'll get just over $3800 a month (indexed) based on my current salary. However, I have NO expectation of staying here that long. I believe I will either quit or be laid off within the next 5 years (am currently age 41). A more realistic estimate is around $1800/mo once I hit age 60 and start collecting. 

If/when I quit or get laid off, I'll have to decide whether to keep it as a DB pension or take the commuted value. I would rather have the pension, but my fear is that the value of the pension won't be indexed through the years between my quit age and age 60, so it will be worth a lot less by the time I actually collect. If it's indeed indexed through the years (which I doubt) then I'll keep it for sure - otherwise I will have to do some thinking.


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## Sampson

Both my wide and I have DB's, mine is a silver-plated public sector pension, hers private (she just recently switched away from a DC plan).

Mine's indexed to inflation, but max payout will require mores years than I'm willing to put in. I'm sure mine would be over $4k-$5k per month, but we shall see how much service I put in. I'm fortunate to be in a plan, but I find the penalties for early retirement quite punitive.

Didn't vote.


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## piano mom

My husband will receive about $30k (indexed) @55 if he quit/laid off by 50. We have $900k saved in registered and cash. We plan to retire @ 50 and fund our $45k epenses via dividends, rental income and some capital withdrawal until 65 - 15 years. After which I don't see us needing any of our savings (or dividend). Our projected networth after 65 just keeps building. 

I started this poll wondering how many of you still save even though you know you will receive big (>$40k) DB indexed pensions. Why? Is it an old habit of saving or??? For us, I think because we were always worried that he might lose his govt job one day and guess what? He did! He was adamant that his govt union job was stable and he was looking at $4600 monthly DB pension @65. I, on the other hand, was a worry wort and insisted that we pay off the mortgage and still save for retirement, just in case. Long story short, he lost his govt job and now lands himself back in again.


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## kcowan

I have an un-indexed DB Pension for $2800/mo. It limited my RRSP contributions to $3500/yr. I always contributed the maximum to the RRSP until very late when I realized that it might not be a good plan.


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## fraser

I have a DB plan in excess of $2K. Private, non indexed. The plan is well funded.

It did not have an impact on our rate of savings.


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## Islenska

No DB here...

Rely on the nest egg and maybe bag a deer this year!


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## Sampson

piano mom said:


> I started this poll wondering how many of you still save even though you know you will receive big (>$40k) DB indexed pensions. Why? Is it an old habit of saving or???


Several factors.
1) Security - never hurts to have too much
2) Financial independence - allow us to explore other goals/career paths without worrying about feeding the kids
3) Old habit - we have to 'learn' how to spend more
4) We have enough to be happy - our monetary requirement to be fulfilled is low, we typically find joy in things that don't cost a whole lot

We should be on our way to Financial independence in our mid 40's, will defer any pension payouts as long as possible to minimize the penalties, and like you, plan to live off 2-3% per annum off investments, off rental income, and from savings.

It is obviously very specific to the individual, but we aren't 'missing out' because we have a high rate of savings.


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## piano mom

kcowan said:


> I always contributed the maximum to the RRSP until very late when I realized that it might not be a good plan.


Can you please explain how so? I mean, isn't it always a good idea to contribute to RRSP when you are in a high tax bracket?


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## fraser

It can sometimes depend on what kind of RRSP you select and your withdrawal strategy.

For example, a capital gain of $100. within an RRSP is taxed as $100. when you withdraw the money from an RRSP.

The same capital gain, outside an RRSP vehicle, is taxed at 50 percent, ie it becomes a $50. taxable capital gain. 

The difference is that you can realize a capital gain within an RRSP and not pay tax on it until you eventually withdraw the funds....but you still pay tax on the entire gain.


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## Daniel A.

piano mom said:


> My husband will receive about $30k (indexed) @55 if he quit/laid off by 50. We have $900k saved in registered and cash. We plan to retire @ 50 and fund our $45k epenses via dividends, rental income and some capital withdrawal until 65 - 15 years. After which I don't see us needing any of our savings (or dividend). Our projected networth after 65 just keeps building.
> 
> I started this poll wondering how many of you still save even though you know you will receive big (>$40k) DB indexed pensions. Why? Is it an old habit of saving or??? For us, I think because we were always worried that he might lose his govt job one day and guess what? He did! He was adamant that his govt union job was stable and he was looking at $4600 monthly DB pension @65. I, on the other hand, was a worry wort and insisted that we pay off the mortgage and still save for retirement, just in case. Long story short, he lost his govt job and now lands himself back in again.



My goal of saving in the RRSP was to be able to retire early.
I was also limited in what I could put into an RRSP with the DB pension rules.
If I had planned to just retire at 65 I would not have bothered with the RRSP due to tax considerations.
Every extra dollar taxed at a higher rate is a big deal.
I was always in a high tax bracket working it really is a treat not to be when retired.


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## piano mom

Yes, I agree with you about withdrawal strategy. I think it's best to contribute to RRSP as long as you're in high tax bracket. Imo, a good strategy is to quit work a few years earlier to allow withdrawal at a low tax bracket (or pay no tax at all) before other incomes (pensions) kick in.


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## Spudd

I save outside my pension for a few reasons. 
1. My company has a benefit where they put aside up to 6% of my salary for me in an RRSP. It builds up over time but I now have enough years of service that it's at 6%. So I get a free 6% of salary saved every year automatically. 
2. My company has a benefit where they match 50% of my contributions to a company stock plan, up to 5% of my salary. So I save an additional 7.5% of my salary using this benefit. 
3. I want to feel comfortable that if I ever got laid off, I'd still be OK. 
4. Recently, I'm disliking my job and wishing to retire early. Thankfully, all my saving has helped make this a more realistic goal.


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## piano mom

Spudd said:


> 4. Recently, I'm disliking my job and wishing to retire early. Thankfully, all my saving has helped make this a more realistic goal.


Good for you!


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## Itchy54

I have a super small pension that I started to collect the day I turned 55, it's a whopping $250/month with the bridge benefit (until I reach 65, then drops to $150). Hubby could take his pension now--has the magic number. If he were to hang up the towel today he would get about $3600/month which includes the bridge benefit and annuity and is 100% joint (as is mine). right now both pensions are indexed, but that can change at any time. At 65 hubby's pension drops to about $2300/month because the temporary annuity and bridge will be gone...although I collect that pension I still work very part time at the university here...a happy and fun job for me!
We have saved about 750,000 and own our home.....no debt. We are both 56
Now I am just waiting for him to decide to just do it!! maybe I can convince him when we go on holidays this December....a month in Mexico could likely make that happen!!.


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## My Own Advisor

Sounds awesome Itchy54, "...we have saved about 750,000 and own our home.....no debt."

And pensions, sounds like you are set!

Keep convincing him!


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## sags

Gosh....I hope I don't have to read anymore news articles about the piddly 2000 a month GM lifetime pension being "gold plated".

It pales in comparison to many. Mine does include a health care plan, life insurance, and some long term care benefits, so it helps.

My wife's "gold plated" HOOPP benefits are a whopping $750 a month for 18 years of service.

Not complaining though.....everything adds up to about $60,000 a year income......which is about twice as much as my son earns working hard every day.


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## piano mom

sags said:


> Gosh....I hope I don't have to read anymore news articles about the piddly 2000 a month GM lifetime pension being "gold plated".
> 
> It pales in comparison to many.
> 
> My wife's "gold plated" HOOPP benefits are a whopping $750 a month for 18 years of service.
> 
> Not complaining though.....everything adds up to about $60,000 a year income......which is about twice as much as my son earns working hard every day.



It is definitely nice to retire with a good pension. 

@Itchy54: how is it that an indexed pension can be changed to not indexed? "right now both pensions are indexed, but that can change at any time"


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## Itchy54

BC government....they review it every year. They recently took away the medical benefits...it would not surprise me if the indexing came to an end. Every time hubby and I go to a retirement seminar they sort of highlight the fact it may not always be there.
That would suck be we are prepared.


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## piano mom

Huh, didn't know that. Will get hubby to look into his. Thanks for the heads up.


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## fraser

My employer also cut our full medical/dental/health benefits. Depending on age and service you either got to keep them, moved to catastrophic plan that pays a maximum of $700 single, $1400. married per year plus for any medical/dental plus 100 percent of everything over $3000. of out of pocket medical only. 

I am told that this is a fairly common trend. They also significantly reduced benefits to current employees over a number of years.


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## sags

My GM pension had the indexing suspended until 2016 and increased the cost we pay for health care.

My wife gets partial indexing on her HOOPP plan.

One of the benefits of integration with CPP and OAS.........is that they are both indexed.

So......we get less from our private pensions, but more from the government........which is indexed.

There is also another benefit when people turn 65...........the age tax credit for each.

And of course.........there are the "senior" discounts.

I read one time that a job gives you one income from one source..........while a retirement income consists of pieces here and there.

Seems true to me.


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## Jon_Snow

My DB pension would be in the 4k range if I worked to "normal" retirement age. I have absolutely no problem leaving that kind of money on the table to retire at a time of my own choosing. I suppose for people who can't save and don't mind working the majority of their lives, it's a great thing to have.


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## piano mom

sags said:


> My GM pension had the indexing suspended until 2016 and increased the cost we pay for health care.
> 
> My wife gets partial indexing on her HOOPP plan.
> 
> One of the benefits of integration with CPP and OAS.........is that they are both indexed.
> 
> So......we get less from our private pensions, but more from the government........which is indexed.
> 
> There is also another benefit when people turn 65...........the age tax credit for each.
> 
> And of course.........there are the "senior" discounts.
> 
> I read one time that a job gives you one income from one source..........while a retirement income consists of pieces here and there.
> 
> Seems true to me.


We are truly blessed living in Canada. I know I am - having immigrated from South East Asia some 22 years ago.


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## nortel'd

I was planning to retire the end of Jan 2014 but in early May I decided differently. In just 3 days I will be retiring with an unreduced 30 year DB pension. The plan is actuarially sound and only 50% of the life-time portion and bridge benefit are indexed at 75% of CPI. 50% is better that a kick in the butt with a frozen boot. :tickled_pink:


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## GoldStone

Pension statistics is readily available from StatsCanada. 

Public sector: 80% of workers have a workplace retirement plan. In the vast majority of cases, it's a DB plan.

Private sector: only 25% of workers have a workplace retirement plan of any kind. In the vast majority of cases, it's *not* a DB plan.

Canada is a class society, not unlike the Good Ole Britain.

The Upper Class: those with a good DB pension - mostly public sector workers.

The Lower Class: those without a DB pension - the vast majority of private sector workers.


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## Four Pillars

GoldStone said:


> Canada is a class society, not unlike the Good Ole Britain.
> 
> The Upper Class: those with a good DB pension - mostly public sector workers.
> 
> The Lower Class: those without a DB pension - the vast majority of private sector workers.


This is nonsense. Income determines 'class' if you want to sort people that way. I'd rather make $150k with no pension (DB or otherwise) than make $80k with a gold-plated gov't pension.


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## fraser

I was a civil servant at one point in my career.

I left and went into the private sector because the total compensation package in the private sector was much more lucrative given my skills.

The comment about DB pensions and a class society is utter nonsense. Sounds like something from the Marxist Leninist Party (if it still exists).


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## GoldStone

Four Pillars said:


> This is nonsense. Income determines 'class' if you want to sort people that way. I'd rather make $150k with no pension (DB or otherwise) than make $80k with a gold-plated gov't pension.


Many rank and file positions pay better in the public sector. It used to be that gold plated pension was a compensation for lower pay. The pay disparity has long disappeared.

Take a look at Ontario sunshine list. Thousands upon thousands of non-managerial employees clear 100K.


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## HaroldCrump

GoldStone said:


> Take a look at Ontario sunshine list. Thousands upon thousands of non-managerial employees clear 100K.


The Ontario Sunshine list is an obnoxious, vile testament to the income inequality between the public sector "haves" and the private sector "have-nots".
It is a slap-on-the-face of average private sector non pensioned Canadian workers.

Also, the salaries listed on the Sunshine list are base salaries, not including monetized values of premium benefits, generous time-offs, sick days, etc.
And of course the elephant in the room - the pensions - whose lifetime values exceed base salaries.


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## piano mom

nortel'd said:


> I was planning to retire the end of Jan 2014 but in early May I decided differently. In just 3 days I will be retiring with an unreduced 30 year DB pension. The plan is actuarially sound and only 50% of the life-time portion and bridge benefit are indexed at 75% of CPI. 50% is better that a kick in the butt with a frozen boot. :tickled_pink:


Very nice!!! Congratulations on your retirement Nortel'd!! Are you going to celebrate on Halloween night?


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## GoldStone

fraser said:


> I left and went into the private sector because the total compensation package in the private sector was much more lucrative given my skills.


Private sector pays better at the upper professional and executive levels. So what? That's not where most of the jobs are. At the rank and file level, pay disparity is a thing of the past. Public sector offers a comparable or better pay, and a much better pension.


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## Four Pillars

GoldStone said:


> Many rank and file positions pay better in the public sector. It used to be that gold plated pension was a compensation for lower pay. The pay disparity has long disappeared.
> 
> Take a look at Ontario sunshine list. Thousands upon thousands of non-managerial employees clear 100K.


Not sure how this answers my post.

Your previous post says that anyone without a DB pension is 'lower class'. If I'm making $150k without a DB pension, then I'm fine with that label.


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## GoldStone

Four Pillars said:


> Your previous post says that anyone without a DB pension is 'lower class'. If I'm making $150k without a DB pension, then I'm fine with that label.


Fair enough. Let's revise the class system.

Platinum class: well-off folks who don't need no stinking DB pension. Four Pillars, welcome! 

Golden class: regular folks with DB pension.

Bronze class: regular folks without DB pension.

Better?


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## sags

It is a sad truth that too many Canadians have no pension plan.........not sure if 75% is an accurate number though.

Even more compelling..........is that 50% of retirees with no pension plan are collecting GIS.

Even if asset "millionaires" collecting GIS are discounted............that is still too many people barely getting by.

That is why I fully support an expanded CPP..............even though we would never benefit from it.

Heck.......temporarily raise the GST 2% to build up the fund............I am willing to help pay for something like that.


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## nortel'd

piano mom said:


> Very nice!!! Congratulations on your retirement Nortel'd!!


Thanks. Loved my job and enjoyed working with all my colleagues including management. 



piano mom said:


> Are you going to celebrate on Halloween night?


 My 3 cats and I will be headed for Florida in the cat mobile (a fully loaded 2011 Suburban LT I bought brand new as a pre-retirement gift to self). The only things missing are the black hat and broom. :smiley_simmons:


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## Four Pillars

GoldStone said:


> Fair enough. Let's revise the class system.
> 
> Platinum class: well-off folks who don't need no stinking DB pension. Four Pillars, welcome!
> 
> Golden class: regular folks with DB pension.
> 
> Bronze class: regular folks without DB pension.
> 
> Better?


Yes, that about covers it. Thanks!


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## HaroldCrump

sags said:


> Heck.......temporarily raise the GST 2% to build up the fund


oh great...raise taxes to help people save for retirement.
Innit that just wonderful !

How about...we stop the outrageous handouts to public sector unions, above inflation guaranteed pay raises, asinine vacation and sick leave policies, etc. and re-direct those monies towards building CPP or whatever socialized pension fund you desire.

...and _then_ cut the GST by another 2%.


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## pwm

*How about...we stop the outrageous handouts to public sector unions*

I second that motion. In fact, how can we even justify having public sector unions in the first place? How can we countenance public servants striking for higher pay and benefits when they are paid by taxpayers and are part of government monopolies? When a private sector union closes the plant because of outrageous demands, then the workers suffer the consequences. Governments will always cave in to the union because the public purse is bottomless!


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## AlbertaBoy

My company does a DC/DB mix. The first 10 years of service (if under 50 years of age/mix of service + age under 50) is DC. Following that we are moved into a DB pension. Company continues to put in 4% to our DC during the time we are in the DB. The DB will be just under 4K monthly if I retire at 55 (30 now), more if I want to work to 60.

AB


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## birdman

Small DB plan at 2400 PM indexed to .50% of inflation. This, along with 55,000. PA SERP til age 71 looks after my wife and I fine and allowed me to retire at 56. We both get OAP and I took early CPP. No need to touch our maxed out RSP's and other investments until age 72 and then not much.
What really bothers me are people in their mid life buying new cars, motorhomes, going on lavish vacations, and generally spending like crazy and then crying "poor" over the size of the OAP and supplements after they retire. I'm of the old school, paid off our house by the time we were 30 and spent our time with the children and with friends as opposed to buying the latest TV, car, etc.


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## fraser

I view a DB benefit as just another component in someone's total compensation package. The annual value is easily calculated. It is no different than the other components such as salary, medical/health benefits, DC plan, stock purchase plan, bonus, stock options, education assistance for employees, what have you. 

Two people can have the identical compensation packages-one with a DB and one without. One gets an extra 5-12 percent extra in take home pay, the other has the DB.

A key issue is the fact that some people will save, others spend every dime and more that they get. Our consumer debt levels are the proof of this.

DB plans are great, they force people to prepare for retirement. But DB plans really only work effectively when the employee has long service. The reality is that workers today, in many cases, will not longer get the tenure that they once had. Our children will probably have several, perhaps many, employers in their work lives. Just as what they do will change over time. 

This trend to job mobility means that DB plans will become less and less effective for those employees. IF you are not certain, just ask how much a 35 year old gets in commuted value from a DB plan when he/she changes employment. If you ask that person, they would have much preferred to be in a DC plan because they would walk away with the entire value. Very few DB plans in the private sector are portable. 

So, while I agree that DB plans are very good, that they reduce the burden on the state, private DB plans going forward may not be the complete answer for a more mobile workforce.


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## HaroldCrump

^ which is why a universal, portable DB plan like CPP makes sense.
Not these gazillion public sector DB plan growing like weeds and sucking our federal and provincial budgets.
We have DB plans coming out of the ears of all three levels of govt.

Total compensation is another major issue, of course.


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## Beaver101

HaroldCrump said:


> oh great...raise taxes to help people save for retirement.
> Innit that just wonderful !
> 
> *How about...we stop the outrageous handouts to public sector unions, above inflation guaranteed pay raises, asinine vacation and sick leave policies, etc. and re-direct those monies towards building CPP or whatever socialized pension fund you desire.
> 
> ...and then cut the GST by another 2%*.


 ... +1 :encouragement: you got my vote on these solutions!


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## piano mom

frase said:


> Small DB plan at 2400 PM indexed to .50% of inflation. This, along with 55,000. PA SERP til age 71 looks after my wife and I fine and allowed me to retire at 56. We both get OAP and I took early CPP. No need to touch our maxed out RSP's and other investments until age 72 and then not much.
> What really bothers me are people in their mid life buying new cars, motorhomes, going on lavish vacations, and generally spending like crazy and then crying "poor" over the size of the OAP and supplements after they retire. I'm of the old school, paid off our house by the time we were 30 and spent our time with the children and with friends as opposed to buying the latest TV, car, etc.


My husband and I very much share your opinion. We have in-laws that keep buying toys and cry "poor us" at the same time. Go figure.


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## marina628

I think I will get $11 a month from a previous job when I turn 65  My husband and his brothers ran HVAC biz for 28 year+ and even when it was just the 4 of them they would invest $300 a month each into their RSP off their pay and business would match it.When the company grew they did a $50 a week match for all employees from the business and still do it today.They only have 40 employees but in most cases without this incentive program at work probably 90% of them would not be investing ,the other 10% invest more off their pay each week.I personally have no issues with a company matching the employee contributions in a pension plan and not everyone getting a pension is getting rich on it.There are probably some though that needs a reality check.


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## My Own Advisor

Seems like good values to me piano mom.

Wife and I have pension plans, I'm DB, she is DC. We'll need more than that to retire comfortably, and a paid off home of course as well.

With your maxed out RRSPs and "small" pension of $2,400 per month, and home ownership, seems you are set. Well done.

I hope I can be as fortunate and disciplined.


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## Ihatetaxes

No DB or DC pensions in our house. Just high self-made incomes and a plan to retire in our mid 50's with $120k (todays $) indexed after tax combined income.

Father-in-law though is set to retire with a fat hydro pension next year. >$6500/month indexed, health, drug and dental benefits for life.


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## donald

Private sector,no pension of any sort,though i do plan to have my company still running by the time i step away and i do believe it is likely i will still be a shareholder and have the company pay me a lifetime amt(would still control it but be out of the day to day activity)@least this is what i hope for.Doubt i could sell out but many companies do(still in mom/pop stage-about 500k gross revenue,but who knows what/where my company could be in 20's years.
I know a few guys who have even sold out locally and made a tidy sum and rolled into investments.


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## GoldStone

Ihatetaxes said:


> No DB or DC pensions in our house.


DC pension is such a misnomer. I prefer to call it DC plan. It's just a group RRSP under another name (with a few minor caveats). It doesn't guarantee a lifetime income, unlike a true pension.


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## MoneyGal

(My thoughts on that matter from a few years ago: http://www.thestar.com/opinion/2010...t_a_pension_well_youd_better_think_again.html )


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## My Own Advisor

Good article. I like the core discussion points at the end.


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## Daniel A.

Nice post MoneyGal

I wondered from reading the response on this thread how many have a true DB pensions.

I believe from reading other books that there are only four types or variations of DB pensions.

I also believe that anyone who has one and are a long way from collecting should realize that much can change.
I can think of a couple of times before retirement that I was concerned about my pension.

Something such as the sale of a company can crush a DB pension or not getting in the years needed.


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## fraser

Very true. I took a long, hard look at my private DB plan prior to making the selection between taking the annuity or the commuted value. Fortunately it is a small plan in terms of members and assets, extremely well funded, and now closed. I had no choice on the SERP, had to take it in three payments over three years but I am OK with that. The SERP component carries a higher risk by it's very nature. 

I sometimes wonder about pooled DB plans and whether they inherently carry more risk than a single employer DB plan.


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## GoldStone

fraser said:


> I view a DB benefit as just another component in someone's total compensation package. The annual value is easily calculated. It is no different than the other components such as salary, medical/health benefits, DC plan, stock purchase plan, bonus, stock options, education assistance for employees, what have you.
> 
> *Two people can have the identical compensation packages-one with a DB and one without. One gets an extra 5-12 percent extra in take home pay, the other has the DB.*


It's not a fair tradeoff. 12% extra in take home pay is not enough to replace a good public DB pension. Never mind 5% extra pay.

I will use constant dollars and real rate of return to take inflation out of calculations.

*Mary* joins public service at the age of 25.
She earns $60,000 in constant dollars.
She retires after 30 years of service at the age of 55.
Her DB pension is worth: $60,000 * 30 * 2% = *$36,000*/year

*Jane* joins private sector at the age of 25.
She earns $60,000 in constant dollars, plus a take-home bonus of 12% ($7,200K/year or $600/month).
She invests the bonus in an RRSP at 6% real rate of return.
She retires after 30 years of service at the age of 55.
Her RRSP is worth 600K at retirement.
Assuming 3% safe withdrawal rate, Jane can withdraw 600K * 3% = *$18,000*/year

Jane earned 12% more. She saved diligently. She invested wisely. Yet her retirement income will be half of Mary's.

(we've been through this exercise before)


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## fraser

You missed the point entirely. I used 5-12 percent as an example. It could be 30 percent. 

The point is that DB is one component of total compensation. And it was not meant to be purely a comparison of public sector pensions or a criticism of public sector pensions. It was meant as a comparison of all jobs-public, private, or non profits.

So perhaps the person who does not have a DB is taking home an extra 25 percent...it really depends on the plan. You need actual numbers, not numbers devised to meet the outcome that you desire.

Your numbers bear absolutely NO relationship with how these numbers are actually determined. Simple math will not work. And who is to say that Jane is not paid 70K, gets higher, sometimes lower bonus, plus stock, plus stock options, and perhaps a car.


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## MoneyGal

While I take your point, Fraser, I also think it is important to point out that *every* public sector worker gets a pension - even "Jane" at $60K or "Bob" at $36K. 

But cars, stock options, and bonuses are generally reserved for management positions in the private sector. 

Most private sector workers don't even get RRSP matching. 

The response that private sector compensation *can* include perks like stock options must be weighed against the reality that the vast, vast, vast majority of private sector jobs come with no or very limited benefits.


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## GoldStone

fraser said:


> You missed the point entirely. I used 5-12 percent as an example. It could be 30 percent.


I get the point about the total compensation. It's not rocket surgery.

*You* are throwing numbers around without any serious consideration. I showed that 5-12% extra pay is not good enough. Now you say it could be 30%? Why not 100%?

I pointed out upthread that rank-and-file public sector jobs pay *better* than similar jobs in the private sector. That's just the base salary - before we get into the pensions discussion. You missed that point.

You keep saying that private sector jobs *can* offer a better total compensation. Yes they can and yes they do: at the upper professional and executive levels. But not at the lower levels where most of the jobs are.


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## Spudd

MoneyGal said:


> While I take your point, Fraser, I also think it is important to point out that *every* public sector worker gets a pension - even "Jane" at $60K or "Bob" at $36K.


While I agree with the general gist of your post, not every public sector worker gets a DB pension. My dad is a university professor and he only has a DC plan, no DB.


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## kcowan

piano mom said:


> Can you please explain how so? I mean, isn't it always a good idea to contribute to RRSP when you are in a high tax bracket?


When I was given a golden handshake, I continued consulting for another ten years. During that period, there were years when taxable income was low. Plus I was focused on working, not investing, so most of the RRSP money was in high MER funds and not netting great returns. I still have 16,500 in unused room.


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## MoneyGal

Spudd said:


> While I agree with the general gist of your post, not every public sector worker gets a DB pension. My dad is a university professor and he only has a DC plan, no DB.


I should have said everyone whose paycheque is signed by the Queen or the Queen in right of a province.


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## CanadianCapitalist

One point that is almost always missed in these discussions is that PS employees partly pay for their pensions. If you work in the Federal public service, you'll be contributing 6.8 percent extra (over and above CPP contributions) for upto YMPE and 9.2 percent pay exceeding YMPE this year. To make a fair comparison, you should assume that Jane made the same contributions to her retirement account. You should also account for the fact that Jane will start collecting CPP at age 65.


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## HaroldCrump

GoldStone said:


> *Mary* joins public service at the age of 25.
> She earns $60,000 in constant dollars.


GoldStone, reality is even more favorable for public service.
_They_ are the ones getting above inflation raises.
Almost all union contracts have generous above-CPI raises built into them, regardless of employee performance, govt's budget situation, GDP growth rate, etc.

Mary is not going to make $60K for 30 years.

Also, her final pension will be based on the 3 or 5 _best_ years salary, and not a lifetime average.


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## fraser

My sister, a school board employee, was paying 12 percent for her DB pension prior to retiring and she pays towards her retiree medical/dental plan.


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## Four Pillars

Spudd said:


> While I agree with the general gist of your post, not every public sector worker gets a DB pension. My dad is a university professor and he only has a DC plan, no DB.


I don't think universities are public sector.


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## birdman

My son works at a university in a management position and pays 13% of his salary towards a DB plan.


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## Sampson

Four Pillars said:


> I don't think universities are public sector.


Sure they are. Where does the money come from to operate them? And no, tuition is not the answer.


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## Four Pillars

Sampson said:


> Sure they are. Where does the money come from to operate them? And no, tuition is not the answer.


The money comes from the government and tuition. 

I actually don't know the answer to this, but I just don't think that a stand-alone institution that is not 100% publicly funded can be considered public sector. Of course, it's not exactly private either.

Let's see what Google says:

http://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=1713&Item_Id=134219&lang=en

_The objective of this program is to provide data on employment (number of employees, wages and salaries) in the public sector, i.e. the federal, provincial, territorial and local general governments, health and social service institutions, *universities*, colleges, vocational and trade institutions, school boards, and government business enterprises. _

F***! I'm wrong again...


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## MoneyGal

Which is why I changed my response to "those whose paycheques are signed by the Queen / the Queen in right of a province/territory." :chuncky:


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## sags

There will be repercussions, if the government doesn't act to expand the CPP.

This is a quote for an article in the Huffington Post today.

_The alternative to improving the CPP is for Canadian government to use the Guaranteed Income Supplement (GIS) to continue subsidizing businesses that don't offer pension plans to their employees. If we do nothing to improve pensions now, the GIS tab to taxpayers will grow *from $9.9 billion today to $22 billion by 2030 and $31 billion by 2040. *_

http://www.huffingtonpost.ca/ken-georgetti/canada-pension-plan_b_4175181.html

A debate over public pensions doesn't address the concerns of those who don't have a pension at all.


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## HaroldCrump

GIS is not subsidizing businesses.
It is the tax payers that are subsidizing the rich DB plans of the public sector.

It is a transfer of wealth from non pensioned private sector tax payers to richly pensioned unionized public sector employees.

If there is to be a re-distribution of income & taxes, it should be towards reducing the features of PS DB plans, followed by personal income tax cuts, concomitant with an increase in TFSA room and/or increase in mandatory CPP contributions and benefits (phased in over a period of time, of course).

If the govt. is deemed to have the right to force private businesses to offer DB pension plans, well then, 80% of tax payers also ought to have the same power to force the govt. to slash the features of public sector pension plans (incl. MP and Senate plans, all of which are completely unfunded).


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## sags

GIS is subsidizing businesses who don't provide retirement income for their own workers.

Lost in all these discussions, is the revenue that public service employees bring in to government revenues.

How much revenue is brought in through CRA workers and auditors?.........as one example.

How much revenue does Alberta receive from oil leases.........drawn up by public servant lawyers and collected by public servants?

The idea that "taxpayers" are solely the ones who pay public service compensation........isn't true.

Public servants are actually the ones who bring into the government ALL the revenue that goes to pay for ALL the programs.


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## HaroldCrump

sags said:


> GIS is subsidizing businesses who don't provide retirement income for their own workers.


A business is required to pay labor (workers) a fair and competitive wage.
Why should an employer be directly responsible for an employee's retirement plan?
What else should a business be responsible for? Providing housing, groceries, beer, and what else?



> Lost in all these discussions, is the revenue that public service employees bring in to government revenues.


You mean the income taxes they pay?
In that, they ought to be no different than any other type of workers.
They should receive a fair and competitive wage, and pay the stipulated income tax, just like everyone else.

But right now, the govt. employees do not receive a fair and competitive wage - they receive far in excess of that.



> How much revenue is brought in through CRA workers and auditors?.........as one example.


The fact that CRA is the revenue collection arm is immaterial.
It is just another job.



> How much revenue does Alberta receive from oil leases.........drawn up by public servant lawyers and collected by public servants?


Those natural resources belong to the people of Alberta and/or all the residents of Canada (depending on how the treaties are set up).
The fact that public servants collect the revenues and do the accounting for it is immaterial



> Public servants are actually the ones who bring into the government ALL the revenue that goes to pay for ALL the programs.


 Ha Ha :biggrin:


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## andrewf

Just chiming in to say Harold is 100% right on this.

Business do not and ought not to have any responsibility for retirement savings (or as in the US health care debate, health insurance) for their workers. Their responsibility to pay competitive compensation and treat employees well (ie, comply with relevant labour laws and otherwise treat them with respect). This is a really pernicious concept which doesn't really hold. The role of business is to provide goods and services to maximize profit through legal means. The role of business is not to provide welfare. That is the purpose of the state. Governments are not subsidizing business by providing welfare, unless that welfare is tied to specific activity, ie welfare contingent on working.

I don't agree that government workers do not create any wealth (this is a bit of a silly argument as soon as you scratch at it a bit). Does a public worker who builds a bridge produce less wealth than a private worker that does the same? The problem arises from the fact that the government has a monopoly on the provision of many services. And once you give a labour union a monopoly on the provision of those services, they can extract unearned rents which are essentially a tax on the rest of society. Monopolies are usually best avoided by sometimes are necessary, especially to provide public goods like national defense or policing. When such monopolies are necessary, it is important for social equity that the prices charged by that monopoly are fair/reasonable. The prices in this case being in large part the compensation for public employees.

Many people argue that government should provide people with high paying jobs (ie, above market compensation). This conflates the two roles of government spending: (1) to provide welfare in cash and in kind (public education services) to increase social equity/reduce income inequality and (2) to provide goods and services at a reasonably low cost. Overpaying middle class and upper middle class workers tries to accomplish 1 by failing to accomplish 2. It's also very inefficient, because the people who most need and would benefit from wealth transfer are precisely those who do not work for the government.


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## pwm

_Public servants are actually the ones who bring into the government ALL the revenue that goes to pay for ALL the programs._

That's got to be the most absurd statement I've ever heard! It's the private sector that creates wealth. Governments just take a cut and spread it around.


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## sags

I think there is a misunderstanding of the basic tenants and relationship between any business and their employees.

A company offers "their" compensation package (inclusive of wages and benefits) to purchase an employee's time, education, experience, and best effort.

Employers are not forced to hire employees and employees are not forced to work for a particular company.

One employer may require a desired level of education, or that an employee is willing to work rotating 3 shifts, or a continental work week schedule and Statutory Holidays (nurses for example), or there may be a level of risk of personal harm or injury (police officer for example), or any number of other considerations.

The argument being often put forth is that the employer (governments, hospitals, police services) have weighed all their requirements, set their compensation levels accordingly, but have somehow miscalculated the value of their employees to the business.

The same argument could be made for any profession or employment agreement between any employer and employee.

Are engineers overpaid? Who is to determine that.........beyond the employer and employee?

Always a consideration for any business, is do they earn revenue from the labor put forth by each of their employees.

Hence my statement that CRA auditors bring in more revenue dollars than they cost in benefits. Police officers bring in revenue to the government from fines. Nurses bring in revenue for their employer from payments for the health services they provide.

It is projected in this debate.......as if the government pays all these levels of civil servants and gets nothing in return.


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## Addy

My hubby's pension is from his service with the Canadian Forces, and I've never been one to consider anything "100% guaranteed"... I've been reading up on the chance of a pension such as this ever "going under" and it appears possible, probably very slim mind you.

This is a US site, but I'm still curious, what are others opinions on the chance of a federal gov't employees pension plan not being able to fulfil their obligations?

http://www.investopedia.com/articles/retirement/08/safe-db-plan.asp

"DB pension plans in the U.S. are not in sound financial shape, and some of these plans will not be able to fulfill promised benefits to retiring workers."


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## HaroldCrump

sags, the model for determining compensation of govt. employees (rather, public sector as a whole incl. hydro, crown corps., agencies, etc.) is badly broken.
In fact, there is no "model" to speak of.

The mechanism for determining compensation currently in place is as follows > union contract comes up for renewal > PS unions kick and scream, threaten to strike, hold the entire province/country to ransom, and basically behave like 5 yr. old kids.
Govt. makes a pretense of "negotiating" but eventually give in to most/all of the demands of the unions.

Over time, the demands of the unions have gotten more and more egregious.

It is no longer about base salaries, workplace safety, and other core labor requirements - we now have completely outrageous features in union contracts such as several weeks of paid time off, even more weeks of "sick" time, "WLB" time off days, lower weekly working hours, etc.
Overly generous pensions are also part of the same egregious demands.

No one is saying that public service workers bring no value, but what we have now - holding the tax-payers to ransom like the good ol' wild west cowboys - is ridiculous.


----------



## sags

Addy said:


> My hubby's pension is from his service with the Canadian Forces, and I've never been one to consider anything "100% guaranteed"... I've been reading up on the chance of a pension such as this ever "going under" and it appears possible, probably very slim mind you.
> 
> This is a US site, but I'm still curious, what are others opinions on the chance of a federal gov't employees pension plan not being able to fulfil their obligations?
> 
> http://www.investopedia.com/articles/retirement/08/safe-db-plan.asp
> 
> "DB pension plans in the U.S. are not in sound financial shape, and some of these plans will not be able to fulfill promised benefits to retiring workers."


There are myths perpetrated by those opposed to DB pensions, that a pension can simply default on it's obligation to it's members.

That is simply not true.

Government legislation dictates that pension funds are kept separately from company funds. It also dictates that pensions that are "underfunded" are the financial responsibility of the sponsor of the plan. 

All pension benefits earned through past service are guaranteed. Changes to a pension plan only affect the benefits for future members.

Hence the term "vested" pension benefits.

The only way a pension can be wound up........is if all underfunding is made current. The sponsor would have to pay the difference.

The only way a pension can be terminated or benefits lowered for past service employees is through a bankruptcy of the sponsor.

Your husbands pension is guaranteed by the government of Canada, and there is NO chance Canada is going to declare bankruptcy.


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## sags

Further Addy........

You will notice that the pensions often quoted as having had problems and benefits reduced in the past.........where companies like Nortel and GM.

Both of those companies entered bankruptcy.......and that is when the "underfunded" portion of their pension plans became an issue.

In the case of GM, the Ontario Government originally stated they wouldn't "bail out" the pension plan, but once they were reminded that GM had paid premiums into the Ontario Pension Guarantee Fund for decades, as mandated by law, and the pensioners would be entitled to claim benefits from the fund, they changed their mind and provided a portion of the underfunded capital.

In the case of Nortel, the workers were more widely spread across Canada, and the Ontario Government didn't have the same level of liability, so the retirees were forced to accept a reduction in their benefits.

There was also no chance of the government exchanging loans for shares with Nortel, as was done to keep GM in business.

As I posted earlier, unless Canada goes bankrupt........your husband's pension is guaranteed.


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## sags

Your argument Harold, is the employer was weak and couldn't resist strong arm tactics of their employees.

Perhaps in some instances, but there are lots of examples that demonstrate the employer put forth the compensation to attract the employees they needed.

The example of nurses comes to mind.

Years ago, there was a severe shortage of nurses in Canada. Many graduating nurses were being lured to the US by recruiters, who offered high pay and benefits.

To compete, hospitals were forced to raise their compensation levels and change some of their demanding scheduling routines.

Another example is the OPP. What should the compensation level be to someone alone who has to approach unknown people in a vehicle in the dark? How much of their compensation is due to the inherent risk of the job.

How much should corrections officers in prisons be paid? They are subject to physical attacks and some have been killed by inmates.

A television show today, was the CEO of Toronto Transit Commission, went undercover to discover what all the "well paid" TTC workers did for a living. She had her eyes opened. They work a lot harder than she thought, had higher stress levels than she would have imagined and were doing an overall stellar job. 

It is not different than the private sector, where companies such as miners pay high salaries due to the work conditions and risk involved.

The only way to establish a "fair and equitable" wage and benefits in the public sector would be to compare on a job by job basis with similar jobs in the private sector.

I doubt any government is going to undertake that task. It is simply too onerous and subject to interpretation.


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## piano mom

Well, looks like quite a few of us on this forum have a DB Pension. I strongly believe that most of us also saved/ are saving regardless. I found this article which I think is our main reason for saving. My husband has 2 DB pensions - private and public. Unfortunately, his private DB plan will provide 80% of his pension income. If the plan continues to thrive, we won't need much of our own savings and our 2 lucky daughters will inherit big time when we leave.

http://business.financialpost.com/2...n-you-should-still-save-a-little-on-the-side/


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## Islenska

In my small world of retail pharmacy we have gov't auditors come around every 2-3 years..They always take a hefty clawback, sometimes for the tiniest accounting discrepancy. We have just come to expect these robbers (auditors) are filling their quota, in effect paying for their visit and extrapolate that down the line to their juicy salaries, pensions etc...

You have seen the headlines "Saving Healthcare Dollars", much baloney, simply a ballooning level of gov't employees-----saving their jobs, so don't pity or protect this crew, they are picking your pocket!


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## fraser

We travel quite a bit, often to less popular places.

No matter where we travel, we are always glad to get back to Canada. We have so much in Canada that we take for granted....including the pleasure of voting freely in elections. 

We are in the minority among the nations of the world-both in terms of freedom, wealth, and health. When we look at our standard of living in Canada it makes us feel very privileged to live here. 

The DB pension issues and pubic service compensation issues will go on and on and on. But the bottom line is that if you do not take care of your financial resources, no one else will. The Government cannot do it all. At some point we have to accept a little responsibility for our own financial well being. Another choice that we all have.


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## piano mom

+1


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## HaroldCrump

sags said:


> Another example is the OPP. What should the compensation level be to someone alone who has to approach unknown people in a vehicle in the dark? How much of their compensation is due to the inherent risk of the job.
> 
> How much should corrections officers in prisons be paid?


Your example of OPP is perfect to illustrate just how egregious unionized public sector compensation is.

It is ludicrous that Ontario OPP is amongst the _highest_ paid police services in the entire North America.
Not just at the higher levels, but right across the board.

Rank-for-rank OPP employees make far more than LAPD, NYPD, and CPD.

http://www.680news.com/2013/08/15/secret-it-out-macleans-cover-story-exposes-canadians-salaries/

_Kirby said he was shocked to learn how much police chiefs in Canada make.

"We look at police chiefs in Toronto, Vancouver and Winnipeg, and compare them to their counterparts in Chicago, Portland and Memphis, and it’s almost two to three times the salaries chiefs up here get versus in the States," he said._

Police budgets right across the country are bankrupting towns, municipalities, and entire provinces (such as Ontario).

Police departments have become the new mafia - the new robber barons - appropriating egregious rents from tax payers in order to preserve their cushy jobs and outrageous benefits.

They are crushing the knees of municipal and provincial budgets.

http://www.cbc.ca/news/canada/sudbury/northern-ont-mayors-alarmed-by-opp-bills-1.1216365

_Northern Ont. mayors alarmed by OPP bills
Cochrane mayor says town will stop paying bills if policing costs continue to escalate

A growing number of northern mayors say skyrocketing OPP costs are going to drive their towns into bankruptcy.
And one is threatening to stop paying, if the provincial police don't drop their prices._

http://www.winnipegfreepress.com/local/police-fire-budgets-raise-alarm-220624691.html

_Police, fire budgets raise alarm
Spending on two departments forcing cuts elsewhere: Wyatt

The police and fire budgets are out of control and forcing cuts to other departments, city council's finance chairman warns.

Coun. Russ Wyatt (Transcona) said annual spending increases devoted to the Winnipeg Police Service and the Fire Paramedic Service have reached untenable levels, adding most of those costs are the result of generous wage settlements._

It is ludicrous to an extreme that here in sleepy ol' small towns of Canada (some with populations of less than 100,000), we are having to pay through our noses for police services.
Even for larger cities like Toronto, Vancouver etc. it is laughable to observe that rank-for-rank our police department employees need to be paid several times more than the employees of some of the most dangerous crime cities on the continent such as LA, NY, and Chicago.


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## sags

Mayors and council members in muncipalities are complaining about the cost of police service contracts?

That is rich...........considering they are the ones who negotiated those contracts.

That is like a parent complaining their adult kids are draining them dry.


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## fraser

I think that it is very easy to make sweeping generalisations about public sector vs private sector, pension, total compensation, etc. etc. when you are not in possession of all or any of the facts or actual comparators. More often than not, articles in the media deal in poorly researched or carefully presented facts designed to create a headline.

Firms in private industry often engage consultants such as Mercer or Watson to do just that to ensure that they are paying competitively from a salary and benefits perspective. There are lots of variables and no doubt the comparisons would vary with the job and with the particular public service employer.

There are is no doubt that there are some overpaid public servants. But I also think there are many hard working people in the public services who earn every dime of the salaries day in and day out.


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## HaroldCrump

sags said:


> That is rich...........considering they are the ones who negotiated those contracts.


In many cases, mayors and councilors don't have any control over the contracts, such as the OPP ones.
For other police departments, it is the same problem as other monopolistic unions such as hydro, teachers, etc.
There is no competition and to resist means a certain strike.
It is almost guaranteed that any strike will end with a victory of the union over the tax payers.

Remember the 2009 Toronto garbage pickup workers' strike?
That was about cumulative sick days, I believe.
It is not enough to have 20 sick days in a year - they must also be cumulative, so that the unionized workers can retire with 3 years worth of accumulated sick days.


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## nortel'd

HaroldCrump said:


> It is not enough to have 20 sick days in a year - they must also be cumulative, so that the unionized workers can retire with 3 years worth of accumulated sick days.


I have to agree 20 days is excessive but in the early part of the child rearing years, young families, especially single moms/dads, may need to use all if they have young children in daycare or under the age of 12. If the sitter is sick, the child is sick, there is a PD day, the school bus is canceled due to icy roads, etc, etc someone has to stay home and take care of you know who.


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## HaroldCrump

nortel'd said:


> but in the early part of the child rearing years, young families, especially single moms/dads, may need to use all if they have young children in daycare or under the age of 12. If the sitter is sick, the child is sick, there is a PD day, the school bus is canceled due to icy roads, etc, etc someone has to stay home and take care of you know who.


OK, so...unless you are a unionized govt. employee with 120 days of holidays in a year, you can't raise a child?

If we all agree this is fair, let us legislate that _every_ worker with young kids should have the equivalent amount of time off under law.
Why should non unionized workers have to drop off their kids to daycare on a day they are not feeling well, go to work, pay heavy taxes, so that their counterparts in the govt. can have a nice, warm, cushy AWOL day at home.

You realize, right, that these superfluous "sick" days and WLB days are nothing other than free AWOL days.


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## peterk

HaroldCrump said:


> If we all agree this is fair, let us legislate that _every_ worker with young kids should have the equivalent amount of time off under law.


haha indeed!

Why stop there though. Just go ahead and take away some sick days from us childless workers and redistribute them to our betters with children. I already pay for their education and healthcare and use of the infrastructure to get back and forth 20 times a week to school and sports and dance and every little place. Just make me a slave working for the luxury of others and their kids! :biggrin:


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## piano mom

These kids will grow up, work and pay taxes to support your CPP and OAS payments. The whole system is a pyramid scheme. Without these kids, your future is doomed. You should thank others for bringing them into the world and support them too. Just my opinion.

Having said that, I don't know if I agree with parents abusing sick days though...


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## peterk

Ha! I _am_ the kids (under 30s) that will be supporting the Boomers for the next 40 years! By the time I'm old I'll just go from supporting the children of others to supporting the young adults of other, and finally, the old age of those same people!



piano mom said:


> Without these kids, your future is doomed.


This would of course be based on the premise that parents pay for their children, and then children grow up to contribute to society (a net benefit to society). 

With more and more children these days society pays for their upbringing, and then when they're grown up and are supposed to work, they can't and won't (both) contribute to society as expected. And who pays the bill the whole time? Me! You're friendly neighbourhood high income single guy.

You're welcome.

(Sorry for the aggressive tangents - Just got my paystub yesterday with 20 hours of overtime - still grappling with the tax witheld line - It was like a halloween nightmare)


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## HaroldCrump

peterk said:


> Why stop there though. Just go ahead and take away some sick days from us childless workers and redistribute them to our betters with children.


The apartheid is not about those with or without kids.
It is about those with outrageous union contracts (negotiated politically), and those without.

The "sick" days being discussed here are not meant to be actually taken - they are meant to be accumulated YoY and en-cashed in a huge mother-of-all retirement bonanza.


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## kcowan

peterk said:


> (Just got my paystub yesterday with 20 hours of overtime - still grappling with the tax witheld line - It was like a halloween nightmare)


You need to revise your TD1 to get withholdings in line with what you will pay.


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## sags

It was my experience that our union was against accumulation of sick time or holidays by members. 

The union was against being paid in cash, in lieu of taking extra weeks of holidays, as well.

The company would much prefer to pay out cash, than have to hire extra people to cover vacation or sick time for employees.

In some instances, the company had to literally force people to take the last two weeks of the year off........to conform with legislation.

In fact, the union negotiated for PPA days, which were personal paid absent days, which were "vacation time" that could be taken as 4 hours or more on any given day. The time used was deducted from total vacation pay allowances.

If people are sick, or have kids at home who are sick, they are going to take time off work.......paid or not.

The only question is if they should be paid for the time.

The company wanted to pay in cash........and the union didn't agree........because paying in cash meant the company wouldn't need to hire and the union would gain no new members.


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## olivaw

Good thread. I wonder if it would be possible to re-open the poll to allow a few more people to vote. 

Canadians have been losing access to DB pensions for years. Globe and mail interviewed Jim Leech, head of the Ontario Teachers’ Pension Plan. He thinks that we, as a country, need to bring them back. I agree. 



> Defined benefit plans have been able to outperform from an investment perspective over defined contribution plans or RRSPs, and they’re far less expensive. Also, longevity risk [the risk of outliving your money] can be pooled in a defined benefit plan. If you’re in a defined contribution plan you must save enough money for yourself.


http://www.theglobeandmail.com/glob...tirement-rrsps/book-headline/article15167102/

Leech also said that DB pensions are a hot button issue. 


> When we asked people involved in pension reform, “Why have you let the system get into the shape it’s in,” they said this is an issue that politicians, labour leaders and even business would prefer not to touch because you’ll get zapped.


We have seen some union bashing and public sector bashing in this thread. Also some discussion about the haves and the have nots. Instead of working to take away DB pensions from people who have them, why not make them more accessible to more people?


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## GoldStone

olivaw said:


> Instead of working to take away DB pensions from people who have them, why not make them more accessible to more people?


Let me rephrase. The real question is:



> Instead of working to take away DB pensions from people in the public sector, why not make them more accessible to more people in the private sector?


The tweaked question reflects the reality of the great pension divide. The answer to the tweaked question is self-evident. There is absolutely nothing you can do to force private businesses to offer DB pensions. It's wishful thinking to pretend otherwise.


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## sags

True that government cannot force private companies to offer DB pensions to their employees, but they can stop and reverse legislation that circumvents the normal labor pool, which distorts the compensation companies have to offer to attract employees.

Right to work legislation, foreign temporary workers, allowing temp agencies to basically operate as slave labor camps, and lowering corporate tax rates when the desired effect of job creation doesn't materialize............are a few examples.

In what alternate universe, should somebody be allowed to keep a significant amount of someone's wages.......simply for providing work?

The company needing the work aren't allowed to do it. I am not allowed to get a job and then hire somebody else to do the work, while I get a cut of their pay. Only temp agencies seem to have that right......given to them sometime by someone.

In a normalized labor pool, wages would go up when there is a shortage of workers.

Wages in Canada have been stagnant for 20 years, due in large part to vast pools of temp and casual workers.


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## AltaRed

Canada already has a productivity deficit vis-a-vis the global community, and more importantly with our free trade partners. Since our companies are already collectively behind the 8 ball, any more encumberances will simply make the situation worse. Want more companies pulling back, shrinking, and cutting jobs? 

What we really need is less taxpayer money being pumped out to the overpaid portions of the civil service and the way to start doing that is to start squeezing that portion of that voracious beast.


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## fraser

AltaRed....absolutely. And that productivity deficit has been growing vis a vis the G8 nations and other world competitors. And when it is addressed, it will result in more technology and fewer jobs-especially in Ontario and Quebec.


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## olivaw

Duplicate post, deleted


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## olivaw

sags said:


> True that government cannot force private companies to offer DB pensions to their employees,


The government probably could force private companies to offer private DB pensions but there are alternatives. 

Expand CPP/QPP. 
Tax incentives for businesses that offer DB Pensions. 
Insurance products that make annuities more accessible to employers. Maybe these exist and the insurance industry just hasn't done a good job of selling them. 
We could even create an annuity marketplace. (Obamacare for pensions anyone  )



Altared said:


> What we really need is less taxpayer money being pumped out to the overpaid portions of the civil service and the way to start doing that is to start squeezing that portion of that voracious beast.


A race to the bottom?


----------



## doctrine

> Mary joins public service at the age of 25.
> She earns $60,000 in constant dollars.
> She retires after 30 years of service at the age of 55.
> Her DB pension is worth: $60,000 * 30 * 2% = $36,000/year
> 
> Jane joins private sector at the age of 25.
> She earns $60,000 in constant dollars, plus a take-home bonus of 12% ($7,200K/year or $600/month).
> She invests the bonus in an RRSP at 6% real rate of return.
> She retires after 30 years of service at the age of 55.
> Her RRSP is worth 600K at retirement.
> Assuming 3% safe withdrawal rate, Jane can withdraw 600K * 3% = $18,000/year


Ah. I like this analysis. DB plans have some benefits that allow the higher payout. The questions this raises for me are:

-If 12% contributions and 6% real returns do not give equivalent benefits, what contribution rate does? 15% would probably produce a very different number
-The 3% withdrawal rate is low. At that rate, Jane is certainly going to retain her capital at death which is then part of her estate. There would be no $600k+ estate with a death under the DB plan. The DB plan really does allow this "lifetime" risk to be pooled. 
-4% is often given as a more reasonable number which still allows some certainty of capital. You may be able to withdraw up to 5% if you're willing to accept the money might run out at 75-80 and then you're willing to live on CPP/OAS/GIS from then on. Of course, you might even get away with 6% if you are getting steady 6% real returns.
-and of course 6% would give that equivalent monthly benefit, the difference being risk of losing it which you don't have with the DB plan. Higher contributions (15%) might allow a lower withdrawal rate (4-5%) to maintain the same benefit.

Underpinning all of this "gold plated public service pension" discussion is a missed point - the Conservative Party of Canada passed a policy motion at their convention to push public servants to DC plans. This is not likely to happen before the next election but if they are re-elected, could come to pass. They have been pretty steady at removing some long standing benefits and have successful in holding all unions to 1.5% annual pay increases since 2008 or so.


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## GoldStone

doctrine said:


> -If 12% contributions and 6% real returns do not give equivalent benefits, what contribution rate does? 15% would probably produce a very different number


On the flip side, 6% real return is not guaranteed and is actually not that conservative. 4% real return would produce a very different number as well (not in Jane's favour).

Even 4% real can be problematic, if Jane ends up in the clutches of a typical mutual fund salesman.



doctrine said:


> -The 3% withdrawal rate is low. At that rate, Jane is certainly going to retain her capital at death which is then part of her estate. There would be no $600k+ estate with a death under the DB plan. The DB plan really does allow this "lifetime" risk to be pooled.
> -4% is often given as a more reasonable number which still allows some certainty of capital.


How up to date are you with the current research on the safe withdrawal rates? The often quoted 4% rule has been thoroughly debunked. It is not safe at all. I will give you a few links but you can easily find more. It's a hot topic in the retirement planning community.

Wade Pfau (the top expert on retirement planning - jusk ask MoneyGal)
An International Perspective on Safe Withdrawal Rates from Retirement Savings: The Demise of the 4 Percent Rule?

Larry Swedroe
Safe withdrawal rate: Is 3 percent the new 4 percent?

WSJ
Say Goodbye to the 4% Rule

Journal of Financial Planning
A Safer Safe Withdrawal Rate Using Various Return Distributions

A quote from the last link:

"Our analysis indicates that a 4 percent withdrawal rate will result in portfolio failure with greater probability (18 percent) than previously believed, and the truly “safe” withdrawal rate—2.52 percent—is significantly smaller than previously believed."



doctrine said:


> You may be able to withdraw up to 5% if you're willing to accept the money might run out at 75-80 and then you're willing to live on CPP/OAS/GIS from then on.


How about we tell public service DB retirees they have to live on CPP/OAS/GIS once they turn 75-80? How many would find this acceptable?



doctrine said:


> Of course, you might even get away with 6% if you are getting steady 6% real returns.


Of course, pigs may learn to fly one day too. Right? Seriously though, stock markets do not deliver steady returns. The average market return has a standard deviation of 20%. A bad sequence of returns early on in retirement can devastate the retirement portfolio.



doctrine said:


> Underpinning all of this "gold plated public service pension" discussion is a missed point - the Conservative Party of Canada passed a policy motion at their convention to push public servants to DC plans.


It's just sabre-rattling by the rank and file party members. It's very unlikely to become a legislation. For the record, I fully support the idea. Public DB plans are not equitable to the vast majority of taxpayers who don't enjoy the same benefits.


----------



## doctrine

3% - my honest opinion is I think that is ridiculous. Assuming 3% leads to some interesting conclusions, like you have to save insane amounts of your income and will likely still be living in poverty or working until you're 75. 

Of course if you are in the financial business and are working with 60-40 portfolios and subtract 2% for fees, 3% becomes a lot more realistic to keep your customers' expectations managed.

Bonds may be the biggest risk to someone's retirement. I can predict the returns of a bond fund with YTM of 2% minus fees minus inflation, and you certainly can't be withdrawing even 3% a year out of that and expect it to last long.


----------



## GoldStone

doctrine said:


> 3% - my honest opinion is I think that is ridiculous.


No offense, but do some reading on the subject before you start offering your opinion. I posted a few links upthread. 4% rule was based on historic returns in the US market. Those returns - both stocks and bonds - were exceptionally good before year 2000. Once you lower the return assumptions a bit, 4% rule goes out the window.

Also remember, you can't extrapolate your personal investment returns to everyone. Very few people outside of CMF can invest the same way you do. Most mom & pop investors need financial advice. It costs money and eats into returns.



doctrine said:


> Assuming 3% leads to some interesting conclusions, like you have to save insane amounts of your income and will likely still be living in poverty or working until you're 75.


Yes, the implications are:
- save more
- be prepared to work longer
- lower your expectations in retirement

This is the reality in the private sector.


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## GoldStone

Just to clarify, here's how SWR number works.

1. Take the value of your portfolio at retirement. Say, 1M.
2. Apply the withdrawal rate. Say, 4%. 1M * 4% = 40K.
3. Withdraw 40K in the first year.
4. Next year, adjust 40K for inflation. Say, 2%. 40K * 1.02 = 40.8K.
5. Withdraw 40.8K in the second year.
6. Rinse and repeat.

This withdrawal scheme delivers a constant inflation adjusted income stream, similar to an indexed DB pension.

A high WR and a bad sequence of market returns can kill the portfolio. I will post the simulation charts if I can find them.

This is why the SWR has to be as low as 3%. It's not 3% of your remaining portfolio balance. It's 3% of the initial balance, plus compounded inflation adjustments.


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## AltaRed

olivaw said:


> A race to the bottom?


It is well known the bulk of civil servants below a certain wage, perhaps $50-80k now have a wage and benefit compensation package substantially superior to that in the private sector, while perhaps the top 10% of civil servants have a compensation package below that of the private sector (assuming they work just as productively). It is that bulk of the public sector that needs to be brought into line with the private sector. The taxpayer cannot continue to fund those that are not adding their share of productivity to this country. Every job should to be looked at in terms of productivity contribution to GDP. 

Whether needed cuts result in a race to the bottom or not, it becomes a moot point if a particular business/industry (and its productivity contribution) disappear from Canada. At some point, that goose no longer lays eggs.


----------



## olivaw

> Mary joins public service at the age of 25.
> She earns $60,000 in constant dollars.
> She retires after 30 years of service at the age of 55.
> Her DB pension is worth: $60,000 * 30 * 2% = $36,000/year
> 
> Jane joins private sector at the age of 25.
> She earns $60,000 in constant dollars, plus a take-home bonus of 12% ($7,200K/year or $600/month).
> 
> She invests the bonus in an RRSP at 6% real rate of return.
> She retires after 30 years of service at the age of 55.
> Her RRSP is worth 600K at retirement.
> Assuming 3% safe withdrawal rate, Jane can withdraw 600K * 3% = $18,000/year


Are these figures accurate?

Public service pensions are reduced by CPP (somebody correct me if I am wrong but that is what my retired public service friend tells me). Assume 6K CPP and she receives 30K per year. 

The estimate for Private Sector Jane may be too low. She could purchase an annuity that pays her 28K per year. Maybe a little less if it is indexed for inflation. See http://www.lifeannuities.com/articles/2013/annuity-rates-canada-2013.html


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## GoldStone

olivaw said:


> Public service pensions are reduced by CPP (somebody correct me if I am wrong but that is what my retired public service friend tells me). Assume 6K CPP and she receives 30K per year.


Yes, integrated pensions are reduced by CPP, when you start CPP at age 65. In my example above, Mary receives unreduced 36K from 55 to 65.



olivaw said:


> The estimate for Private Sector Jane may be too low.


Or it may be too high. 6% real rate of return is not a slam dunk.



olivaw said:


> She could purchase an annuity that pays her 28K per year. Maybe a little less if it is indexed for inflation.


As far as I know, indexed annuities are rare and very expensive. Spending the entire RRSP amount on an unindexed annuity at age 55 doesn't make any sense. Inflation would completely erode the purchasing power over 30 years of retirement.


----------



## doctrine

I don't think I'm that uneducated on the subject. But I do agree it is complicated.



> In my example above, Mary receives unreduced 36K from 55 to 65.


FYI, I believe the gov't just changed this, if Mary/Jane joined now they could not receive any pension until at least age 60. I know someone who took a federal public servant job and got in just before the changeover last year. That would save the government $180k in this case.


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## sags

Even if Mary and Jane contributed the exact same amount to their pension plans, the results would be different.

The DB plan would pay a higher benefit due to longevity risk sharing, lower management fees, and the ability of large pension funds to make investments that aren't possible for the average investor.


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## HaroldCrump

olivaw said:


> Expand CPP/QPP.


The issue with a blanket expansion of the CPP is that it is effectively an across-the-board wage increase for all workers.
It is also effectively a higher "tax" on businesses (assuming the current equal contributions are preserved).
Businesses will not be too happy about it without a concomitant reduction in corporate taxes, or some other substantial incentives.

Our corporate taxes are already quite low compared to the G8 - we are at 15%, which is lower than the US too.
Further reductions in corporate taxes or other tax-based incentives for businesses will prevent us from balancing the budget.

To do that, spending must be cut in other areas.

Of course, the government could - _if they wanted_ - claw back the outrageous public sector pension plans and divert those funds towards the expansion of the CPP.
CUPE and other militant unions could be told to lump it.

On the other hand, some raving lunatics like Thomas Mulcair are calling for both corporate taxes to be raised back up to 22%, as well as immediate doubling of the CPP benefits.
And oh btw, new wings for the pigs too.


----------



## MoneyGal

olivaw said:


> The estimate for Private Sector Jane may be too low. She could purchase an annuity that pays her 28K per year. Maybe a little less if it is indexed for inflation. See http://www.lifeannuities.com/articles/2013/annuity-rates-canada-2013.html


There is effectively no capacity to buy an indexed annuity in Canada. However, indexing, if it is available, typically adds a premium of 30-40% to an annuity purchase.


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## HaroldCrump

MoneyGal said:


> There is effectively no capacity to buy an indexed annuity in Canada. However, indexing, if it is available, typically adds a premium of 30-40% to an annuity purchase.


I have heard this argument often as well.
_Just go buy an annuity_, they said
_Why can't you eat cake_, said she.

Some books and web articles about retirement planning perpetuate this as well.
Then it gets picked up by other writers who regurgitate it further, thereby creating an urban myth.
That an RRSP stash can be used to purchase - dollar-for-dollar - a defined benefit style "pension" in the open market.

And oh, please make the indexed, guaranteed annuity payments start at 55, s'il vous plait.
Want fries with that, too?


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## olivaw

HaroldCrump said:


> The issue with a blanket expansion of the CPP is that it is effectively an across-the-board wage increase for all workers.


Won't it be net neutral for most employers and employees? Funds that are going into DC pension plans could just go towards CPP. 

No indexed annuity in Canada you say? Pity.


----------



## fraser

You can actually buy an annuity that mirrors, to a very large degree, the commuted value of an non indexed DB entitlement. The cost will be higher than the commuted value of the DB pension simply because DB pension pools have a lower life expectancy. 

People who expect to have a shortened lifespan for whatever reason are not very inclined to buy annuities. The insurance company pays out for a longer period of time.

You can buy that annuity as a registered non register instrument.

Depending on the health of a particular DB plan, the annuity can be a safer instrument because of the Assuris funds.


----------



## NorthKC

Jon_Snow said:


> My wife and I are saving 80% of our income right now - of the approximately 12k monthly we are bringing in (both salaries, dividends), we are only spending about $2500.


80%?! That's impressive! Enjoy your early retirement!


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## HaroldCrump

olivaw said:


> Won't it be net neutral for most employers and employees? Funds that are going into DC pension plans could just go towards CPP.


What DC pension plan?
The vast majority of private sector workers have no company sponsored pension plan, DC or DB.

Some do have Group RRSP plans, some of whom have employer matches.
But again we are talking of very small numbers as a % of salary.

Therefore, to increase mandatory employer contributions into CPP is effectively a pay raise.


----------



## MoneyGal

HaroldCrump said:


> What DC pension plan?
> The vast majority of private sector workers have no company sponsored pension plan, DC or DB.
> 
> Some do have Group RRSP plans, some of whom have employer matches.
> But again we are talking of very small numbers as a % of salary.
> 
> Therefore, to increase mandatory employer contributions into CPP is effectively a pay raise.


Or after-tax pay cut.


----------



## NorthKC

sags said:


> It was my experience that our union was against accumulation of sick time or holidays by members.
> 
> The union was against being paid in cash, in lieu of taking extra weeks of holidays, as well.
> 
> The company would much prefer to pay out cash, than have to hire extra people to cover vacation or sick time for employees.
> 
> In some instances, the company had to literally force people to take the last two weeks of the year off........to conform with legislation.
> 
> In fact, the union negotiated for PPA days, which were personal paid absent days, which were "vacation time" that could be taken as 4 hours or more on any given day. The time used was deducted from total vacation pay allowances.
> 
> If people are sick, or have kids at home who are sick, they are going to take time off work.......paid or not.
> 
> The only question is if they should be paid for the time.
> 
> The company wanted to pay in cash........and the union didn't agree........because paying in cash meant the company wouldn't need to hire and the union would gain no new members.


I should add that taking money paid in cash in lieu of taking holidays is due to extra payroll taxes withheld which many people don't like.


----------



## HaroldCrump

NorthKC said:


> I should add that taking money paid in cash in lieu of taking holidays is due to extra payroll taxes withheld which many people don't like.


True, but it depends on whether an individual (or family) values the time more or the cash more.


----------



## sags

For an employee, a raise in contributions to CPP is neither a pay cut nor a pay raise.

It is a transfer of income to savings, in the same manner as if someone was having RRSP deductions from their pay.

For an employer, a raise in CPP premiums is an increase in costs for the employer, although it doesn't necessarily have to be.

An overall compensation package can be changed to increase the CPP contributions, while reducing the same level of costs from other compensation.

Perhaps, overtime paid after a higher number of hours, or a lower overtime or shift premium. Or, a few days less vacation or sick time. Perhaps a change in a benefit that is rarely used.....but cost the company in premiums.

If an employer pays the minimum wage and no benefits......then I guess it will be an added cost. Employers like that are a burden to society in general, as they transfer the costs of the employees to the taxpayers in higher social benefit costs.

The cost of the GIS is going to continue to rise, to subsidize those who didn't save for themselves.

A solution is needed. The status quo is not working and will be unaffordable for taxpayers. 

Until the opposition to CPP changes can offer a better alternative, the CPP is the best solution.


----------



## sags

I worked in a place that had overtime for the 30 years I worked there.

Most of it was voluntary, but some was mandatory when workers grew fatigued and didn't volunteer to come in.

This was not a temporary work flow situation. There was more work than the current staff could handle. 

The company paid 1 1/2 times wages for overtime and 3 times wages for statutory holidays. Sometimes they paid 2 times pay for "doubling back" or working two consecutive 8 hour shifts.

I wonder how many places are using overtime to compensate for a lack of hiring.

Maybe the government should consider more stringent rules on the granting of overtime permits.


----------



## HaroldCrump

sags said:


> For an employer, a raise in CPP premiums is an increase in costs for the employer, although it doesn't necessarily have to be.
> An overall compensation package can be changed to increase the CPP contributions, while reducing the same level of costs from other compensation.


What other component of a compensation package do you recommend employers should cut?
Base salary? Drug plan? Vacation time?



> Perhaps, overtime paid after a higher number of hours, or a lower overtime or shift premium. Or, a few days less vacation or sick time. Perhaps a change in a benefit that is rarely used.....but cost the company in premiums.


Most private corporations have already squeezed all the juice out of benefits packages, esp. since 2008.
There is nothing left for them to cut any more.



> The cost of the GIS is going to continue to rise, to subsidize those who didn't save for themselves.
> A solution is needed. The status quo is not working.
> Until the opposition to CPP changes can offer a better alternative, the CPP is the best solution.


OK, so you are suggesting cut in total compensation to pay for an increase in CPP contributions.

Let's do the following - we cut the defined benefit pensions paid to the entire public sector.
Esp. cut to features such as early retirement provisions (bridge benefits), indexation, the accrual rate, and the maximum salary used for calculating pension amount.

The tax savings those cuts will yield can be used to offset the increase in CPP contributions for both employer and employee.
Employers can be given further reductions in corporate tax rates as well as any other needed incentives.
To offset the additional cost to workers, income tax rates can be cut across the board.


----------



## olivaw

sags said:


> Until the opposition to CPP changes can offer a better alternative, the CPP is the best solution.


This is pretty much what I was about to say. 



> Let's do the following - we cut the defined benefit pensions paid to the entire public sector.
> Esp. cut to features such as early retirement provisions (bridge benefits), indexation, the accrual rate, and the maximum salary used for calculating pension amount....The tax savings those cuts will yield can be used to offset the increase in CPP contributions for both employer and employee.


Messy. You'd be paying for CPP out of general revenues. (Not to mention the ethical argument about how we treat our government employees).


----------



## HaroldCrump

olivaw said:


> You'd be paying for CPP out of general revenues.


No. sags said the GIS is not a good solution.
GIS is paid out of general revenues.
CPP increase would still be under the umbrella of the CPP.

All I suggested is to offset the increased cost to businesses and workers by way of tax cuts (paid for by clawing back public sector pensions).



> (Not to mention the ethical argument about how we treat our government employees).


What ethical argument?
The one that says government employees work very hard and deserve every penny of their pensions?


----------



## sags

I think there could be more clarity to employees what the cost of some benefits are. After they understand the costs, maybe employees will would decide a pension at the end of their working days is worth giving up a little cash or some benefits today.

For example, eyeglasses are a benefit that most people can afford to pay themselves. Perhaps straight time for overtime worked?

There has to be a greater effort put towards employees understanding the situation, and a joint agreement there will be some sacrifice from both sides.

When we negotiated a new contract..........and it was put to the people for a vote........it started like this..........

We have agreed on a $1.00 per hour increase in compensation.

Of that $1.00.......20 cents per hour will be directed towards the extra holidays we agreed to. Another 20 cents will go into the increased costs of benefits.

After the diversions.........there is a .35 cent per hour general wage increase.

Diversion of compensation isn't a new concept. It just isn't discussed much.

On the other hand, if we are talking about companies that cannot afford any increase to any compensation for employees, we are in big trouble.

In my opinion, companies can't expect to structure their business on the lowest possible compensation to employees.......and keeping it that way forever.


----------



## HaroldCrump

sags said:


> I think there could be more clarity to employees what the cost of some benefits are.


Similarly, I think there should be more clarity to tax payers on the cost of public sector benefits and pensions.
I don't think there is enough awareness around this issue.



> After they understand the costs, maybe employees will would decide a pension at the end of their working days is worth giving up a little cash or some benefits today.


Will they really?
If so, why are they not saving in the retirement programs that are already available, such as RRSP and TFSA?
There is no dearth of education in the media, even though some of it may have a vested interest (such as free "education" by the banks).



> There has to be a greater effort put towards employees understanding the situation, and a joint agreement there will be some sacrifice from both sides.


Where is the part about the "sacrifice" by the unionized public sector to reduce the tax burden for the rest 80% of workers?

Why do unpensioned private sector workers and their employers have to sacrifice even more?
They are already sacrificing enough....towards paying for somebody else's pension.

Given the current level of income taxes, I just don't see how you can make people give up even more of their income towards a mandatory program that they may or may not receive any benefits from.


----------



## sags

To be successful, any retirement savings program is going to have to be mandatory.

If given a chance to opt out........people will, as they are living in debt and a few dollars more.......is a few dollars more to spend.

I went through this as a contract negotiator. People suffer listening to all the other benefits gained.........questioned why more wasn't attained or why some things had to be given up.....but the bottom line is "how much do we get now".

Most people don't understand the necessary "give and take" during contract negotiations.

The union says.......our members put a high priority on another week of holidays. The company says that will cost xxxx amount of dollars. We will meet you half way.......what are you willing to give up?

As far as the public service........it is between the employees and the employers, in my opinion.

If taxpayers don't like the wages their politicians are negotiating with public service workers...........get new politicians.

Don't expect the union to do the cost cutting negotiations for them. Not only isn't it their job.......but they could be sued by their members for failure to represent them.

Politicians will vote for anything that will get them votes, so I think the absence of any attempt at downsizing the public service is conducive to the reality........the general public doesn't support it..........so the politicians don't do it.


----------



## fraser

I am very thankful that I have a DB plan.

But I am also thankful that we lived within our means and saved for our retirement. We only ever bought 1 new car, the rest were used, and we kept them for a good long time. RSP, savings plans, and paying down mortgages. vs a new car every three or four years or the latest and greatest for our kids. 

Preparing yourself financially for retirement is the second half of the equation. Canadians are not doing this. People need to take more responsibility for their financial future and make good choices. 

Good choices cannot be legislated by Government.


----------



## Jon_Snow

I am also thankful for my DB pension... though I am in no way relying on it for my retirement needs. I have been saving and investing as though I have no pension at all. Gives me far greater options in how and when I execute my retirement.


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## kcowan

fraser said:


> We only ever bought 1 new car, the rest were used, and we kept them for a good long time. ...


Us too. But the used cars were all of a luxury nature because luxury brands depreciate faster than standard ones.


----------



## sags

kcowan said:


> Us too. But the used cars were all of a luxury nature because luxury brands depreciate faster than standard ones.


I hope you are right.

I have been eyeballing a 2006 Cadillac CTS with only 136,000 kms on it.

It is priced at $10,000 from a reputable used car dealer. They check out all their cars before they buy them and they say it is in fantastic condition.

It has been for sale for awhile, while the small cars are turned over very quickly.

I think people don't want big cars anymore........good deal or not.

Everything is about gas mileage these days.

We have a 2005 Pontiac Wave right now...........and I long for a car that doesn't bounce us around like tennis balls.


----------



## fraser

Same here. We look for high end, full load, low mileage, 3 or 4 year old Toyota, Honda, or Acura models 

Last one we bought was four years old, very low mileage, at exactly half the price of a new one. It takes time to find a good one because of our 'list'. We maintain them well and keep them for a long time. I really do dislike the car buying process-new or used.


----------



## nortel'd

Jon_Snow said:


> I am also thankful for my DB pension... though I am in no way relying on it for my retirement needs.


*+1* 
I also saved, invested and lived as though I would have no pension at all. My CPP, investment income and OAS when it begins at 65 will equal 75% of the life-time portion of my DB pension. I am now able to execute the retirement I planned, but all came about with a big helping of personal sacrifice.


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## NorthKC

I don't have a DB plan or will ever have one. If I happen to land a job with this plan, I would be happy but no way will I ever rely on it. I was fortunate enough to have a Group RRSP at one of my former employers where they did the matching plan.

Like everything else, a DB plan can be good if planned correctly from the beginning and the company stays on top of the funding. A DC can also be useful as long as the employee invests it wisely but the average person knows nothing about. So, I support a hybrid of these two plans along with an education in investing.


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## hystat

from my retirement calculator online. 
Earliest reduced pension $25,128 / year Age: 55 (bridging around $5500yr)
Earliest unreduced pension $42,444 / year Age: 60 (bridge around $9K)
Normal retirement pension $57,672 / year Age: 65

Apparently I won the public sector lottery where they hand out these sunshine jobs to unskilled people who made minimum wage in the private sector working twice as hard... lol... lucky me

(I made more money in the private sector and the DC pension I had contained a profit sharing formula that blew away this DB plan)

For me, the big benefit of my DB plan is the survivor payouts. Genetic predisposition says my wife will outlive me by 25 years.


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## hystat

and on that last note.... I have a friend in the same pension. He is single. I often think if he ever gets a terminal illness, he should marry an 18 year old and she would be set for life.....
These old school plans really are designed around the Leave It To Beaver model of a family.


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## chantl01

hystat said:


> and on that last note.... I have a friend in the same pension. He is single. I often think if he ever gets a terminal illness, he should marry an 18 year old and she would be set for life.....
> These old school plans really are designed around the Leave It To Beaver model of a family.


Funny thought, but in fact this was not at all uncommon - there were quite a number of U.S. Civil War widows collecting pensions long after their husbands had passed on to the great beyond. The last of these widows just expired themselves in the past decade: http://www.infoplease.com/ipa/A0908934.html


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## Eclectic12

NorthKC said:


> ... A DC can also be useful as long as the employee invests it wisely but the average person knows nothing about...


I'd add the cavaet that the company contracted for a reasonable DC plan in terms of cost and range of investments. For example, if I was depending on one DC plan offered - I doubt it would have gone well considering the only equity MF (of four total MFs offered) was a mix of Canadian and US stock. So within the DC plan, these were the only two stock markets that could be invested in.


Cheers


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## HaroldCrump

chantl01 said:


> Funny thought, but in fact this was not at all uncommon - there were quite a number of U.S. Civil War widows collecting pensions long after their husbands had passed on to the great beyond. The last of these widows just expired themselves in the past decade:


Jane Austen wrote in _Sense and Sensibility_ over 200 years ago:

_*"If you observe, people always live for ever when there is an annuity to be paid them."*_


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## fraser

Most DB plans reduce the monthly payment when a spouse has survivor rights.

The amount of this reduction is based on percentage of pension paid and AGE of the spouse. I have heard that some pension plans will not offer a survivor option if the spouse/significant other if there that person is significantly younger.


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## Daniel A.

My wife has survivor rights on my pension 100% yes I took a small hit but she is covered for life, the difference for life was something like less than 100.00 dollars a month.


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## habsfan59

In today's dollars my DB pension will be about $28,000/yr at 60 yr old (presently 54) and my wife will get approx $21,000/yr at 60 yr old (She is 53). Both pension indexed. We don't intent to work until 60 yr old..! Over time, we were able to set aside more than $650K (registered and non-registered) to supplement our pension income. We cleared our debt many yrs ago. Toying with different scenarios to determine best time to pull the plug...!


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## sags

At 60........you can both "double dip" the CPP.

But, if you want to retire early........be sure to check out if there are any pension reductions for leaving earlier than 60.


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## Daniel A.

habsfan59 said:


> In today's dollars my DB pension will be about $28,000/yr at 60 yr old (presently 54) and my wife will get approx $21,000/yr at 60 yr old (She is 53). Both pension indexed. We don't intent to work until 60 yr old..! Over time, we were able to set aside more than $650K (registered and non-registered) to supplement our pension income. We cleared our debt many yrs ago. Toying with different scenarios to determine best time to pull the plug...!


I wish you the best !!!!!


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## Andrew

I have a corporate DB plan. It is not very "rich" however. 

- Not indexed to inflation (although your benefits can be adjusted at the discretion of the company --> year right)
- Based on 30 years of your earnings and not best 5
- Underfunded by 30-40%

Basically, I won't be relying on my corporate pension for the majority of my retirement income.. Especially if inflation takes off.


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## HaroldCrump

Andrew said:


> - Not indexed to inflation (although your benefits can be adjusted at the discretion of the company --> year right)
> - Based on 30 years of your earnings and not best 5
> - Underfunded by 30-40%


Yup, those are pretty much what most private sector DBP plans look like.
A far, far cry from the fully indexed, 2% accrual rate, based on 5 highest years' salaries, fully funded plans in the public sector.

Obviously, it helps if the plan sponsor (the employer) has access to unlimited funds via the power of taxation.


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## fraser

Actually, DB pensions funds have experienced a significant increase in funding levels-particularly this year. Percentage of those plans funded less than 85 percent has decreased from 60 percent of DB plans to 11 percent of DB plans.

The Mercer Pension Health Index is now at 98 percent, up for 82 percent at the beginning of the year, and is at the highest level in six years.

http://www.benefitscanada.com/pensions/db/health-of-db-plans-continue-to-improve-44596

http://www.newswire.ca/en/story/123...significantly-in-the-third-quarter-aon-hewitt

There are still some 'dogs' out there but I guess there always will be. Fortunately, I am in a very healthy private plan.

Many plans will see a significant improvement in funding levels, particularly those DB plans that have not had a statutory audit in the last two or three years (depending on the frequency imposed by the jurisdiction).


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## sags

Small percentage increases in bond rates, give pensions a huge boost.

Many are also finding alternative investments, such as commercial real estate, can be very profitable.

When you can buy assets that generate good cash returns, and have no debt.........it is a pretty good place to be invested.

The "value" of DB pensions was being questioned after they had been battered by the recession, like everyone else.

They will look a whole lot more beneficial if they start piling up surpluses.


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## hystat

from my pension newsletter archive:
"_Pension earned from January 1, 2008 onwards
Your pension earned from January 1, 2008 onwards has “conditional” inflation protection payments. It will have indexation paid *if the Plan can afford it*. This is determined annually by the Board of Trustees. Due to past surpluses, pensions earned in 2008, 2009 and 2010 have also been granted inflation protection. Future granting of inflation protection on this service would depend on the Plan’s funding position._"

lol the bold part

The colleges hire everyone they can contract and part-time. Going forward the pension is a dying horse. I consider my pension payments today almost as a tax. If I could opt out I would. 

I am entertained by the public perception of a public pension plan though.


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## james4beach

It seems to me like a disproportionate number of canadianmoneyforum participants have DB pensions and I'm constantly bewildered by this.

Where on earth are you folks getting these?? I'm a young guy, how do I get one? Can you mention the names of some employers that have DBs, so I can target these in my job hunt? I'm tired of being left out in the cold, I want to join the DB party!


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## fraser

Lots of things to consider even before you get to the details of the plan.

The employer may have a DB plan but that plan may be closed to new employees.

At some point in the future an employer with an open DB plan could close it and move commuted values moved over to a DC plan. Depending on age/service or a combination thereof certain employees would typically be given the choice of being grandfathered in or moving completely to a new DC plan. 

This is what happened with my former employer. I was very surprised at how many people who were otherwise eligible to remain grandfathered actually made the decision to move to the DC plan, including moving the commuted value of their DB plan to the new DC plan.


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## MoneyGal

james4beach said:


> It seems to me like a disproportionate number of canadianmoneyforum participants have DB pensions and I'm constantly bewildered by this.
> 
> Where on earth are you folks getting these?? I'm a young guy, how do I get one? Can you mention the names of some employers that have DBs, so I can target these in my job hunt? I'm tired of being left out in the cold, I want to join the DB party!


Once upon a time I worked with a young finance student who was hired to (among other things) phone EVERY company in the TSX60 and ask if they had a DB pension for current or past employees, and was it closed or open to new employees. 

Short answer: if you want to work for a company in the TSX60, and you want to have a DB pension, it's going to be a railroad or a bank.


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## pwm

MoneyGal, I presume you would include lifecos when you refer to banks.


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## HaroldCrump

MG & pwm, as you are probably aware, many banks and insurance companies have recently been switching to DC plans.
They are no longer offering DB plans to new hires.

For instance, in 2011 Royal Bank (RBC), switched from DBP to DC.
In 2008 or 2009, Manulife switched to DC.
Both of these are leading members of the TSX 60.

There are others, of course, like Sun Life (SLF) that still offer DB to all its employees.

Another sector that is very popular for DBPs are the utilities.
But there is cause for caution there - many Canadian utilities' DBP plans are underfunded these days, incl. TransAlta and TransCanada.
There was a list published by the Money Sense magazine couple of years ago that had such a list.


----------



## the-royal-mail

james, check the job hunter book 'canada's top 100 employers' and similar for details like this. I agree with you, it is worthwhile trying to find companies which offer this. Unfortunately you are late to the party as the demand and competition for those jobs tends to be very high.


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## MoneyGal

pwm said:


> MoneyGal, I presume you would include lifecos when you refer to banks.


I should have written, "financial institution."


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## peterk

I believe most of the big oil companies operating in Alberta offers DB plans. Mine certainly does...


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## fraser

peterk...my understanding is that you are correct.

And a friend here in Calgary who is familiar with the industry tells me that the existence of a DB is used more and more as a tool in the competitive hiring process. That, and of course stock options.


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## james4beach

the-royal-mail said:


> james, check the job hunter book 'canada's top 100 employers' and similar for details like this. I agree with you, it is worthwhile trying to find companies which offer this. Unfortunately you are late to the party as the demand and competition for those jobs tends to be very high.


Thanks for all the replies everyone. As I'm job hunting this will certainly be one of my considerations.

I haven't looked at Alberta enough -- definitely going to start searching more in that region.


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## fraser

Given the health of the market these days it will be very interesting to see the Mercer survey of DB funding levels as at 31/12

There was a significant increase in funding levels to Q3. 

According to Mercer, only 11 percent of DB plans were funded under 85 percent at the end of Q3.

Q4 can only be better.


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## Sammi

I have a DB Pension. I work for the Ontario Government; Crown Corp.


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## avrex

sags said:


> If taxpayers don't like the wages their politicians are negotiating with public service workers...........get new politicians.
> 
> Don't expect the union to do the cost cutting negotiations for them. Not only isn't it their job.......but they could be sued by their members for failure to represent them.


I would hereby like to sue my government, for failure to represent 80% of Canadians. 
The government continues to do nothing to fight back against or even curb the public sector unions demands for large DB pensions and benefits.


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## Retiredguy

Daniel A. said:


> My wife has survivor rights on my pension 100% yes I took a small hit but she is covered for life, the difference for life was something like less than 100.00 dollars a month.


When I got my DB pension, it was reduced to 88% when I took the Joint life and last survivor option.


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## james4beach

I don't blame the government or the public sector unions. I applaud the unions... bravo to them for standing up for workers and providing excellent benefits and pensions that workers deserve.

What all of us in the private sector, non-unionized, should be asking is ... why are we getting such a bad deal? For instance why am I being forced to work unpaid overtime, why do I have no pension, why are my benefits poor? Why do I not have job security? Why is it so easy for management to screw me? Those are the real questions. I think it's mentally lazy to just say, public sector gets it too easy so they should lose what they have.

We non-unionized people should strive to move UP to the example and standard set by public sector unions. Better pay, benefits, pensions. Better quality of life.

I don't like all the anti-union talk out there. I think unions have done great things for Canadian workers and don't seem to get enough appreciation for it. I've never been part of a union.


----------



## james4beach

Here's some text from UFCW Canada. There's obviously a lot of right-wing bashing of unions



> *Why Unions are Good for the Canadian Economy*
> 
> Many historians credit unions with the rise of Canada's middle class and the general prosperity of the country. By helping more workers make decent wages with more job security, unions were largely responsible for stabilizing the economy and stimulating its growth. Because of unions, more working people could afford houses, better food, clothing, cars and other consumer goods. Increasing demand for these things created more jobs and even more economic growth.
> 
> Better-paid and more secure workers could also pay more in taxes to support the growth of public services like schools, roads, clean water, police services, electricity and health care. Even those who have never belonged to a union have benefited from their existence all their lives.
> 
> Even though some people like to say that unions are bad for the economy, the Canadian reality proves them wrong. Canada is among the top five most prosperous countries in the world and has a relatively high rate of unionization. Union workers make more money, spend more money and create more jobs with that spending. The health care benefits enjoyed by union members (dental, prescription drugs, optical, physiotherapy, etc) means healthier families and less of a burden on the health care system. And their higher pensions mean they are much less of a burden on their children and communities when they retire. Unions are good, not bad, for Canada's economy.


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## fraser

If it was not for unions, many of us would be working six day, 10 hour weeks. Vacations, sick time, over time...think again. Some would be working in terribly unsafe environments, we would not have universal health care insurance, pensions, and many other things that we take for granted. . And a bunch of middle and seniors managers would not be earning the money that they are today.

Sure there are some poor unions, but there are also some very bad management teams.

There is an old saying. Management gets the union they deserve. There are many good union locals. We only get to hear about he minority.

I spent my career in management.


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## james4beach

And how about rights of women? Sexual harassment?
Rights of older people against age discrimination?
Elimination of sweat shops, unsafe conditions for workers...

The list goes on and on. Unions have done a lot for the country and we're in danger of going backwards in time if we quickly dismiss or eliminate unions


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## HaroldCrump

Unions belong to the industrial revolution age - the times of Marx, Lenin, and Trotsky.
These days, esp. in the Western world, they are leading a massive transfer of wealth from the private sector workers (nearly 75% of the workforce) to the privileged public sector (25% of the workforce, give or take).

The net effect of unions (esp. public sector unions) is the exact opposite of what they are claiming.
Instead of equalizing society, they have ensured the creation of a two-tier society.
They have created a wage, benefits, and pensions *apartheid*.

Of course, none of this would have been possible without the complicity of governments - at all three levels.
The unions have created a very powerful and assured vote bank for left and left-of-center political parties.

There is no magic in what the unions have done for the unionized public sector.
They have not created any economic miracle.
All that has been accomplished is a massive transfer of wealth from the private sector workers to the public sector workers.

This is possible simply because of the ultimate constitutional power of the govt. to tax us to death.
There is no marvel, no wonder here.
Taxing private wealth and re-distributing it is a dandy concept that has been around for a long-long time.

What the unions have "achieved" would not have been possible without the massive taxation imposed by 3 levels of govt.
There is no magic in defined benefit pensions, 6 weeks of time off, 20 "sick days", early retirement, full health and extended benefits, expense accounts, and all the other cushy benefits provided to the public sector - it is simply enabled by the power of increasing taxes on the other 75% of the workers.


----------



## kcowan

Retiredguy said:


> When I got my DB pension, it was reduced to 88% when I took the Joint life and last survivor option.


You must have had some unique actuarial stuff going on, e.g. very young spouse.


----------



## MoneyGal

Nah, kcowan; 88% reduction is very normal. Very young spouses are typically excluded from a survivor's pension vs. eligible for a very reduced pension. 12% reduction is ... standard (although there is tremendous variation across DB pensions on things like this)


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## fraser

I recently experienced the same reduction..about 12 percent. My spouse is two years younger than I am. This was for a 66.7 percent survivor benefit.


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## Toronto.gal

HaroldCrump said:


> Unions belong to the industrial revolution age - the times of Marx, Lenin, and Trotsky.
> These days, esp. in the Western world, they are leading a massive transfer of wealth from the private sector workers (nearly 75% of the workforce) to the privileged public sector (25% of the workforce, give or take).
> 
> The net effect of unions (esp. public sector unions) is the exact opposite of what they are claiming.
> Instead of equalizing society, they have ensured the creation of a two-tier society.
> They have created a wage, benefits, and pensions *apartheid*.
> 
> Of course, none of this would have been possible without the complicity of governments - at all three levels.
> The unions have created a very powerful and assured vote bank for left and left-of-center political parties.
> 
> There is no magic in what the unions have done for the unionized public sector.
> They have not created any economic miracle.
> All that has been accomplished is a massive transfer of wealth from the private sector workers to the public sector workers.
> 
> This is possible simply because of the ultimate constitutional power of the govt. to tax us to death.
> There is no marvel, no wonder here.
> Taxing private wealth and re-distributing it is a dandy concept that has been around for a long-long time.
> 
> *What the unions have "achieved" would not have been possible without the massive taxation imposed by 3 levels of govt.
> There is no magic in defined benefit pensions, 6 weeks of time off, 20 "sick days", early retirement, full health and extended benefits, expense accounts, and all the other cushy benefits provided to the public sector - it is simply enabled by the power of increasing taxes on the other 75% of the workers.*


Great post, as usual!


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## avrex

@HaroldCrump +1


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## sags

Given the growing wealth and income disparity........I would argue that never before in history, have unions been more relevant and never has the need for workers to unionize been so great.

Tim Hudak wants "right to choose" union membership legislation, which really means........the right to work at a union shop, collect union benefits, enjoy job security and the right to all the protections under the master agreements,.......... but avoid paying your share of the cost of the union. 

The history of unions........shows that when conditions get bad enough, the people will band together to improve their lives.

I expect history will repeat itself......and unions will enjoy a renaissance, when young people realize how badly they need them.


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## HaroldCrump

sags said:


> Tim Hudak wants "right to choose" union membership legislation, which really means........the right to work at a union shop, collect union benefits, enjoy job security and the right to all the protections under the master agreements,.......... but avoid paying your share of the cost of the union.


I don't agree with Hudak's idea either.
Incidentally, this is not his brilliant original idea.
These types of ideas have been floating in the US since about 2010 or so.

These are nothing other than a reaction to the unfairness and inequalities that unions have created in the labor market.

The mayors and councilors of cities and municipalities there have been demanding legislative changes to enable this, in order to create more jobs, and reduce the payroll taxes (i.e. union dues).

I agree that if someone is receiving the benefits of union protection they should be paying union dues.

However, at the same time, companies should be free to hire non unionized labor.
Unions are creating artificial constraints in the mobility and efficiency of labor.

And above all, the govt. (all 3 levels) should have the right to hire non unionized labor.
They must do so when the cost of non unionized labor is less than that of unionized (which is almost always the case).

It is the fundamental duty of public sector executives as fiduciaries of tax-payer funds.
They have to bargain in the interests of the tax-payers.

The core issue is that the bargaining process is rigged and corrupt - neither the elected representatives nor the executive bureaucracy are bargaining in the interests of tax-payers.



> The history of unions........shows that when conditions get bad enough, the people will band together to improve their lives.


That's right...we need a union of tax-payers.
The CTF is a toothless paper tiger when it comes to this matter.
All they do is produce research reports.

We need a tax-payers union that can bargain with the public sector labor unions like the CUPE.
That would be the true countervailing power.


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## avrex

@HaroldCrump +1


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## pwm

Great post, as usual!

I agree! Couldn't have said it better myself.


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## Beaver101

^ +3 ... particularly


> *That's right...we need a union of tax-payers*.


 :encouragement: :encouragement: :encouragement:


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## Toronto.gal

+10 to Harold for always pointing out facts, not myths.

When I think of current unions: collusion/corruption/disruption/inflexibility/left-leaning ideologies/political influence/strikes/unfairness come immediately to mind, not so much protection of workers [competent or not].

In 1919, there were 1,500 strikes here, probably all valid, but we're not living in the early 1900s anymore, nor in the Great Depression era.

Some make it sound as though Canada were a country without employment & labour laws. :rolleyes2:

High time to free us from unions.


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## fraser

We have one...it is called an election.


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## peterk

sags said:


> Given the growing wealth and income disparity........I would argue that *never before in history*, have unions been more relevant and never has the need for workers to unionize been so great.
> .


Haha really? I think it's fairly inarguable that due to technology and productivity innovation and safety/labour laws (yes, helped in place by unions, but now they're in place for good) that _never before in history_ have workers in all walks of the economy, private and public, had it so easy...


----------



## sags

Interesting point Harold............on having a taxpayer negotiating team at the bargaining table.

On the point of "right to work", I don't disagree that a person should have a choice in joining a union.

I believe that given the option, few people would give up their right to have a representative at the negotiating table. If they believe they can negotiate from a stronger position on their own.........good luck to them, but viewing how large corporations treat their non-union management employees........I was happy to belong to a union, and many of the middle level managers wished they did.

I think this "movement" is the first step towards "banning" union membership, which violates people's fundamental rights to band together for their own common good. 

Unions are not a separate entity.........a third party at the workplace........but are the only representative the employees have. Unions are nothing more than a group of employees banding together to improve their working conditions. Unions are democratic. Members vote for their representatives.........at all levels, from workplace "union stewards" to the national level "representatives"..........all the way to the the national leader. As such, they are voicing the opinions of the majority of their membership........or they would be voted out of office. It isn't frequent that changes are made at the national level.......but at the workplace level changes are made all the time. If workers don't like the way the national office is directing the union, they vote in a convention delegate who represents their views.

Over the years, I worked in unionized workplaces. There were always a couple of people who denounced the union, decried the union dues they had to pay, never attended union meetings or supported the union, but were always at the meetings to announce what the union and company had negotiated and were the first to run to the union representative when they felt they had been wronged by the company.


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## sags

I don't disagree that there is an imbalance between union and non-union workers.

To do so, would be to ignore the wage and benefit differences between the two groups.

It is interesting to note though, that as union membership has declined........workers wages and benefits have also declined.

Experts studying the growing wealth and more importantly.......the income gap, have cited falling union membership as one reason.

Unions do campaign, with the permission of their members, against such things as temporary workers, contract workers, poverty at all levels, pension reform, and many other social issues. They recognize that change can only occur through the political system and therefore fund candidates that represent their views.

Corporations and the wealthy elite contribute far more than union members to politicians, and expect favorable outcomes from those contributions.

Do we want a political system..........where the only advertising in election campaigns represents a one sided view by corporations?

Ban union political contributions........fine..........but ban ALL contributions and influence peddling.

Unions really don't want to spend their members money on political action, but would rather direct it to food banks and other social needs.

But they have no choice.

Somebody has to represent the workers.


----------



## sags

I always get a bit of a chuckle when I hear people say they have confidence their individual "work ethics" will guarantee them a job. The company will "recognize their value" to the corporation and in the case of a downturn......or layoffs forthcoming, they would be protected by their virtuous work.

The reality is that when a corporation is downsizing.......it is looking to cut costs in the most efficient manner.

The highest labor "cost" to the company is with long term employees.

With a union........layoffs occur by seniority. Long term and older employees are protected.

Without a union.........long term and older employees have a target on their back. They are the most expensive.......higher pay, longer vacation, higher health costs.

Ideally......everyone who hopes to enjoy higher wages and better benefits, wants to become a long term employee.........and I doubt they want to have to worry about getting let go..........simply because their longevity with the company has made them a target for disposal.

Union membership gives employees small measure of protection. 

Ask any middle manager who has been tapped on the shoulder on a Friday afternoon, and told to clean out their desk........if they wished they had been a member of a union.


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## HaroldCrump

sags, what you are saying about the _right_ of workers to organize is all fine.
But, consider for a moment - who are the organizing _*against*_, in reality.

In theory, unions claim that they are organizing against evil corporations, against greedy, lecherous capitalists.
But in practice it is not so.
The net effect of this organization is worker against worker.
Unions have only succeeded in pitting 1/4th of the workers against the other 3/4th.

Unions, by virtue of their political influence and vote banking, are able to extract rents from the rest of society - in the form of higher taxes that go directly towards funding a higher level of compensation for them.

If you look beyond the bombastic rhetoric spewed by the CUPE, Unifor, CAW, the USW, etc. they have been completely ineffective against the greedy, evil corporations.
Using a couple of recent examples, the unions were not able to prevent the closure of the Caterpillar plant and the ensuing layoffs, they were not able to prevent the layoffs at Heinz, they were not able to prevent the closure and ensuing layoffs at US Steel plant in Hamilton.

In the end, the inexorable market forces win and companies have to do what they have to do in order to survive and be profitable.

The _only _place where unions have had consistent and ever larger "wins" is the public sector.

In the end, all they have managed to achieve is a two tier society - worker against worker, 3/4ths of tax-payers against the other 1/4ths.

This is not what Marx meant when he said _Proletarier aller Länder vereinigt Euch_ - "Workers of the world, unite".

Today's cushy fatcat, unionized, public sector worker is a far cry from Marx's _proletariat_.

Whatever the original intent of modern post WW-II labor unions might have been, the reality today in countries like Canada and the US is they have simply created a form of _worker apartheid_.

Even if we accept your logic, and take it further, we don't have to look far to see what the logical conclusion of an unrestricted, unfettered labor movement is - you get social structures and a labor market like the one in Spain, France, and Greece (the latter being the most extreme case).
In Spain and France, the labor market is completely dysfunctional - there is no market to speak of.

The market has become completely ossified. There is no mobility, no flexibility, no growth.
Companies cannot re-structure, re-locate, innovate, or literally do anything.

A most recent example is Alcatel Lucent.
The union is holding the company in a death grip.
It won't let them re-structure without extracting massive compensations.
The situation is so bad that the entire company can go bankrupt simply because of the stubbornness and obtuseness of the unions.

This is what happens when the power of unions goes unchecked and unfettered.

I realize you (and many unionized folks) truly like to believe all this rhetoric in your heart of hearts, but that is not how things turn out.

We are, thankfully, not basket cases like France and Spain.
Our benevolent govt. and tax payers have had a very indulgent attitude towards the unions, esp. public sector unions.
But all it has achieved is creating a two tier society where worker is played against worker.


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## sags

But take away the unions, Harold and what do you have left?

A nation of workers totally dependent on the benevolence of the employers?

I don't disagree with your summary of events as they have unfolded, but what would this country look like today without unions the past generations?

Would you want to send your kid into a summer job, working in a factory will no safety regulations?

We see what corporations "offer" their employees. Wage cuts to the lowest level, vacation pay cuts, benefit cuts.........or we will move the workplace.

Take away unions, and they won't even have to threaten to move away the workplace. They can simply replace the workers with others willing to work for less.

Perhaps.........perhaps........if our governments actually devoted their time in office representing the citizens (a myth), instead of those who pay for their election campaigns and fatten their personal wallets, unions wouldn't be needed. We could count on the government to look after our interests.

But that isn't the reality. 

Corporate money.........money from the Koch Brothers, and other billionaires dictate public policy.

After they are elected, members of Congress spend most of their time in office begging the wealthy for money, for the next election cycle.

As Warren Buffet said...........America is becoming a nation of serfs.

Incidentally, Buffet's Berkshire owns Heinz and has stated that the workers will get "very generous" severance packages.

We shall see........what we shall see.


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## fraser

One would be a fool to rely on the benevolence of employers. That is how unions got started.

For many, the health and safety issues took precedence over monetary issues. 

I am not speaking about public sector unions There are lots of other unions other than the public sector ones who do a good job for both employees and employers. Nor do I blame the public sector unions They did their job by getting the best for their members. I blame the elected Governments of the day who signed the agreements. They did not do their job...they acted in the interest of getting re-elected. And we voted them in.


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## nathan79

Like most people I couldn't join a union even if I wanted to. It's kind of ironic that the people who earn the lowest wages and could benefit most from unions don't have the option of joining one.


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## My Own Advisor

13 years into my DB pension at my company. I hope to have it for another 15 years until age 55. Then, will think about retirement at that time.


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## m3s

I say let the companies re-structure and re-locate as Harold wishes. I'll follow the opportunity train right into these other countries that can "do something"

The only problem is, I've been working at a job with deferred income in the form of a db pension and if I leave now, I would only get back what I contributed (not the deferred income) I would basically get a topped up RRSP back, without the tax deferred capital gains I would have accumulated over the years. The government contributions are a clever form of golden handcuffs, deferred income that you only get if you serve your time, not an "economic miracle" by any means. Nobody cried for the public service in the '90s when the government pillaged their db pension surplus and froze their pay. Meanwhile the private sector was booming pre-dot-com. They had the freedom to buy new cars, max out their mortgage, buy tickets to the theatre and eat sushi or top off their own RRSPs. Stats say they chose the former en masse, and yet only now they cry "apartheid"! You're free to join the public service whenever you want, there is no rigid segregation. I chose to join when it was at its low and everyone knew the money was on the private street. It wasn't about the money, it was about the job. I find it pretty appalling now that everyone is envious of the public sector benefits. Vacation, sick days, and health care benefits are prerequisites for happy, healthy and productive workers... companies would do well to benefit from investing in their employees this ways imho. There is no loyalty either way in the private sector, so what do you expect? 

Maybe if less people were looking for excuses online at 9am, just maybe less companies would be looking for the exit. Let the race to the bottom begin!


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## HaroldCrump

m3s said:


> Maybe if less people were looking for excuses online at 9am


mode3sour, apparently the _only_ people "looking for excuses online at 9am" are your friends in the unionized public sector.

_*Appalling rates of public-sector absenteeism must be addressed*_

_*Teacher sick days rising as end of school year nears*_

Are you really sure you wanna take the argument down this road i.e. rates of absenteeism, furloughs, AWOL, lazing-on-the-job, etc.
Because that is one area where the unionized public sector sticks out like Little Jack Horner's sore thumb.


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## HaroldCrump

sags said:


> A nation of workers totally dependent on the benevolence of the employers?


The only benevolence being exploited here is that of the tax-payers.
There is no transparency, no light bring shone on the true cost to tax-payers of maintaining a unionized public sector.

Unionization is not there where it is needed, such as the poor, exploited, suffering workers in Bangladesh can certainly benefit from some organizing and collective bargaining.
Yet, unionization is all over the Canadian public sector, where it is not needed, and where it is doing nothing more than collecting rents from the rest of society.

You guys are speaking of a "race to the bottom"...but have you considered that unreasonable rent seeking by the unions may have _contributed _to the offshoring of jobs to third-world countries?
What has happened in Bangladesh recently (and is happening in Cambodia, Vietnam, etc.) has partly to do with the fact that unions make it hard for corporations to operate in north America and Western Europe.

It is the offshoring of jobs that is responsible for the falling rates of unionization in the private sector in North America.

All that is left are the public sector unions.
To me, those are the most rent seeking ones.
There is no need for unions in our public sector, and it is arguable whether there was ever a need for them to begin with.

Yes, they have managed to "win" substantially higher concession for their "members" vis-à-vis the private sector, but all of that has come at the cost of higher taxes for the rest of society.
That is not an "achievement" in my mind.


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## Beaver101

HaroldCrump said:


> mode3sour, apparently the _only_ people "looking for excuses online at 9am" are your friends in the unionized public sector.
> 
> _*Appalling rates of public-sector absenteeism must be addressed*_
> 
> _*Teacher sick days rising as end of school year nears*_
> 
> Are you really sure you wanna take the argument down this road i.e. rates of absenteeism, furloughs, AWOL, lazing-on-the-job, etc.
> Because that is one area where the unionized public sector sticks out like Little Jack Horner's sore thumb.


 ... +10 x :encouragement: ! 

Looks like the race to the bottom on work ethics has long begun in the unionized public sector. So much value taxpayers are getting. :rolleyes2: x 10!


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## sags

Pulling single statistics out of a full report, doesn't mean much.

Men (7 days) have less days off than women (11).

People with pre-school age children have higher rates of absenteeism than people with no children.

The health industry has the highest rate of full time absenteeism.

Should we pull out those solitary statistics and make assumptions based on them?

The reasons for absenteeism is wide and varied.

It also should be noted.......that Canada lags behind other countries in total days off, including vacation time.

http://www.ibtimes.com/these-countries-get-most-vacation-days-hint-america-isnt-list-758021

Canada is the 2nd "worst" globally in total days off.

http://press.hotels.com/en-ca/news-releases/canada-second-to-last-globally-for-paid-time-off-work/

Here is a link to the full report from Stats Canada.

http://www.statcan.gc.ca/pub/75-001-x/2012002/article/11650-eng.htm


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## m3s

Stats mean very little when they are made by anyone with an agenda to "prove". We probably have some of the best schools and government in the world. Ignoring that end result, you're just crying poor me, poor me! Why don't I get that many sick days too? Chopping down the schools and government won't do any good for the foundation of our economy.

Germany has unions and even more socialist programs then some of the struggling European countries. They take a 2 hour lunch at minimum and at least double the vacations that Canadians do and sick days whenever they are sick. You can bet that is both public and private sectors. They don't try to compete with Bangladesh or Cambodia's bottom line, they do something that Bangladeshis and Cambodians don't do. They are highly skilled thanks to public funded schooling and they work very productively as a culture (note that working miserably every day all day and posting about how others should have to work all day too =/= equal productivity) I would rather see Canadian companies mandated to share some profit. Maybe that would align some Canadian worker's goals with their companies, and the motivation would translate into more profits for all. Dispelling the myth that simply being at work is more productive, looking at the big picture (profits for private sector) and getting off the race to the bottom might avoid the pain we are headed for. The difference between Germany and Italy and Canada is not absenteeism or socialism, it's a culture of having something to prove to everyone instead of having everyone else to blame. Canada can't compete with Bangladesh or Mexico any more than Germany can. (And I'm not pointing at people here specifically, but I've noticed this is a huge trend in some countries... people at work all over the internet... complaining that others are lazy with all their "time off")

The public service had not actually "won" anything vis-a-vis the private sector. They actually bartered away future benefits to raise present incomes. Really all this did was benefit those who were about to retire. The rest agreed because they are near sighted and want to buy new cars and toys today just like the private sector does. Whatever your source, it's clearly one sided.

You can look for excuses for the plight of the Canadian worker. Woe is me. Truth is, there is money out there for those who do something to get it. Vacation, sick days, health care, schooling and other benefits are proven to help productivity, not the other way around. Cambodia and Bangladesh already beat us at this race, so we should find another competition.


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## fraser

I think that there is a good deal of pension envy out there-especially since the baby boomers are aging.

I had several colleagues who remained in the public service for their working lives. Their salaries and take home pay were less than others in the same field who worked in private industry. In some instances, as much as 30 percent less. As a result, their lifestyle was not as 'consumer rich'. Why...simply because part of their compensation package was deferred in the form of a DB pension plan. I certainly do not begrudge them their pensions. They earned them and contributed to them.
My DB pension is not as rich however I did not contribute a dime toward it and I certainly enjoyed a higher take home pay during my working years. But I saved and invested instead of buying a new car or new furniture every three years.

Our economy is changing rapidly. Ontario and Quebec will feel it most simply because productivity in Canada is declining and public debt in those provinces is at an all time high. We may be producing the same amount of automobiles in a plant, but to be competitive we are doing it with less people and more technology. This is one of the reasons why unions are loosing membership/funding. High productivity is the key to higher compensation.


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## hystat

sags said:


> I always get a bit of a chuckle when I hear people say they have confidence their individual "work ethics" will guarantee them a job. The company will "recognize their value" to the corporation and in the case of a downturn


the company didn't when I was downsized, but the customers of the company were calling me before I got home.


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## HaroldCrump

For the Canadian public service workers (CUPE, etc.) to use terms like _race to the bottom_ and _pension envy_ smacks of _champagne socialism _and _why-can't-they-eat-cake_ syndrome.
After having hogged superior privileges themselves on the back of tax-payers for decades, it is mighty fine of them to speak of race to the bottom.
What race to the bottom are they talking about?
They are perched at the very top of the workforce.

It is simply misdirection and subterfuge on their part to point to a small handful of private sector CEOs and executives whenever the topic of compensation comes up.

How about we invert the terminology and instead of pension envy, we talk about rent-seeking.

Anyhow, what would the Canadian public sector workers like to see happen?
- Keep increasing their total compensation at far above inflation rates and private sector norms?
- Maintain status quo, obfuscate the true cost to society, and misdirect the conversation whenever it comes up?
- Have the govt. legislate all private sector companies to pay public sector like benefits to their employees?
- Have the govt. undertake a massive expansion of the social entitlement programs incl. OAS, CPP, minimum wage, guaranteed minimum annual incomes, etc. funded by raising taxes even more?

Side note to @fraser - yes, the DBPs are deferred compensation, of course. The issue is not whether this compensation is current or deferred. The issue is that _total, lifetime_ compensation in the Canadian public sector is too high. Not high based on market demand/supply, but simply rigged by the unions and appeasing governments.


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## Toronto.gal

At present, there is a parasitic & fundamentally anti-democratic side to unions; and those who like describe non-union people [critics] as 'envious', don't understand the meaning of outrage, let alone Economics.


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## leoc2

fraser said:


> I think that there is a good deal of pension envy out there-especially since the baby boomers are aging.
> 
> I had several colleagues who remained in the public service for their working lives. Their salaries and take home pay were less than others in the same field who worked in private industry. In some instances, as much as 30 percent less. As a result, their lifestyle was not as 'consumer rich'. Why...simply because part of their compensation package was deferred in the form of a DB pension plan. I certainly do not begrudge them their pensions. They earned them and contributed to them.
> My DB pension is not as rich however I did not contribute a dime toward it and I certainly enjoyed a higher take home pay during my working years. But I saved and invested instead of buying a new car or new furniture every three years.
> 
> Our economy is changing rapidly. Ontario and Quebec will feel it most simply because productivity in Canada is declining and public debt in those provinces is at an all time high. We may be producing the same amount of automobiles in a plant, but to be competitive we are doing it with less people and more technology. This is one of the reasons why unions are loosing membership/funding. High productivity is the key to higher compensation.


+11 :encouragement: (That's binary 3)


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## fraser

I do not think that making broad brush statements is the most accurate way to portray civil servant work ethics, civil servant wage and total compensation packages vs. private industry, etc. It is easy to do and it is as popular as bashing Air Canada or CBC however it is often far off the mark.

There are no doubt challenges in some job categories, vocations, but clearly not all. Nor are all civil servants union hugging, work to rule, lazy layabouts looking to get everything for nothing. It creates a very false impression. Public servant DB contributions are increasing. For many, the contribution rate is 10-14 percent of salary. A significant amount.


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## pwm

This from the Ottawa Citizen: _Some of the biggest abuses of sick leave in the federal public service come from long-time employees who use their banked sick leave on the eve of retirement and managers who do nothing to stop them, say experts who follow the issue. At last count, Treasury Board estimated 15 per cent of public servants accumulated more than 34 weeks of sick leave and the average among this group had 61 weeks of banked leave. The retiring cohort used an average of 18.3 sick days two years before they retired and 44.6 days the year of retirement.
_
http://www.ottawacitizen.com/manage...s+abuse+sick+leave+experts/9225006/story.html

I worked in the private sector for 35 years, and I took two sick days that I can remember. There was no such thing as "sick leave". What's happening with the federal civil servants is a disgrace.


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## pwm

This from the same article: _Public servants get 15 days of sick leave a year which they can accumulate and carry over year to year. _

I was just thinking: I took 2 days off so (15 X 35) -2 = 523 days. I could have retired 1.4 years earlier if I had worked for the government.


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## HaroldCrump

Banking of sick days was a central issue in the summer 2009 strike of unionized municipal workers in Toronto, esp. the garbage pick-up staff.

Yes, they managed to negotiate a 9% or so increase as a result of the strike, which was - shall we say - about 4x times the rate of inflation.

But the central theme was the ability to carry-forward their sick days.
Sick day banking is a central theme in many public sector union strikes over the years, incl. several Ontario teachers strikes.

http://www.cbc.ca/news/canada/toron...omes-pivotal-issue-in-toronto-strike-1.826984

_The Canadian Union of Public Employees workers on strike in Toronto earn 1.5 sick days every month. If they don't use the days, they go into the bank. 
That could amount to *18 days a year*. 
When he or she retires, a unionized worker with 25 year's experience can *cash those days out for a maximum of a six-month bonus*.
...
Just last year, Public Service Alliance of Canada workers walked off the job at Canada Post when management wanted to wind down their leave bank.
...
Elementary Teachers of Toronto are another of the many groups of unionized workers with the ability to bank unused sick days and receive a payout upon retirement. "Then the teacher will receive half a year's salary as a final pay-out," says a statement on the ETT website._

"Sick days" are nothing more than yet another form of deferred compensation.
It has nothing to do with sickness or health...it is just a tax-deferred form of compensation.

In fact, there is so much of this so-called "deferred compensation" going on that I don't know if there is anything current anymore...everything appears to be deferred.


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## pwm

_"Sick days" are nothing more than yet another form of deferred compensation._

How right you are Harold.

"Sick days" are just another paid vacation day for public employees. They can just add 15 more days to the already generous vacations they are entitled to. It's time to end this scam which has been perpetrated by the public service unions.


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## Toronto.gal

How many rich 'non-wage benefits' are there?

'Public sector unions may prefer to see governments as amorphous cash dispensers. They are not. Governments are stewards of tax revenues for Canadians, who know unfairness when they see it.'
http://www.theglobeandmail.com/repo...ning-fairness-gap-is-exposed/article10837039/


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## HaroldCrump

The CBC article above about the 2009 Toronto municipal union strike about sick day banking states:

_Critics say Toronto's problem is that it hasn't set aside enough money to pay for those future benefits.
"It's $250 million [liability] for the City of Toronto," said Coun. Doug Holyday. "*We simply can't afford that any longer*."_

^ my bolding above.
All of these nanny state benefits are unaffordable now, and it is arguable whether they were ever affordable to begin with.
This trend was started mostly by Pierre Trudeau in his misguided attempt to implement a Canadian version of Lyndon Johnson's _Great Society_.

All we have to show for those decades of union pandering and appeasement are deficits, debt, and militant, over-entitled, arrogant public sector unions.

There is a CFIB report titled _Canada’s Hidden Unfunded Public Sector Pension Liabilities_ that attempts to estimate these off balance sheet costs for future Canadian workers.
A Google search should find the report, but the numbers are in hundreds of billions.

It is not a _retirement crisis_ that we face - we are facing a _tax-payer's crisis_ to pay for all these early retirements, bridge benefits, banked sick days, guaranteed, 100% inflation indexed pensions, etc.
There just aren't enough tax-payers in this country to pay for all this anymore.


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## Retired Peasant

I don't get this banking of sick days - I don't think it's 100% in the public service. I used to work in the provincial public service (Ont.). We got 6 sick days a year; these could not be banked for future years. I only took sick days when I was sick (maybe 7 days over a 15 year period). Contrary to what you might think, very few people took all 6 days, every year - I never knew anyone that did this.


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## hystat

no bank of sick days in my public job. In fact, no sick days really. I mean... you can take them, but no one does your work when you're away. (no one knows how) It will just pile up on your desk. We all come in when we're sick. There are 2 or 3 hacking away here today. The boss hands out bottles hand sterilizer. I suppose the government paid for them so should probably write to your MPP.
Same with stat holidays, we have to make up the time. 
Number of days I have missed in 10 years is approx. 4 when I had pneumonia.

Just looked it up in our collective agreement. Looks like cumulative sick days went off the table in 1991.


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## MoneyGal

You do understand, though, the collective ire when teachers are retiring with a six-month bonus associated with carrying over sick days? In fact, why wouldn't you share in that ire?


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## Toronto.gal

MoneyGal said:


> In fact, why wouldn't you share in that *ire?*


That's what it is, not envy, and wondering the same question.

Article after article talks about it, so not sure what is it that some don't get?
http://www2.macleans.ca/2013/06/25/the-sick-day-scam/


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## fraser

I do not agree with allowing the accumulation of sick days to be taken on retirement.

But that is not an issue with the public service DB plan. My understanding is that it is a benefit, completely outside of the DB plan.


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## sags

Blame the bean counters who calculated it was better to agree to a future benefit........20 years down the road, to save money at the time.

Now the debt has to be paid...........people are complaining about it...........but they are 20 years too late.

Where was the CFIB and all the other critics back then?

Encouraging the government to keep current costs down........leading to the deferring of benefits..........I suspect.

It is like those who demand municipal tax increases are 0%. Who do they think is going to pay the cost of infrastructure later?


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## sags

Perhaps if Canada wasn't the second worst developed country in the world........for time off work, people wouldn't need so many "sick" days.

I thought the "vision" for the future was more time off........more time with family.......the 32 hour work week.

Isn't that what technology and increased productivity was going to give us?

Instead we got, fewer jobs and those working spending more hours at the workplace.

Productivity went up.......wages didn't........and expectations are for people to work more hours every week......until they drop dead on the job.

Do we live to work..........or work to live?

I say.........kudos to the public service unions, for recognizing what is important for their members.

Maybe all the time off........is why teachers tend to live longer and healthier than the average.


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## fraser

I think that once again people are broad brushing. Teachers in your area may indeed have the sick time accumulation benefit however this is certainly NOT a consistent benefit across teachers in all Provinces or indeed provincial/municipal/healthcare employees in across all provinces.

It is certainly true for federal employees. It is not necessarily true for other provincial/municipal/healthcare workers in other provinces.


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## Retired Peasant

MoneyGal said:


> In fact, why wouldn't you share in that ire?





Toronto.gal said:


> That's what it is, not envy, and wondering the same question.


I do share in the ire, but it seems to me that there were quite a few who were pegging this on ALL public servants - it just isn't true.


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## nathan79

sags said:


> I thought the "vision" for the future was more time off........more time with family.......the 32 hour work week.




Well, how could anyone afford to buy a new tablet, iPhone, and designer clothes every year on a 32 hr work week?

Technology was never intended to make us work less -- it's supposed to make us consume more.


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## m3s

HaroldCrump said:


> For the Canadian public service workers (CUPE, etc.) to use terms like _race to the bottom_ and _pension envy_ smacks of _champagne socialism _and _why-can't-they-eat-cake_ syndrome.
> After having hogged superior privileges themselves on the back of tax-payers for decades, it is mighty fine of them to speak of race to the bottom.
> What race to the bottom are they talking about?
> They are perched at the very top of the workforce.


When there was a deficit in the 90's, the government reacted by slashing the public services. The number of employees was reduced drastically and pay freeze for those who stayed. In the 00's the government had to play catch up and hastily replace what had just been trashed. Wages were increased to slow the attrition of experience after being frozen for nearly a decade (so of course it was more than annual inflation!..) Jump to recent years we have another deficit. Severance packages were abolished, pension contributions increased significantly, length of service increased, and more cuts to come. I don't really see the public services as having moved much ahead, but I saw the damage from the 90's.

Aren't we just "fighting the previous war" here. Has the public sector grown fat and happy, or is the private sector in a worldwide slump? Who is really misdirecting who? How will small government ease the growing wage disparities in the private sector? The private sector is the one in a "race to the bottom" rather than a public service "race to the top". To be fair, many governments are in similar but far worse crisis with these future benefits. There is caution not to overreact and get into the same mess as before. I don't see our government's intention to ever "perch the public service at the very top". I see the world rebalancing out of our government's control, and beyond our short political outlook.

The misuse of benefits is something for the media to sensationalize, but these types of benefits are inherent to a public sector not driven by profits. The public sector leans more towards team work and equality whereas the private sector is more about cut-throat competition and disparity. You can't really compare the two, but each affects the other. Is the public sector being over compensated, or is the wage disparity in the private sector spreading too wide? I do see cuts in the public sector, however I don't see any easing of this income disparity in the private sector. Aren't the low skill jobs just going to keep moving away? Wait aren't there lots of companies making lots of money in Canada?...




HaroldCrump said:


> It is simply misdirection and subterfuge on their part to point to a small handful of private sector CEOs and executives whenever the topic of compensation comes up.
> 
> Anyhow, what would the Canadian public sector workers like to see happen?
> - Keep increasing their total compensation at far above inflation rates and private sector norms?
> - Maintain status quo, obfuscate the true cost to society, and misdirect the conversation whenever it comes up?
> - Have the govt. legislate all private sector companies to pay public sector like benefits to their employees?
> - Have the govt. undertake a massive expansion of the social entitlement programs incl. OAS, CPP, minimum wage, guaranteed minimum annual incomes, etc. funded by raising taxes even more?


I think we can agree on none of the above. I agreed all along that private incomes are too low, but I don't agree that the answer is to decimate the public sector. I certainly agree not to raise min wage, CPP or taxes. Nothing can be done about the runaway housing market that inflated cost of living, so how do you want to cut pay? What I would like to see happen is for private sector employees to earn a bigger chunk of the profits they contributed to, that is all. Not forced saving (CPP) not forced income (min wage) not forced taxes, but relative rewards for those who contributed to other's wealth. If we're just going to hack the public service foundation to follow the private sector down, then yes Canada is in a race to the bottom.


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## m3s

Toronto.gal said:


> Those who like describe non-union people [critics] as 'envious', don't understand the meaning of outrage, let alone Economics.


Why do you like to throw little jabs all over the forum as if to subtly belittle other's intelligence. If you don't agree with a different opinion then give yours and they will happily argue the topic. If you don't like someone then keep the constant rolly eyes to yourself, this is the internetz. People are trying to bring another perspective to a discussion. I know public service workers are often envious of what they could make and many happily switch. I'm pretty sure lots of people are envious of the db pensions as well. I would be.



Toronto.gal said:


> Article after article talks about it, so not sure what is it that some don't get?


I actually do share in the frustration. Thing is when you make a rule, people get fixated on it. Driving 120kmh in poor visibility is not technically speeding, but people will drive that fast anyway. Some people are outraged that the teachers use all their sick days every year, and others are outraged that they bank them. They probably save them in case they're needed more later, but they take what they get. Maybe this benefit is wasted on a few, but I bet it helps the mental stability of others over 35 years. Me without kids and I'm the one who sees the real impact here...

For the record my pay is public service plus a % to do whatever/whenever/wherever I'm told. I can take as many sick days as I want, because you probably don't want me crashing tax purchased jets into your family's airliner if I didn't. A sick day for me means a chance to do paperwork, and I've done that from a hospital bed. Some Euro colleagues get €200 benefit per day to do the same thing, plus overtime. My db pension has become significantly more handcuff and less golden over the years. The raises are not raises, all things considered.


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## HaroldCrump

sags said:


> Blame the bean counters who calculated it was better to agree to a future benefit........20 years down the road, to save money at the time.


It wasn't the bean counters...it was the blackmail by the unions.
We have granted unions a legal, legislated right to blackmail the tax payers.

The Ontario teachers are an example.
First they cancel extra curricular activities, homework, etc. and finally cancel classes - all in order to gain outrageous benefits like sick leave banking.



> Where was the CFIB and all the other critics back then?
> Encouraging the government to keep current costs down........leading to the deferring of benefits..........I suspect.


You are right that deferring benefits simply kicks the cans down the road.
But what has enabled this situation?
By giving public sector unions the legislative authority to blackmail tax payers in order to extract concessions.

Let us clarify one other thing as well - we are not talking about fundamental workers rights, like safety, sick leave, some paid vacation, etc.
We already have that...have had for over 6 decades.
We are talking about negotiating gold plated benefits.


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## HaroldCrump

sags said:


> I thought the "vision" for the future was more time off........more time with family.......the 32 hour work week.


That has already happened...what are you talking about?
The Canadian public sector, for the most part, has a 37 hour work week.
In the private sector, 40 hrs. is the standard norm.
Whereas most public sector, crown corp, agencies, and other quasi public sector has 37 hrs.
They have more holidays as well.

What you are asking for is already there....think back to the industrial age, and the pre WW-II period.
Folks worked all 7 days.
12 hour days in the factories, mines, mills, and other sweatshops was the norm.
There were no official "vacations", let alone sick time.

The reduction in working hours as a result of productivity, technology, and innovation has already happened.
The future is already here, sags...

As for "family time", oh well, whose fault is it if people _choose _to spend their personal time goofing off on Facebook, Twitter, etc., watching stupid, asinine shows on TV, and playing violent video games :rolleyes2:

Therefore, the leisure time that you think people should have, is already here - except that it is being spent on all these frivolous activities.



> Maybe all the time off........is why teachers tend to live longer and healthier than the average.


Jane Austen wrote in _Sense and Sensibility _over 200 years ago:

*"If you observe, people always live for ever when there is an annuity to be paid them." *


----------



## sags

I like you Jane Austen quote.........

I always maintained that if you are older........and want to slow down the hands of time, simply take out a 96 month auto loan, put all the payments down in a ledger and cross them off every month as you pay them.

They will be the longest 8 years of your life.


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## MoneyGal

The annuity in Jane Austen's time was a regular payment of *rent* paid to landowners - slightly different concept!

But here's another fun annuity tale from history: http://www.thinkadvisor.com/2013/10/28/milevskys-tales-from-annuity-history-a-most-curiou


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## sags

Wow......what a neat story.

So Shakespeare had the time and money to pursue his passion, from an annuity.

The "tontine" concept looks good........except for the part about not leaving anything to survivors. The widows and children would pay the price.

There is also the "wolves" theory in play..........and it is a real threat.

My grandfather and his one buddy worked for the CPR. They both loved the outdoors.......hunting and fishing.

The decided to buy a cottage together, and bought a small island north of Parry Sound..........near the rail line so they could travel the freight train to and fro with their CPR train passes.

They built a cottage they enjoyed with their kids, until they met a much younger beer buddy.

One night, no doubt over drinks in the cottage, he broached the subject of "buying in" to the cottage.

For some unknown reason, they all agreed to each owning one share, with the remaining survivors able to buy out the share of any deceased partner for the original cost of $300. (we later learned from my grandfathers notebook that the guy actually borrowed the $300 from my grandfather to buy in.......and there was no notation of every paying it back, although he claimed he did and my grandfather forgot to write it down).

A year later, my grandfather suffered a stroke and ended up as a ward of the Public Trustee in an Ontario mental hospital. He wasn't there long.......but long enough for the other two partners to have him declared "legally dead" and buy out his share of the cottage for $300. The Public Trustee accepted the arrangement, despite pleas from my father.

My grandfather came out of the hospital and lived well with my folks for another 10 years, but none of us were ever allowed to visit the cottage again.

As karma would have it........the youngest guy died of a heart attack and his family took the remaining survivor (my grandfather's original partner) to court and lost, subject to the "last survivor agreement" signed.

Many is the time, that I sat just off in the island looking at the cottage, with a full tank of gas for the outboard motor, and a book of matches in my pocket.......thinking I should just torch the place. And I would have, except for the fear the fire would spread into the forest out of control.

Tontines are interesting............but they have that fatal flaw. Nobody wants to give their family's inheritance away.

I think that is the hill that annuities have to climb.......before widespread acceptance will occur.


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## Toronto.gal

MoneyGal said:


> The annuity in Jane Austen's time was a regular payment of *rent* paid to landowners - slightly different concept!
> 
> But here's another fun annuity tale from history: http://www.thinkadvisor.com/2013/10/28/milevskys-tales-from-annuity-history-a-most-curiou


Thanks for posting *MG!*

*Harold:* nice quote!


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## sags

Given the story about Shakespeare's annuity..........it puts a different viewpoint on some of his quotes........

Maybe he was getting hit up for a loan........?

“Neither a borrower nor a lender be, for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.”

― William Shakespeare, Hamlet


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## HaroldCrump

Here is a new scathing report by the Ontario Auditor General on the OPG and OPA pension plans.
It is evident beyond a shred of doubt how outrageous these pension plans are.

This report reads like a horror story for the tax payers.
_There is a systematic, planned looting of the tax payers going on for decades._

Not just about the pensions, but expense accounts, overtime policy, fake severance packages, and other off-book "benefits".

_*Ontario auditor’s report to take aim at power utility’s plum pensions*_
http://www.theglobeandmail.com/news...power-utilitys-plum-pensions/article15837306/


----------



## humble_pie

sags said:


> ... none of us were ever allowed to visit the cottage again ... Tontines are interesting............but they have that fatal flaw


isn't there a movie about the last 2 survivors of a tontine consisting of a group of lifelong male friends, a brotherhood of sorts.

the final 2 meet as very old men & realize to their sorrow that only one of them will end up the winner, but to no avail.


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## Toronto.gal

Shocking auditor's report, NOT!

Those plum pensions @ an employer/employee contribution rate of 4:1 to 5:1.

*'Some OPG employees retired, received lump sum pension payments, then went back to work for OPG on contract.'*. :rolleyes2:
http://www.theglobeandmail.com/news...-at-ontario-power-generation/article15854716/


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## HaroldCrump

The decadence - the egregious greed - of the self-entitled public sector is just oozing from that report.

_62 per cent of OPG’s employees earned more than $100,000 last year, the audit found. 
The number of employees making over $200,000 has ballooned to 448 from 117 since 2003._

2003 also happens to coincide with the resurgence of the public sector unions, ably coddled, cuddled, and fondled by the Ontario Liberal administration.
Half of that period (2008 onwards) also happens to be a period of punitive increases in hydro rates in Ontario, all under the pathetic excuse of providing "green" energy.

I guess now we know where that money has been going.

Firing 3, and only 3, executives does not even begin to correct the corruption going on in there.
Those 3, along with the CEO, and other top executives ought to be charged with appropriation of public funds, and tried in a court of law.

Similar audits should be conducted at other public sector departments, crown corps, and agencies.
Next stop should be the OPA, the OEB, followed by Metrolinx, Ministry of Health, and so forth.

Didn't someone else post on the _Markets Rigged_ thread earlier today that we need a Canadian version of _American Greed_.
Well, this can be Season 1, Episode 1.


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## fraser

I am told by people in the industry that OPG, Hydro One, and Ontario Hydro management teams have been a long standing joke within the industry for the past 20 plus years. No surprise to me.


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## uptoolate

Wow on OPG. The report said that pensions ranged up to 760,000 per year. No doubt indexed. Come on, really?!


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## GoldStone

Think of an average worker in the private sector. No pension of any kind. No employer matching. RRSP tax deferral is the only help you get. That's one end of the spectrum.

OPG is the other end of spectrum.

Now think where an average DB-pensioned civil servant stands. Are they closer to unpensioned folks in the private sector? Or are they closer to OPG?

I say it's the latter. *That* is the real outrage. Not OPG.


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## My Own Advisor

Wow on OPG is right.

DB pensions are one thing, crazy, greedy DB pensions are another.


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## Eclectic12

GoldStone said:


> ... Now think where an average DB-pensioned civil servant stands. Are they closer to unpensioned folks in the private sector? Or are they closer to OPG?
> 
> I say it's the latter. *That* is the real outrage. Not OPG.


Really?

Better average DB pensions for civil servants out weights special arrangement items such as:
a) no reduced pension for retiring before age 65
b) two years pension service credited for each year worked, later upgraded to three years credit per year worked
c) performance bonuses counted as income (and pension eligible).

Never mind leaving the job stood to give a $6 million payout, with the potential of a $1 million pension *annually*.
With the changes Ontario made, the annual pension being collected is something just over $307,000.


It only takes a few executives like this to make up for a lot public servants ... never mind that apparently the average pension income for Hydro One back in 2005 was 2.2 times the national average. 


Numbers would make for a better evaluations but with such extravagance, I'm not sure it's that clear. 


Cheers


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## Eclectic12

Toronto.gal said:


> Shocking auditor's report, NOT!
> 
> Those plum pensions @ an employer/employee contribution rate of 4:1 to 5:1. ...


Never mind Hydro One signing the CEO where two years pension service was credited for each year worked, later upgrade to 3:1, back before 2000.


Cheers


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## sags

I read the auditor report as an attack on executive and upper management pay and perks,...... not unionized workers.

As stated in the report..........CEO and executive pay, bonuses, and largesse, continued unabated, despite 1200 people being laid off.

The layoffs created unbelievable amounts of overtime pay for those remaining......to conduct inspections and maintenance work.

Poor and greedy management..........not a new concept.


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## Eclectic12

sags said:


> I read the auditor report as an attack on executive and upper management pay and perks,...... not unionized workers.


You must have skipped over ...



> The agency’s workers also have far more generous pensions than other public-sector employees, contributing just one-quarter of the cost.


and



> Employees also received other benefits, Ms. Lysyk wrote, including moving costs. One OPG employee transferred between offices was handed $392,000. Another transferred from Toronto to nearby Pickering and got $80,000, even though the employee actually moved further from the Pickering site.



Certainly the management level is getting a high level of press but it definitely including the workers.


Cheers


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## Toronto.gal

Also, 62% of OPG’s employees were on the Sunshine List.

Oh wait, but that list [salary] is very old some might think.


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## HaroldCrump

Toronto.gal said:


> Oh wait, but that list [salary] is very old some might think.


That list is updated every year.
Also, that list is highly understated, if anything.
It includes only base salaries, not bonuses, which are very significant in the crown corps. like OPG.
It does not include many other off book benefits like bottomless expense accounts.

The true list has got to be several x times larger.


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## Toronto.gal

^ You're right on all accounts Harold.

What I meant, is that the SL began in 1996 @ $100K, hence my comment that some may think/say that the $100K should have been increased by now. The question of course, is how many employees deserve such a base salary today? 62%? Of course not!


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## Eclectic12

Toronto.gal said:


> ... The question of course, is how many employees deserve such a base salary today?
> 62%? Of course not!


Is there a followup that spells out that this is base salary (or maybe details in the auditor's report)?

The links I've seen so far talk about "earned" which may include overtime.


Cheers


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## MoneyGal

From the Finance Minstry site: http://www.fin.gov.on.ca/en/publications/salarydisclosure/pssd_info.html

WHAT'S INCLUDED IN $100,000 SALARY?

The $100,000 figure means salary before taxes, and does not include taxable benefits. However, for those who are paid $100,000 or more, the total value of these taxable benefits must be disclosed. Beginning with 2012 salaries, the definition of salary now also includes per diems and/or retainers paid to employees, in addition to amounts reported as employment income on the Canada Revenue Agency T4 slip. The act does not authorize employers to disclose what the specific benefits are.


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## HaroldCrump

Toronto.gal said:


> The question of course, is how many employees deserve such a base salary today? 62%? Of course not!


From the same report:

_The number of employees making over $200,000 has ballooned to 448 from 117 since 2003_.

^ howzatt for a gravy train....


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## sags

Why did the Liberals and Conservatives join together to vote down an NDP proposal to cap public service salaries?

http://www.theglobeandmail.com/news...ill-to-cap-public-sector-pay/article15665401/

Agreed.........it was mostly a symbolic first step, and not perfect in any regard..........but a small step in the right direction, sending a signal that more was to come........and yet defeated by the Liberals, with the support of the PC party.

Reform of the public service...........Are they in.........or are they out?

I think they just want to "talk" about it.


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## Toronto.gal

I just finished reading the full report; some details were pretty nauseating. 

http://www.auditor.on.ca/en/reports_en/en13/305en13.pdf


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## sags

Thanks for the link.

Other than the pensions........which presumably would include unionized employees, the report appears to focus mostly on a "top heavy" management corporation.

Even while laying off workers on the floor, the size of upper management was increasing, their pay and benefits were increasing, and their staffing and scheduling decisions were causing high levels of overtime at premium rates of pay.

I am all for taking a hard look at the public service.......from the top down to the bottom.

This report clearly started at the top..........which is a welcome first step.


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## Daniel A.

Being following this thread for some time.
You know there really comes a time when people that have a DB pension and are OK need to speak up.

I put in over thirty years for a employer with my DB pension the carrot do I feel bad NO not at all I do understand that many today don't have such a thing YES.

I really don't know how people will cope without a solid pension, I can travel someplace warm in winter most can't.
In many ways people loss sight of the fact that some of use took a chance and hoped for the best.

How things were thirty years ago or even twenty years ago has changed much.

It is only in the last 10-15 years that the question of pensions has come to the forefront.
The future just is not predictable anymore we all hope for the best.

I know there is much resentment about public pensions and fair.
But in private pensions people really don't understand the picture.
I was lucky no more than that, I was not some genius I just took a chance and hoped for the best.


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## My Own Advisor

Fair comments Daniel A.

I have a DB pension, wife has DC.

There is indeed much resentment and often jealously over DB pensions. Much of it is justified. There are also some very highly paid private sector employees making great money and that type of monetary compensation is often overlooked in these debates.

The problem with generalizations is, they are generalizations.

Even though I am fortunate to have a DB pension, 12 years into it in fact, I would have no problem if they take a hard look at the public service pensions across the board and make some changes to become more inline with the private sector.


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## HaroldCrump

The ire against public sector DB pensions is often misunderstood as jealousy and resentment.
It is nothing more than anger against over-compensation in the public sector.
It is not just about the pensions, but other forms of egregious over-compensation, such as unusually generous vacation time, "sick" time, expense accounts, etc.
The pension plans themselves are far more generous than the vast majority of private sector DB plans, and contain features such as full indexation, (very) early retirement provisions via bridge to full pension, etc.

Lastly, the % of employee contributions required are too low, as the OPG examples above show.
The burden on the tax payers is far too much.


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## GoldStone

My Own Advisor said:


> There are also some very highly paid private sector employees making great money and that type of monetary compensation is often overlooked in these debates.


Ummm, this is a red herring.

Income inequality in the private sector is in the forefront of public discussions. CEO compensation in particular. But, it's a separate debate. It has nothing to do with the fairness of the public DB pensions.

Public unions love to bring up the subject of CEO compensation. It's a diversion tactic.


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## My Own Advisor

I'm not talking about CEOs. I'm talking/writing about specialists and management in the private sector. People seem to forget many employees in these positions are making good 6-figure salaries.

I'm not ignoring that public sector pensions aren't an issue, but folks need to have a broader perspective. Just my thoughts...

Also, hard to deny OPG is not an utter mess.


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## HaroldCrump

My Own Advisor said:


> I'm not talking about CEOs. I'm talking/writing about *specialists *and management in the private sector. People seem to forget many employees in these positions are making good 6-figure salaries.


Right, so _*specialists*_ in the private sector are making 6-figure salaries.
However, in the public sector, once you include the deferred compensation items such as DB pensions, even rank and file workers are making well into the 6 figures.

For instance, TTC drivers, ticket collectors, tenured posties, OPP traffic ticket collectors, etc. are all in the 6-figure income range, without having any specialized or management skills.

You have to go fairly high up the ranks of management in the private sector to come even close to total compensation that is paid out in the public sector at much lower levels.


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## MoneyGal

_Private sector_ employees. Accountable to _owners and shareholders_. Not paid out of tax revenues. I don't give a hoot what private employers do to compensate their employees. Why would it be any of my business? Conversely, why would someone think that compensation of public sector employees is *not* my concern?


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## sags

"Average" public servant salaries were just under $70,000 per year, not including benefits

A previous study included the cost of all benefits.........which made it $114,000 per year.

Of course, the "average" is skewed by the wages of those at the top, so many public servants would earn less than "the average".

http://www.ctvnews.ca/politics/real...ually-stagnant-over-last-decade-pbo-1.1490736


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## HaroldCrump

sags said:


> "Average" public servant salaries were just under $70,000 per year, not including benefits


Average salaries in Canada are $47,200 as per the 2013 StatsCan results.
So, if you want to play the averages game, then it is evident that public sector workers _on average_ are making nearly 50% more than the overall _average_.



> A previous study included the cost of all benefits.........which made it $114,000 per year.


OK, so you are saying benefits account for over _*60%*_ of the total compensation for public sector workers ($114K - $70K)?

Therefore, the _total_ compensation for the _average_ public sector worker is *141% *higher than the average non public sector worker making $47,200.

And since we are speaking in averages, that average of $47,200 _includes_ the public sector workers making the $70,000.
If you take out the entire public sector, average compensation in the private sector will probably drop substantially.


----------



## MoneyGal

Surprising how all those super-highly-paid private sector workers aren't pulling up the average!


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## m3s

MoneyGal said:


> _Private sector_ employees. Accountable to _owners and shareholders_. Not paid out of tax revenues. I don't give a hoot what private employers do to compensate their employees. Why would it be any of my business? Conversely, why would someone think that compensation of public sector employees is *not* my concern?


True. _Private sector_ employees tend to be concerned about what they get for themselves and their families. This includes what they get from their employers and from their taxes, for themselves, in comparison to others. What other private sector employees earn is none of their business. Unless, of course, they are getting more for less (private or public sector) irregardless of the reasoning or shifting of global markets and demographics etc. Someone else getting more for less is a personal concern, whether they are _accountable_ to you or not, right?

OTOH _public sector_ employees should have a bigger outlook than money. They are tasked with being concerned about society and how all employees are treated whether private or public. They are responsible for regulating and enforcing safety, environment, well being, human rights and other civil things besides profits. They don't have much input into what they are paid to encourage more team effort than competition. They are accountable to tax payers to provide a livable society, no? I'm not sure why ticket sales people and hydro workers ever got on this side of the spectrum..

What happens when riot control starts the riot? What causes corruption? What causes defection? Chaos? These are some reasons Romans started to pay pensions to public workers.. they formed civilized society as we know it. Public workers shouldn't be fighting and thinking about themselves.. They should be concerned about bigger things than making more than Joe Blow. Competition is so engrained from an early age, that maybe it's hard to step back and behold.. Do you really want teachers, cops, Dr's, and soldiers etc competing for money? Most of them can make more elsewhere.

I think the private sector has crashed a lot more than the public sector has ballooned. The private sector is tied to a volatile economy. The public sector provides some stability. Both are adjusting, but it's no use to spiral into anarchy here. I think people should be concerned with both what the _public_ and _private sector_ employee earns.


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## Toronto.gal

HaroldCrump said:


> *The ire against public sector DB pensions is often misunderstood as jealousy and resentment.......The burden on the tax payers is far too much.*


Absolutely right, nothing at all to do with jealousy/resentment.

'At 38 years of age; change careers, but remain within the public service, this allows you to build on a second defined benefit pension plan..'

Certainly one DB pension for someone with a 'zest for life' would not be enough, so the solution is getting a 2nd one.

http://business.financialpost.com/2...iving-happily-with-a-defined-benefit-pension/


----------



## sags

HaroldCrump said:


> Average salaries in Canada are $47,200 as per the 2013 StatsCan results.
> So, if you want to play the averages game, then it is evident that public sector workers _on average_ are making nearly 50% more than the overall _average_.
> 
> OK, so you are saying benefits account for over _*60%*_ of the total compensation for public sector workers ($114K - $70K)?
> 
> Therefore, the _total_ compensation for the _average_ public sector worker is *141% *higher than the average non public sector worker making $47,200.
> 
> And since we are speaking in averages, that average of $47,200 _includes_ the public sector workers making the $70,000.
> If you take out the entire public sector, average compensation in the private sector will probably drop substantially.


Your statistics look about right.

Minimum wage earners wouldn't affect public sector averages, as they would private sector averages. 

No question that public service wages have remained constant, while private sector wages have stagnated or declined.


----------



## HaroldCrump

sags said:


> Your statistics look about right.


...and you don't see a problem with this gross inequality?
Do you at least agree/understand why tax payers are so p*sed of?


----------



## sags

HaroldCrump said:


> ...and you don't see a problem with this gross inequality?
> Do you at least agree/understand why tax payers are so p*sed of?


I do see a problem, but I don't think blaming public workers is the solution.

Wages in the private sector...........suck.

That indicates a problem in the private sector......to me.

Corporations demand lower wages from their employees...........or they are going to China and ship the stuff back to us.

I say wrong....you can go to China...but you can't sell your stuff here....until China's borders open up to our exported finished products.

That is what "all this" comes down to.

Free trade exists only in the minds of it's defenders. There is no "free" trade. 

We have traveled down the road to destruction.........led by naive politicians who got plundered by the Chinese.

Strike an unfair deal with the Chinese, sell them our farmland, sell them our natural resources.........what could go wrong?

Except for........they end up with our jobs, our farmland, and our natural resources.

This is the public servant's fault........because they earn more?


----------



## Toronto.gal

sags said:


> I do see a problem.....That indicates a problem in the private sector......to me.


Another words, you don't see a problem with the public sector, yet you said unions are needed now like never before.


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## MoneyGal

+1!!!!


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## m3s

Toronto.gal said:


> Certainly one DB pension for someone with a 'zest for life' would not be enough, so the solution is getting a 2nd one.
> 
> http://business.financialpost.com/2...iving-happily-with-a-defined-benefit-pension/


Yes.. the "2nd pension" just like the "bridge benefit" that Harold keeps mentioning. It's 2% per year. The "bridge benefit" btw is actually a reallocated funds if it needs to be explained. Pretty basic concepts... especially for those making claims that others "don't know economics". There are actually no double pensions anymore. Today he would have a 58% pension at 29 years public service.. instead of a 40% and time required for the 2nd. It's more flexible now.

It cost millions of dollars to train him to fly millions of dollars of equipment with countless people's lives literally in his hands, but heaven forbid he would get a 40% pension to keep him flying in domestic natural disasters, Africa, war zones, and other dangerous situations, instead of being paid more to fly around them. I'm sure he had the potential to earn just as much in the private sector, albeit writing emails from a cubical, and maybe knitting for the zest.

If pensions are so unfairly rich then why did hardly anyone see the value in them until now? Lots of people tried to steer me into the private sector where a kid would surely earn much more. I always saw them both as fairly balanced opportunity in the long term, just one was a more interesting and meaningful to me. Some people will chase high yield and then always blame others for their misfortune. I only said it was envy, but clearly it's jealously as well.


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## sags

I don't see any inconsistency with those statements.

The public sector workers with unions earn more.

Private sector workers with unions earn more.

In general, unionized workers earn more than non union workers.

It seems to me, a logical conclusion, that non unionized workers would likely benefit from unionization.

Or it could be put another way............

Are there examples of private sector workers being better off because they don't belong to a union?


----------



## sags

M3s.......you are right about pensions.

Before the last recession, there was a lobby movement that people wanted "out" of their DB pension.

The stock markets were booming..........and they calculated they would be much better off investing the commuted value of the pension.

One recession later..........and everyone wished they had a DB pension again.

Some public servants who went back to work after retirement, were teachers who took the commuted values and lost their shirts.


----------



## fraser

You are absolutely correct sags. 

In 2000 the company that I worked for offered to switch employees from their DB plan to a DC plan. Employees were clamouring for this opportunity. The stock market was booming...especially in our industry which was IT. Most of the people I know who were eligible took the commuted value of their DB plan and moved it into a company sponsored DC plan. 

For many it turned out to be a bad choice...but it was their choice.


----------



## Spudd

Almost the same story at my company. In 2000, everyone was offered the change to move from DB to DC ongoing (I don't think they moved the commuted value, just the forward contributions), and TONS of people took them up on it. I did not (which I am very happy about).


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## m3s

According to this video Sags is probably right that people could use unions today.. The media repeats ad nauseam how the public service is spoiled fat, yet when anyone points out the obscene wealth distribution of the private sector they are portrayed as granola eating tinfoil pinko commies. Even if the numbers in this video are exaggerated, it's still pretty clear that the perception of "inequality" of the public sector is skewed in the opposite direction of the real issue. People need to think for themselves more often, and people need to look at society as a whole rather than just themselves. At what point is this private sector wealth distribution no longer "none of your business"?


----------



## sags

Great video........an excellent presentation that brings the numbers alive and understandable.

This is the reality today.

The wealthy cannot deny it, so they pay lobby groups to deflect the discussion onto others.

The lobby groups blame unions, public service workers, and label anyone who wants more equity in the distribution of wealth...... as a "socialist".

The lobby groups produce a consistent message.........against pensions, supporting "right to work" laws (right to poverty is more accurate), anything that would distribute wealth more evenly.

It costs a lot of money for a politician to win an election. The wealthy like it that way, as politicians have to come to them with cap in hand, to finance their campaigns........and the contributions come with strings attached.

My question is what do the wealthy think is going to happen, when work no longer provides a decent living?

Do they presume that people will grow food for them........simply because they are wealthy and entitled?

The intelligent wealthy..........people like Warren Buffet and Bill Gross know what is happening.........and have spoken out.

Unfortunately, their voices are drowned out by all the others.


----------



## HaroldCrump

On the heels of the OPG pension scam, comes more revelations that OPG is not alone in these egregious excesses.

_*Hydro One pension plan as lucrative as controversial OPG scheme*_

_With average contributions of $5 from Hydro One for every $1 from employees, its pension plan rivals OPG as one of the most generous in the public sector.
In total, the plans serve 18,000 employees — many of whom are members of either the Power Workers’ Union or the Society of Energy Professionals — and 19,000 retirees. 
"We recognize that the ratepayers, ultimately, are the ones that are affording this," Finance Minister Charles Sousa said, noting *many Ontarians paying for the pensions don’t have plans of their own*."
_
The article also refers to the pension plans of the IESO (Independent Electricity System Operator) and the ESA (Electrical Safety Authority).

As I wrote in one of the posts upthread, this is just the tip of a massive iceberg.
There is a *rampant, systematic, planned looting of the tax-payers *going on for years/decades.


----------



## OnlyMyOpinion

*"when anyone points out the obscene wealth distribution of the private sector"*

This video isn't about unions vs private sector. Its about those obscene private sector 1% who control 40% of the wealth in America. Who are they? They must be criminal, crooked wall street thieves.

Well lets see, the wealthiest American is Bill Gates, followed by Warren Buffet (about $130 billion combined). The first is largely responsible for your ability to use a computer to post to this site, the second is a hugely successful investor that many look to for insight. One was a university dropout the other had a B.A. 
Both now hold positions on the Bill & Melinda Gates Foundation, dedicated with putting ~$40 billion of wealth to work improving health and education around the world.
Way down the list (http://www.forbes.com/forbes-400/) is Mark Zuckerberg, a youngster worth only $19 billion. We're not Facebook users and not big fans of his wealth, but we aren't about to argue with the 1 billion users who seem to need facebook in their lives. Maybe there's a social issue there you'd like to take up that outweighs union-private sector issues.

So the question: Would we really sooner live in a world that squashes the ability of the Bills and Warrens of America to be successful, or that confiscates their "obscene" wealth. Do we really think our governments can "put in to better use"?


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## sags

Yes, but as Bill Gross ( CEO of PIMCO and himself a member of the wealth club) has pointed out......the Bill Gates and Warren Buffets of the world, accumulated their wealth during the greatest period of economic expansion of the middle class in history.

A comfortable middle class with purchasing power, who bought computers, Windows programs, and corporate production.

Would they........could they.........repeat their success in a world where the middle class is being steadily squeezed out?

Every year, the wealthy gather more total wealth and total income..........while the other 99% gather less.

I don't advocate for "taking" from anyone.........but wealth attracts more wealth.........as magnets attract iron.

If we don't find a way to more evenly distribute wealth and income, there is no sustainable path ahead.

The video highlights how the distribution of wealth has changed.........and the trend forward.

*"A country that is now aspiring to an 'Ownership Society' will not find happiness in - and I'll use hyperbole here for emphasis - a 'Sharecropper's Society.' But that's precisely where our trade policies, supported by Republicans and Democrats alike, are taking us."*

Quote by Warren Buffet


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## sags

The US trade "deficit" with China is about 40 Billion a month.

http://business.time.com/2013/12/04/u-s-trade-deficit-drops-to-40-6-billion-in-october/

Canada's trade "deficit" is about 930 million a month, despite a 3 billion dollar trade "surplus" with the US.

http://business.financialpost.com/2...deficit-doubles-as-exports-drop-imports-rise/

Our "big" problems aren't public service pay,.......or pensions.......or taking from the wealthy.

It is the failure of free trade policies, supported by all political parties who have convinced themselves that all trade is good.......even when it's not.


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## HaroldCrump

sags, all these complaints about free trade etc. are irrelevant misdirection and subterfuge.
We hear similar arguments from the union shills in the media such as Armine Yalnizyan, Adam Weir etc.

It is designed to change the topic of conversation from the systematic looting of the tax payers, such as the OPG and Hydro One pension scams highlighted above.
No amount of free trade (or lack thereof) can cause a group of individuals to misbehave like this.

According to your logic, _because_ private corporations offshore work to increase profits, _therefore_ the remaining unionized workers _must_ pillage the tax coffers to enrich themselves.


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## sags

Either side of the discussion, can point to examples of wanton greed, but the general tone of the discussion........is that public service workers on average........are better off than private workers. One side points to the "unions" and say........"there is the culprit".

That is the micro view of the picture.

The macro view is...........why are 90% fighting over the crumbs from this end of the table, when all the wealth is sitting on the other end?

So, if the anti-union effort was successful, and wages and benefits dropped to an even level with non-union workers, how does that change the big picture?

The wealth and income disparity will continue and they will have to prop up another convenient "target" to deflect attention.

Who will it be next..........those welfare moms..........the disabled...........lazy workers..........?

_According to your logic, because private corporations offshore work to increase profits, therefore the remaining unionized workers must pillage the tax coffers to enrich themselves. _

No.....according to my logic, private non-unionized workers would earn on par income and benefits.......that "some" union members have managed to barely hang on to.......but continue to have to fight to keep.

Unless people believe that a $500 paycheque is as liveable a wage in 2013, as it was 10 or 15 years ago, I don't know how they fail to understand the whole system has been corrupted to reward the wealthy at every turn.......just because they are wealthy.


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## james4beach

Switzerland was talking about a new law, "1:12 initiative", capping executive pay at 12 times the lowest paid worker.
http://www.cnn.com/2013/11/21/opinion/sutter-swiss-executive-pay/

I think it's a great idea. The ratio of highest paid to lowest paid in American companies used to be much lower, but had risen dramatically in recent years. Apparently the average ratio in America is now around 300 to 1. In the large American company where I worked, the CEO was paid around 300x (in total compensation) vs my salary --- insanely ridiculous when you think of it, since I'm a professional level worker with a postgraduate degree.


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## HaroldCrump

james4beach said:


> Switzerland was talking about a new law, "1:12 initiative", capping executive pay at 12 times the lowest paid worker.
> I think it's a great idea.


That referendum was voted down by the Swiss themselves.


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## Toronto.gal

james4beach said:


> In the large American company where I worked, the CEO was paid around 300x (in total compensation) vs my salary --- *insanely ridiculous when you think of it, since I'm a professional level worker with a postgraduate degree.*


The CEO salary may have been insanely ridiculous, but not because of your level of education. There are many people with multiple degrees, but do all those degrees contribute significantly to the success of their companies? I'm not saying you were not doing an excellent job, just that many people expect higher salaries simply because of the degrees they hold, that often times are not related to their jobs.

I know someone who believes she should receive a higher salary because she speaks English/French, except that her employer only does business in English 99.9% of the time.


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## Four Pillars

Toronto.gal said:


> I know someone who believes she should receive a higher salary because she speaks English/French, except that her employer only does business in English 99.9% of the time.


Maybe she deserves a 0.1% raise?


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## Toronto.gal

^ On the bilingualism part you mean? 

She had no complaints on her [English] contribution/performance increase, nor on the bonus based on company's profits.


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## james4beach

Toronto.gal said:


> The CEO salary may have been insanely ridiculous, but not because of your level of education. There are many people with multiple degrees, but do all those degrees contribute significantly to the success of their companies? I'm not saying you were not doing an excellent job, just that many people expect higher salaries simply because of the degrees they hold, that often times are not related to their jobs.


True, my degree in itself doesn't contribute to value.

However there is no way that my professional time is worth only 1/300th of the CEO's time. If anything, the company is bleeding money *out* through that guy (taking home ridiculous pay)... there is no way that I believe that a CEO taking home that much money is adding to shareholder value. Just like the banks and financial companies that paid out millions in executive compensation _while the companies themselves collapsed_. How do you pay a CEO something like 200x to 600x other workers salaries, when the guy is running the company into the ground??

*That's* the problem with corporate America (and Canada). These people at the top aren't worth their wages, but we (as society) allow them to steal from everyone else's wage... even lay off everyone else... while they boost their own personal pay.


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## fraser

Executive compensation is, and should be, determined by shareholders/owners.

What an employer pays an employee in the private sector is a issue for the private sector.


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## james4beach

fraser, when you say that it makes it sound like mom & pop investors at home can voice their interests in the corporate world.

That's not the case. Mutual funds and ETFs have enormous power and are the dominant shareholders. They make the decisions -- not small investors. This is a world of financially trained MBAs making decisions on the pay levels of other financially trained MBAs. Guess their bias... of course they're going to be supportive of high MBA compensation. They're all friends!

So when I see the high executive compensation, I see it as a result of insider connections and a club controlled by like minded people, not natural market forces or the will of real investors.


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## HaroldCrump

This whole tax payer funded public pensions thing has gotten completely out of control.
Not so much the CPP (yet), but all the layers upon layers of tax payer funded public sector pension plans.

What started out as nice little incentives to improve retention and motivation in the public service 40 - 50 years ago has become a Frankenstein monster.
It has now become _the_ central issue at many levels.
When there can be strikes and work stoppages about this issue, you can tell that this has become too big and gotten out of hand.

How can voters complain about govt. spending, deficits, and cuts to services without realizing where the majority of the spending is going, why there is a deficit, and why services have to be cut (vs. cutting the _cost_ of same services).


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## gimme_divies

HaroldCrump said:


> This whole tax payer funded public pensions thing has gotten completely out of control.
> Not so much the CPP (yet), but all the layers upon layers of tax payer funded public sector pension plans.
> 
> What started out as nice little incentives to improve retention and motivation in the public service 40 - 50 years ago has become a Frankenstein monster.
> It has now become _the_ central issue at many levels.
> When there can be strikes and work stoppages about this issue, you can tell that this has become too big and gotten out of hand.
> 
> How can voters complain about govt. spending, deficits, and cuts to services without realizing where the majority of the spending is going, why there is a deficit, and why services have to be cut (vs. cutting the _cost_ of same services).


Harold, the only person turning this into a Frankenstein monster is you. I started another thread that shows that the Government throwing away $10B per year in GST revenues is a MUCH bigger issue than anything public sector union or pension related. And your constant harping on the fact that unions can strike seems to me to be way overblown as I have been a Federal Government employee for almost 8 years and only once saw picketing outside a Government building when PSAC was conducting rolling 1-day strikes. Perhaps you are more referring to issues like the garbage strike in Toronto or the OC Transpo strike in Ottawa, which were indeed problematic situations, but it seems like you always take the worst issues from every tiny sector, and combine them all to form a Franken-union monster that does not actually exist. 

Anyway, I'm not getting into a debate with you as you clearly have an obsession with bashing the public sector and unions. Just let it be known that you have made your point LOUD and CLEAR and do not need to continue repeating the same thing over and over again - we get it!

Oh, and to get back on topic, I do contribute a DB pension and so does my wife. I guess we must be evil.


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## HaroldCrump

gimme_divies said:


> I started another thread that shows that the Government throwing away $10B per year in GST revenues is a MUCH bigger issue than anything public sector union or pension related.


How is it "thowing money away"?
Why is 7% the right GST rate?
Why not 9%, or 11%?
If your logic is that the GST must be _whatever_ is required to eliminate the deficit, then where does it end?



> And your constant harping on the fact that unions can strike seems to me to be way overblown as I have been a Federal Government employee for almost 8 years and only once saw picketing outside a Government building when PSAC was conducting rolling 1-day strikes.


You want a list of strikes in the last 5 years?
Off hand, I can think of a dozen, at least.
The Ontario teachers have had 3 strikes since 2009 that I distinctly recall (because my kids missed school).
Then there was Canada Post.
And Air Canada
Several strikes by various municipal workers, incl. the infamous garbage strike.

If you have participated in only 1 strike, good for you...you are a true capitalist.

I never said DB pensions, per se, are evil.
You know very well what I have said, but you are deliberately misconstruing it.


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## Toronto.gal

HaroldCrump said:


> You want a list of strikes in the last 5 years? The Ontario teachers have had 3 strikes since 2009 that I distinctly recall (because my kids missed school).


The 2008 York U. strike falls under the above mentioned period, that I also distinctly recall as it affected friends of mine.

Written in 2012: [same year when the union was ready for another strike] 

'Just four months ago, York University was teetering toward yet another strike. The same union, CUPE Local 3903, was threatening to strike, if the University did not provide their union members, teaching, graduate and research assistants and contract faculty, with better job security....It should also be noted that, fifteen years ago, a seven-week long strike took place; in 2001, university operations were disrupted by a strike that lasted more than eleven weeks, breaking its former record.'
http://www.thecourt.ca/2012/08/29/turner-v-york-university-final-round-of-legal-battles/

I also recall a 2 week TTC strike, but that was over 5 years ago, another words, pick any period and you will find multiple & significant disruptions.


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## PuckiTwo

gimme_divies said:


> Harold, the only person turning this into a Frankenstein monster is you.


No, he is not the only one who thinks that way. But Harold is one of the rare few who speaks out loud what many of us think.


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## pwm

For the record, I agree completely with everything Harold has said on this topic, but I always feel that I have nothing more to add because he has already expressed it so well.


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## sags

People seem to forget that governments are "defacto" employers for public service workers.

Taxes, royalties, and fees are simply the method by which the government "employer" uses to "charge" for their services.

It is no different that an auto company pricing in the cost of their salaries, bonuses, pension plans and other costs (both management and non-management), into the price of a new vehicle. The consumer (taxpayer) pays the cost through the purchase, albeit a hidden cost.

The debate would have more consequence if the "individual" incomes and benefits of each public service job were examined and then debated.

I think if that were the process, it would become clear that upper management (predominantly non-union) public service employees benefit much more than the average low level (predominantly union) public service employee.

How much should an emergency room nurse be paid?

What is an appropriate salary for a school janitor?

These are currently decided by their "employer".........the hospitals and school boards.........in the context of a quasi - capitalist system.

Should public service workers not be allowed to participate in the same system as everyone else?

On the one hand, people praise the free market capitalist system....but on the other hand lament that public service workers partake in it.


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## kcowan

sags said:


> Should public service workers not be allowed to participate in the same system as everyone else?
> 
> On the one hand, people praise the free market capitalist system....but on the other hand lament that public service workers partake in it.


The problem is that a private CEO will pay for every raise he grants in adverse company financial performance. The public deciders are just loading up the taxpayer with no skin in it.


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## Eclectic12

james4beach said:


> fraser said:
> 
> 
> 
> Executive compensation is, and should be, determined by shareholders/owners.
> 
> What an employer pays an employee in the private sector is a issue for the private sector.
> 
> 
> 
> fraser, when you say that it makes it sound like mom & pop investors at home can voice their interests in the corporate world.
> 
> That's not the case. Mutual funds and ETFs have enormous power and are the dominant shareholders. They make the decisions -- not small investors. This is a world of financially trained MBAs making decisions on the pay levels of other financially trained MBAs. Guess their bias... of course they're going to be supportive of high MBA compensation. They're all friends!
> 
> So when I see the high executive compensation, I see it as a result of insider connections and a club controlled by like minded people, not natural market forces or the will of real investors.
Click to expand...

 ... that's what I regularly read in the annual reports ... the duly appointed compensation committee puts forth the compensation package with the claim that it's needed to be competitive. I can't figure out why a $12 million severance for a CEO that didn't turn around the company, something like ten years ago is needed. Never mind that a previously pro-business commentator looking at the stats figures business has gone nuts.

I'm also not sure that an MBA setup is required, given the number of annual reports I've read where the compensation and audit groups are made up of farmers, former politicians etc. 

I'd also question if the big players have as much influence as suggested - certainly more than the average investor's small shares.



Of course some of what appears to be the worst is to read of the execs in the US being paid salary and/or bonus from the employee db pension. The one article was pointing out the contradiction that the US changed it's bankruptcy law so that unpaid college loans could no longer be wiped out by declaring bankruptcy but money borrowed from pensions to pay executives was forgiven.

Cheers


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## newfoundlander61

I have one from the Military, my *net* each month is $1,100 monthly.


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## avrex

Based on a 2008 study of Company Pension Plans in Canada, the breakdown is as follows:

62% of workers have No RPP (Registered Pension Plan) coverage

17% Public Sector DB pension
1% Public Sector DC pension

12% Private Sector DB pension
8% Private Sector DC pension

Interesting. Almost all of the public sector pensions are DB.

Overall, only *29% of Canadians have a DB pension.*


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## fraser

And there are even fewer open DB plans today! 

But on the bright side, DB pensions funds have made substantial gains over the past two years. Most are well above the 85 percent level.


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## RBull

No I don't. For full disclosure my wife does however, although hers is in poor shape.


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## fraser

Here is a quote from a recent Financial Post article. DB funding increased substantially in FY13:

Almost 40% of pension plans tracked by Mercer are now fully funded, compared to 6% at the beginning of last year. What’s more, only 6% are now less than 80% funded, down sharply from 60% at the beginning of the year.


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## HaroldCrump

That is probably a result of rising bond yields.


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## fraser

US equities were stars last year.

The other notable item...litigation over DC plans is apparently increasing exponentially over ever aspect imaginable. It may cause some firms to reconsider freezing their DB's and moving to a DC environment.


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## HaroldCrump

fraser said:


> US equities were stars last year.


That's true as well.
Although, in the case of pension plans, I suspect bond yields have a far greater impact on solvency and funding status than equity returns.
There is also the "Anti-Great Rotation" in play -
http://www.bloomberg.com/news/2014-...lion-of-pensions-seen-unloading-equities.html



> The other notable item...litigation over DC plans is apparently increasing exponentially over ever aspect imaginable.


What litigations against DC plans?
Do you have a link?


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## fraser

I have read a number of articles. Starting a DC plan or moving from DB to DC is a legal minefield. I will try to find them. Essentially the litigation looks like this:

-litigation involving companies and their pension advisors over the wording and communication of migrations from DB to DC plans (lots here). Employee communication and the duty of care to communicate accurately especially in terms of expectations of return, risk, etc.

-litigation over the choice of investment options available to ees in a DC plan, ie are they good choices, how and why were they selected, and what are the management fees. Also...some investment funds are apparently 'rebating' fees to companies and these fees are not going back into the DC plan. 

-a large amount of litigation over DB plans and the litigation is focussed on pension advisors as well as employers/employer groups

-the usual over DB windup- who owns the surplus, and how that surplus should be distributed (to current ees or to current ees AND all those already in receipt of a monthly DB pension

I spoke to a lawyer in Calgary who practices with a mid-large sized firm. He said that the labour practice was the fastest growing area of their firms practice and that it was the same for other large firms in town. Especially since mergers and acquisitions are significantly lower than in the past.

try this;http://www.bpmmagazine.com/02_archives/2006/february/litigation_risks_dc_plan_sponsors.html


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