# Ontario Pension Plan



## sags (May 15, 2010)

The Ontario Liberals are considering an Ontario Pension Plan, should the Federal Government not enhance the CPP.

http://www.theglobeandmail.com/news...tion-hudak-less-enthusiastic/article14889166/


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## fraser (May 15, 2010)

Brought to you by the very same people who just flushed over $1 Billion down the toilet with the utility fiasco (when they first claimed the cost was $40 Million) and tried to hide it from the public. 

In the words of another politician from another province from a different time...."these guys could not even run a pop stand".

No wonder Ontario's finances are in such a mess-I think they are now a 'have not' province in Confederation.


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## andrewf (Mar 1, 2010)

^This comment doesn't really say anything about the proposal at hand. It could been a reply to any mention of the Ontario Liberals...

As long as it's run by an arms-length body like CPPIB, I don't think it matters which party controls Queens Park. The idea should be evaluated on its merits.

I agree with Drummond's assessment that it's not a bad idea, but it's definitely second-best to an enhancement of the CPP.


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## MrMatt (Dec 21, 2011)

andrewf said:


> ^This comment doesn't really say anything about the proposal at hand. It could been a reply to any mention of the Ontario Liberals...
> 
> As long as it's run by an arms-length body like CPPIB, I don't think it matters which party controls Queens Park. The idea should be evaluated on its merits.
> 
> I agree with Drummond's assessment that it's not a bad idea, but it's definitely second-best to an enhancement of the CPP.


If it's political, it can be screwed up.
Look at time of use billing, everyones bill went up, despite claims to the contrary.
Or the solar & wind power garbage, which they also claimed wouldn't cost anything. 

If they implement a pension plan, it's just forcing us to save our own money, there is no political benefit to that.
Now if they take our money, and give it to current retirees who didn't save enough, there are a LOT of votes in that. Which one do you think they'll choose?


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## andrewf (Mar 1, 2010)

I don't think they claimed that the feed in tariff for renewable would not raise costs. And if they made that claim, it certainly was not credible. I'm not a supporter of the feed in tariff myself--I think it's a grossly wasteful mechanism for encouraging renewable energy development.

There's nothing about time of use pricing that requires prices to rise. Time of use, in principle, is a sensible way to charge for hydro consumption. The fact that rates (including the blended rate for users not on TOU) went up was a side issue related to the fact that hydro rates had been kept artificially low by the previous government (more political meddling) through taxpayer subsidies as well as the need to cover additional costs related to the FIT program and the capital expenditure for new plants and transmission infrastructure.

I disagree that there's no (political) benefit in a gradually phased-in increase in pension benefits in line with increased contributions. They can be seen to be 'doing something', even if the benefits are some way off. Trying to create an overt intergenerational transfer of wealth would open it up to a lot of opposition and bad press beyond the cries of "Tax hike!" I don't think pension contributions can accurately be described as a tax. It's a transaction where you receive a benefit directly tied to the contribution.

In general, I oppose changes in mandatory pension contributions that seek to increase the pensionable earnings. i think the current level is fine, or even a bit too high. I'd prefer to see a pension that replaces more like 50-60% pensionable earnings up to about $40k per year. This serves to deal with the free-rider 'problem' (to the extent it exists) of people with adequate income during working years who fail to save enough for retirement and depend on welfare in old age (GIS, OAS, etc.).


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## fraser (May 15, 2010)

I do not think that it will happen in this term. I think that it is nothing more than a ruse to divert attention from other issues that are causing discomfort to the current Government. Much like the Throne Speech that we had yesterday.

Not sure that an Ontario plan...if it is fashioned after CPP with employer contributions, is such a great idea at the moment given the state the manufacturing industry in Ontario.


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## andrewf (Mar 1, 2010)

fraser: It would have next-to-no impact on employers who already offer DB plans. Most DB plans account for CPP in their benefit calculations. I would not expect any difference with an OPP.


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## sags (May 15, 2010)

Saskatchewan already has their own pension plan, and others are moving in that direction..........as the Feds hum and haw about the CPP.

Maybe the Provinces have come to the realization that if people have no retirement income....the welfare costs will be their burden to bear.


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## fraser (May 15, 2010)

Agree, but only a small percentage of firms in the private sector actually have DB pensions. I think that most public sector DB's take CPP into account. Not certain about the private sector...certainly not the few that I have had exposure to.

But I still think it is academic. Seems more like a political shell game to me at the moment.


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## andrewf (Mar 1, 2010)

The bottom line is that is prevents a degree of free-riding, while providing a more robust risk-shared basic retirement income. The downside is that people lose some freedom to make their own investment choices.


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## MoneyGal (Apr 24, 2009)

I guess I don't see it that way. As GIS and OAS are paid out of general revenues, a non-free-rider is not better off unless my individual taxes go down / service levels go up. 

This is socializing risk - everyone has to pay more insurance because some people aren't managing their risk well. 

Not everyone will receive a payout, so to characterize this as a net positive is incorrect. 

Some people, who would otherwise have received more GIS/OAS, would potentially self-finance a greater proportion of their retirement income. But *everybody* would have to pay increased premiums, including businesses, to solve for that problem.


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## andrewf (Mar 1, 2010)

Everyone receives an expectation of retirement income. If you end up dying before you receive it, is that any different that dying with private savings?


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## MoneyGal (Apr 24, 2009)

Um, yes; because my private retirement savings can be willed to my kids. My CPP dies with me, even if I never receive a cent.


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## andrewf (Mar 1, 2010)

But CPP is only intended to be part of your retirement income. Surely you would have other assets to bequeath. If it's really a problem, you could buy term life insurance for the actuarial value of your CPP benefit. And you also get the harder-to-quantify benefit of not having to support as many seniors through GIS.

With most every policy there will be winners and losers. The question is whether social welfare overall is improved and the distributional effects are acceptable.


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## fraser (May 15, 2010)

There was a huge hue and cry fifteen or so year ago when Paul Martin (I think) took the absolutely correct path to revamp CPP and place it on a firm footing. CPP rates were increased gradually. It was the right thing to do but it was far from popular.

Everyone is in favour of a more robust plan....until it is time to actually pay for it and most particularly when they see the first smaller paycheque.

I do not disagree that an enhanced plan in whatever form has merit. I just do not see the current Government in Ottawa or in Queens Park willing to take the chance with a restless electorate...especially Queens Park. In the case of Ontario I can just imagine the negative adds now. They would go something like this....the Ontario Liberals threw $1 Billion of your hard earned dollars away and tried to hide it, would you trust them with your pension/retirement dollars? Or words to that effect. It would be nasty.


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## MoneyGal (Apr 24, 2009)

andrewf said:


> But CPP is only intended to be part of your retirement income. Surely you would have other assets to bequeath. If it's really a problem, you could buy term life insurance for the actuarial value of your CPP benefit. And you also get the harder-to-quantify benefit of not having to support as many seniors through GIS.
> 
> With most every policy there will be winners and losers. The question is whether social welfare overall is improved and the distributional effects are acceptable.


Yes, but you are arguing that CPP should be a BIGGER part of my retirement income, and that I and my employer should pay for that by way of a tax. 

We must be working from different assumptions. How is social welfare improved if people get more in CPP, and less in GIS, if CPP premiums/payouts are increased? 

HINT: GIS is already lifetime, inflation-indexed income. 

How are the distributional effects acceptable if my tax goes up (by way of increased CPP premiums), my employer's payroll tax goes up, and recipients of an enlarged CPP see no more additional money than they would under the current system? 

There must be something I'm missing here.


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## andrewf (Mar 1, 2010)

> How are the distributional effects acceptable if my tax goes up (by way of increased CPP premiums), my employer's payroll tax goes up, and recipients of an enlarged CPP see no more additional money than they would under the current system?


I'm not following this. Maybe you think I mean to increase YMPE. I don't think that's really necessary. What's needed is a higher replacement rate.


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## MoneyGal (Apr 24, 2009)

I don't mean an increase to YMPE. Unfortunately I don't have the bandwidth this aft to type out a response. Will try later!


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## HaroldCrump (Jun 10, 2009)

I did not see too many details about this proposed plan in the linked article.
Exactly what is the nature of this "pension" plan proposed by the Wynne govt?
Pension plans can mean anything ranging from a CPP-like system, to the SK SPP, or the Federal PRPPs - anything and everything is called a "pension" these days.
Is there a mandatory employer contribution as well, similar to CPP or is this a self-funded plan?

Either way, why do we need yet another bureaucratic govt. agency for managing yet another public pension program.
We already have layers upon layers of govt. agencies and boards managing different types of pension programs.
There is, of course, the CPPIB - the grandfather of all.
Then there is the OPB managing the Ontario PSPP.
Then there are another 4 or so large institutions managing the other top public sector pension plans - the Teacher's OTPP, the OMERS, and the HOOPP.

If this proposed plan is indeed a CPP-style mandatory plan, funded by both employee and employer contributions, IMO, the best option would be to roll this into the Ontario PSPP.

The article talks about income replacement rate.
Well, part of the problem is that we have two replacement rates in effect - one for the public sector which is unusually high, and another one for the rest of the riff raff (via CPP), which is too low in comparison.


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## fraser (May 15, 2010)

Lots of people want a better pension plan/income security plan. But how many are prepared to pay for it?? 

This isn't a freebee that drops from the sky. Some experts estimate that 12 percent is needed to support a decent pension plan given the changes in investment climate and longevity. I think that this is nothing but a red herring...that is why there are no details. Smoke is being blown up the you know whats of Ontario voters.


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## HaroldCrump (Jun 10, 2009)

fraser said:


> But how many are prepared to pay for it??


Good question...why don't we ask some of the former federal and provincial politicians that agreed to a _pension apartheid _ - generous public sector pensions with high income replacement rates on the one hand, funded by unpensioned tax payers on the other hand.

I am no longer interested in any more public pension proposals (including an increase to the CPP) until this apartheid is addressed - the PRPP was the last straw for me (glad it is DOA).



> Smoke is being blown up the you know whats of Ontario voters.


What else is new :biggrin:


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## sags (May 15, 2010)

If a person saves 15% of their pay in retirement savings, and I choose not to,....would I be justified complaining about benefits they received from their savings?

To me, that is basically the same principle as a mandatory pension contribution plan.

Public service workers pay a significant amount of their income into their pension plans. They are entitled to reap the benefits.

Logic would follow, that if a person doesn't want to participate in mandatory contributions, they would not want to belong to a public service pension plan.

As to who funds the public service pension plans, tax payers ultimately fund everything............so there is no news there.

The public wants the supplied services, so they agree to assume the employer role and pay the costs.

It really is no different than when a group of farmers got together and wanted to build a school in the area for their kids. They paid to buy the land and build the school. They paid for the school supplies. They hired and paid the teacher, and they paid the ongoing costs.

The only thing that has changed is the collective is much larger, and the government takes the money and acts on our behalf.


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## HaroldCrump (Jun 10, 2009)

sags said:


> To me, that is basically the same principle as a mandatory pension contribution plan.


But that is not what is happening, is it?
The vast majority of tax paying workers have been blocked out of mandatory defined benefit pension plans with zero risk high income replacement rates.
CPP's income replacement rate is far lower than the type of plans I am referring to.

I am not arguing against mandatory contribution plans; in fact, we know that it is the _only_ type of plan that is effective.
If it weren't so, we would not have such low usage of RRSPs, and maybe even the PRPPs would have taken off.

Mandatory plans are the way to go...but the problem is that there aren't any available (other than the CPP).



> Public service workers pay a significant amount of their income into their pension plans. They are entitled to reap the benefits.


Do not forget the tax payer contribution, which in many cases is higher than the employee contribution %.
Wouldn't you say those that pay for any such system should also have a similar system available for themselves?

Would you pay someone to go and have an 8 course meal complete with caviar and champagne, while you can only afford gruel and potato soup?



> Logic would follow, that if a person doesn't want to participate in mandatory contributions, they would not want to belong to a public service pension plan.


Nope, not at all.
How does that follow?
I have not heard of anyone who would turn down a public sector job they wanted simply to avoid participating in the pension plan.
Quite the contrary in fact.


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## andrewf (Mar 1, 2010)

sags, I think the question is whether public sector total compensation (fairly valuing things like pensions) is in line with private sector incomes for similar work. 

Also, shenanigans like final salary pensions means people can crank out maximum overtime in their final year of service and receive undue pension benefits given what their contributions have been. I don't know how you untangle the moral hazard of politicians buying labour peace today using pension promises decades away. Maybe the solution is something draconian like banning DB pensions in the public sector, and changing all new pension benefits to defined contribution. This makes explicit the cost of public sector pensions in the year their accrue.


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## sags (May 15, 2010)

_Do not forget the tax payer contribution, which in many cases is higher than the employee contribution %.
Wouldn't you say those that pay for any such system should also have a similar system available for themselves?_

Absolutely, the tax payer should not be in a position of giving better pension plans to their "employees" than they are entitled to get themselves.

But, the answer isn't to knock down those who contributed their own money, worked for their employer for decades, and now have the benefits.

The answer is for taxpayers to lift themselves up to the same level by demanding "equality" in their own retirement income.

I do agree that some of the "additions" to DB pension plans in the public sector are generous, perhaps overly so.........but those are easy problems to address.


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## sags (May 15, 2010)

It is ironic to me........that it is probable that a large percentage of people posting negative comments on newspaper articles on any CPP enhancement, probably don't have a pot or a window..........for their own future.

Give me the money...........now, are words I have heard before, from people who questioned my sanity when I suggested they funnel increases in compensation into a future pension plan....... instead of per hour wages.

And when the place folded up, long after I was gone, they all had diddly built up for their retirement.

Sad........but true fact. 

You really have to rip the money from their hands.........to get most people saving to their own retirement.

CMF posters are different of course. They are actually interested in how they will be spending their retirement years.


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## andrewf (Mar 1, 2010)

sags said:


> But, the answer isn't to knock down those who contributed their own money, worked for their employer for decades, and now have the benefits.
> 
> The answer is for taxpayers to lift themselves up to the same level by demanding "equality" in their own retirement income.


It's not really realistic for everyone to get the same level of pension guarantee. If we want to do that, though, the vehicle to accomplish it is something like the CPP (whilst phasing out public sector DB plans). Just telling people in the private sector to demand something equivalent from their employers translates to telling them to suck eggs...


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## fraser (May 15, 2010)

Both of the two employer DB plans that I have been in were purely voluntary. You did not have to enroll.

In the latter, where I worked for 25 years, there was no reason not to enroll. It was entirely funded by the employer with no mandatory contributions by the employee. 

We saved for retirement. Now we are enjoying the benefits. Others I worked with did not. We all make choices in life. My observation is that people who make good life decisions typically make good retirement savings decisions. 

Of course, there is always the unexpected such as a DB plan that fails and does not pay out as promised.


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## sags (May 15, 2010)

Scratching on the windows, while those with public service pensions sit inside, isn't going to accomplish much.

There have been lots of articles on the "ridiculous", "gold plated", "overly generous", public pension plans, but they miss the point.

If public service pensions were eliminated tomorrow..............how does that help everyone else?


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## andrewf (Mar 1, 2010)

sags,

Who pays for public service pensions? If you answer "public sector workers" you're a bit wide of the mark.


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## HaroldCrump (Jun 10, 2009)

sags said:


> If public service pensions were eliminated tomorrow..............how does that help everyone else?


You mean the end of pension apartheid?
Why wouldn't that be good for everyone else.
A double digit tax cut to begin with...

I agree with andrewf's statement above ref. _the vehicle to accomplish it is something like the CPP whilst phasing out public sector DB plans_

That is exactly what should have been done in the last 2 - 3 decades by both federal and provincial leaders, instead of pandering and appeasement of militant labor unions and creating a two tier workforce.


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## sags (May 15, 2010)

Most public service pensions are reduced, when they are integrated with the CPP and OAS.

Expansion of the CPP would reduce the "basic life time pension" even further.

It is one way to transfer more of the cost of the pensions from the employer to the recipient.


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## sags (May 15, 2010)

Tax cuts for individuals, I am all for.

Tax cuts for corporations, I am against.......simply because we tried that already, with the premise that a tax cut would create jobs.

It didn't..........and companies are still laying off by the thousands, despite lower corporate tax rates.


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## HaroldCrump (Jun 10, 2009)

sags said:


> Most public service pensions are reduced, when they are integrated with the CPP and OAS.


True, but the net monthly income stays the same for the pensioner, right?
In the case of public sector pensions, it really is the same thing...both the pots of money are coming from the tax payers.



> Expansion of the CPP would reduce the "basic life time pension" even further.


So what?
The reason that will be so is because there is a large gap between the income replacement rate of CPP and that of most public sector pension plans such as OTPP or Ontario PSPP, assuming full service in both cases.
Expansion of the CPP will increase the income replacement rate for those without public sector pensions.
And if, simultaneously, all these layers upon layers of public sector plans are merged/dissolved, yes, the income replacement rate will go down for those folks.



> It is one way to transfer more of the cost of the pensions from the employer to the recipient.


The vast majority of workers are indeed responsible for their own retirement and retirement income planning.
Where does it say that it is the employer's responsibility?
What else should be employer's responsibility? Providing day care, providing a commute car, providing free coffee and lunches at work? Providing a cot for afternoon siestas? Where does it end?

And if you believe that the employer should indeed be bearing the bulk of the cost of retirement, then it should be so for all workers.
Then you should be in favor of a major expansion of the CPP such that it requires increased employer contribution and targets a 70% income replacement rate in retirement.


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## fraser (May 15, 2010)

I think that it is important to get the facts straight. CPP is not funded by the government.


It is a mistake to assume that all public sector pension plans are the same, ie have the same benefit ratio and cost to the employee. This is simply NOT true. There is actually quite a wide variance.

The issue is not how generous the specific pension scheme is. The real issue, IMHO, is two fold. Firstly, how much of a specific public pension plan is funded by the employee and how much by the employer. The second, perhaps more important issue, is how does total compensations-salary, benefitis, pension, the lot of a job category in the public sector compare to one in the private sector.

It seems very meaningless to me to continually criticize public sector pensions and lump them all in the same boat without a clear understanding of the facts,ie the numbers. And no, I do not have a public sector pension, nor does my spouse. I know of some people in the public sector who contribute seven percent, I know others that contribute twelve percent. And their respective plans have different entitlements.


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## andrewf (Mar 1, 2010)

The problem with public servant DB plans is that it makes it so very easy to grant very high total compensation packages using off-balance sheet liabilities. Labour peace today without current expenditure--what's not to love, unless you're a taxpayer?


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## sags (May 15, 2010)

A lot of the pension fund was accumulated through employee contributions and investment gains on that capital over a period of 30 years or more in bullish stock markets. 

Let's not forget that people start contributing early and continue to contribute every paycheck, often 2 times a month.

The people retiring today, have been contributing to the pension plan since the 1970s and 1980s.

They are actually doing what most investment advisors would tell them to do.

Start when you are young, invest continually over a long period of time............and enjoy the results.

If I remember correctly, Jim Leetch, former head of the Ontario Teachers Pension Plan, said each member has about $800,000 individually in the plan. If they withdrew 4% a year........they would have a $36,000 a year pension........not far off what they are getting in monthly benefits, I would suspect.

Investing that kind of money, over that period of time, would have resulted in superior retirement benefits, pension fund or not.


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## fraser (May 15, 2010)

It is not just longevity, investment climate, and the percentage of private sector firms with DB plans that have changed.

There has been a large change in how long the average person remains with the same employer for his/her career.

Someone could be covered by a DB plan through various employers in their working life. Changing employers and obtaining the NPV of pension credits on exit multiple times during one's working life results in a significant reduction in the value of those lifetime benefits compared to someone who remained with the same employer for 25+ years. This is why some prefer a DC plan.


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## HaroldCrump (Jun 10, 2009)

sags said:


> A lot of the pension fund was accumulated through employee contributions and investment gains on that capital over a period of 30 years or more in bullish stock markets.
> Let's not forget that people start contributing early and continue to contribute every paycheck, often 2 times a month.
> The people retiring today, have been contributing to the pension plan since the 1970s and 1980s.
> They are actually doing what most investment advisors would tell them to do.
> Start when you are young, invest continually over a long period of time............and enjoy the results.


No one is disputing those principles.
All of that stuff is motherhood.

The issue is the complete lack of availability of similar plans outside the public sector.
That is the essence of pension apartheid.

Administration after administration, of all political flavors, over the last 3 decades have refused to expand the CPP to make it even half like the PS plans - for a variety of reasons.
No other viable alternative has emerged either (leaving aside SPP and PRPP, which are not DB plans).

The vast majority of tax payers that fund, sustain, and backstop those PS plans do not have access to anything even half as close.

To say (as you do), "just save bi weekly and invest" is like Mary Antoinette musing _why don't they eat cake_.

Then there is the issue of deferred over-compensation i.e. tax payer guaranteeing gold plated features like full indexation, bridge benefits, etc. as well as contributing more than employee contributions.
There are many PS plan where the employer contributes more than the employee %.


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## sags (May 15, 2010)

I agree expanding the CPP is the sensible way to approach the lack of DB pensions.

As you point out, the expectation that people will voluntarily and studiously save an equal amount as their contributions each pay, is wishful thinking.

The participation must be mandatory........and employers should have to contribute an equal amount.

In one sense, it would begin to level the playing field, as people receiving DB pensions almost always experience a reduction in their regular pension at age 65, to compensate for the onset of CPP and OAS benefits.

Those in receipt of public pension plans, would receive a higher CPP benefit and less pension benefit from their public service pension plan.


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## fraser (May 15, 2010)

Most of the people that I know who are in a private DB plan do NOT experience a reduction in their pension benefits at age 65 to compensate for CPP.

In most cases, people in private sector DB plans, based on age and service, actually get an INCREASE, bridge (an incremental enhancementamount) if you will, from their date of retirement to age 65. In my case my pension remains the same but alas I do not have enough 'points' to take advantage of this enhancement. 

Several of my friends who have public sector pensions, do experience a decrease at age 65.


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## HaroldCrump (Jun 10, 2009)

Most public sector pension plans are "integrated" with CPP.
Therefore, upon turning 65, the gross pension amount ought to remain the same.
All that changes is the % paid by the pension plan as CPP steps in and picks up the rest - the net result to the pension recipient remains the same.

Bridge benefit is a different matter - it is a gold plated (and highly obnoxious) feature that enables plan members to retire early but receive _full_ pension _as if_ they were already 65.
Bridge benefits vary from plan to plan, but the more generous among them allow members to retire as early as 55 with full pension.

I suspect the vast majority of private sector workers and tax payers are not aware of the extent of public sector pension benefits.
There is a deliberate lack of transparency, and a deliberate campaign to make this as opaque as possible for the vast majority of tax payers.
I wonder how most people will feel if they knew the full extent of their tax burden that goes towards supporting these plans and benefits.


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## fraser (May 15, 2010)

Many private DB plans have bridge benefits. Not sure why you imply that this is a 'highly obnoxious' feature limited to public sector pensions when this is clearly not so. 

Bridge benefits are a very common feature of private and public DB plans. To state otherwise is just a little misleading.


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## HaroldCrump (Jun 10, 2009)

"Many private sector DB plans" is an oxymoron, to begin with :biggrin:

Secondly, almost feature by feature, public sector plans are more generous than private plans.

Bridge benefits in PS plans begin as early as 52, some 55 - private plans usually begin around 60, give or take.
Almost all PS plans have full indexation - many private plans have none or partial.

Why is this so - simply because it can be.
The public sector is not bound by the same covenants of fiscal responsibility and balance sheet accountability that the private sector is bound by.
The govt. has unlimited ability to tax its residents, and squander the revenues in cohorts with the labor unions.

But just to keep this on topic, ref. the original article about an ON pension plan, if the Wynne govt. has even an iota of sincerity in this plan, the right thing to do is to create an accessible DB plan, open and available to all Ontario workers and bring it under the umbrella of the PSPP - with the same contribution rates, income replacement rates, and features (incl. bridge benefits).
There should also be a concrete roadmap for merging the OTPP, OMERS, and HOOPP under the same umbrella investment management board.
Anything else is just political balderdash.


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## andrewf (Mar 1, 2010)

^I don't think any universal pension should be so generous.

You're expressing a pretty hard line by saying that everyone should get an overgenerous public pension or bust.


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## Eclectic12 (Oct 20, 2010)

HaroldCrump said:


> I suspect the vast majority of private sector workers and tax payers are not aware of the extent of public sector pension benefits. There is a deliberate lack of transparency, and a deliberate campaign to make this as opaque as possible for the vast majority of tax payers.
> I wonder how most people will feel if they knew the full extent of their tax burden that goes towards supporting these plans and benefits.


How can there be such a campaign when during previous discussions here on CMF - people keep posting publicly available web sites, listing the details?

Then too - most people I know shut down the conversation when it's their own DB pension rules being discussed. So is it really a surprise that they are tuning out the details for other DB pensions?


Cheers


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## HaroldCrump (Jun 10, 2009)

andrewf said:


> I don't think any universal pension should be so generous.


You misunderstand my position.
I am not demanding an overly generous public pension system for everyone.
However, one _already_ exists - for about 1/4th of the workforce, while the rest of the workforce has been excluded from that privileged group.

I am saying that if the provincial govt. of Ontario is serious about this idea, it should be one pension plan for all Ontario workers.
We do not need layers upon layers of DB plan administrations - a separate one for each agency, ministry, department.
The problem is very similar at the federal level as well.
And multiply this 10x times for each of the provinces.
This is nuts.



> You're expressing a pretty hard line by saying that everyone should get an overgenerous public pension or bust.


So we agree that the PS pensions are overgenerous?
Now, you are saying it is not ok for _everyone_ to have that, but it is ok for an ordained few to have it.


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## HaroldCrump (Jun 10, 2009)

Eclectic12 said:


> How can there be such a campaign when during previous discussions here on CMF - people keep posting publicly available web sites, listing the details?


I said "vast majority of private sector workers".
That is not the demographics of CMF.
There are about a few hundred regular visitors/posters on CMF and I am sure the financial and economic awareness level of CMF members is far higher than the Canadian "average".

I can tell you from personal experience that many workers with company pension plans (DB or DC) don't even know or understand their own plans.
Many folks do not participate in DC or Group RRSP plans, even those with equal company matches.

So yes, I do believe the vast majority of folks are not aware of the extent of public sector pension benefits, and the tax burden that goes towards supporting these plans and benefits.


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## Eclectic12 (Oct 20, 2010)

HaroldCrump said:


> I said "vast majority of private sector workers".
> That is not the demographics of CMF ...


Where one can run a google search to get the answers to the PS pension details - it's publicly available info.
A " ... deliberate lack of transparency, and a deliberate campaign to make this as opaque ... " would want to keep the details off a public arena such as the internet.




HaroldCrump said:


> I can tell you from personal experience that many workers with company pension plans (DB or DC) don't even know or understand their own plans. Many folks do not participate in DC or Group RRSP plans, even those with equal company matches.


These two factors IMO are the more likely reason that most are not aware of the PS benefit instead of a lack of transparency and/or secrecy.


Cheers


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## HaroldCrump (Jun 10, 2009)

Eclectic12 said:


> Where one can run a google search to get the answers to the PS pension details - it's publicly available info.


But how many people are actually doing those Google searches?
Just because some information is available online does not mean people are actively searching for it, reading it, and understanding it.

Are you saying that average Canadian workers are doing Google searches to understand the budgetary and tax liabilities imposed upon them as a result of these PS pension plans?

There are "think tanks" such as CD Howe Institute, the Canadian Tax Payers Federation, the Fraser Institute, and the Federation of Independent Businesses that often produce these types of reports and analysis.
Those do not even make a blip on the evening news or mainstream media, let alone raise any awareness.
There is sometimes a fleeting mention on business news shows such as LOLX, sometimes followed by a 3 minute interview - and that is the extent of the coverage.

The PS labor unions such as the CUPE are not interested in this type of transparency and visibility, quite the opposite.
Any time one of those guys is on TV, they want to steer the conversation away from public sector pension benefits and the tax burden it imposes.
Their response is simply : "lobby your own companies to provide equivalent pensions" - that is the classic _eat cake_ response.


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## fraser (May 15, 2010)

Bridge benefits in many private DB plans actually commence at age 55. However the employee must typically have a minimum service level AND the bridge benefits are reduced by anywhere from 3-6 percent per year from the amount that would have been payable at a certain point-perhaps age 60 or a point in time when service and age equals 80, 85, or 90 depending on the plan. 

Bridge benefits are quite common in private sector DB plans. One reason they were put in place was to encourage early retirement by older workers. No need to do that now in this age of staff reductions, layoffs, and the replacement of DB plans with DC plans.

My particular private DB plan allows me to retire at full pension at age 62 or a reduced pension at age 55 (3 percent reduction per year). It has provisions for a bridge to 65 for longer term employees, and includes health benefits. I do not find this particularly 'obnoxious' or 'gold plated'. Just a piece of my total compensation package. 


Misrepresenting the attributes of private sector DB plans in order to show that public sector DB plans are more attractive is not really necessary. They are. No one disagrees. And probably one of the largest discrepancies in terms of NPV(commuted value) of an individual's plan at retirement date is the indexing component.

The real question is how much does the pension cost, how are the costs allocated, and how does the total compensation package compare to similar levels in the private sector.


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## sags (May 15, 2010)

I doubt there will be any plans to ditch public service plans any time soon.

Are Jim Flaherty or Stephen Harper willing to give up their own public service pension plans for them and their spouses?

I would be surprised if they are.

As far as I can see, it is beating a dead horse.

Better to lobby for an expanded CPP for everyone..........despite the "think tanks" are opposed to that as well.

Edit to add link...........

Jim Flaherty and Tony Clements both qualify for a $68,000 a year pension by 2015.

As mentioned in the article, Flaherty did wind up the Ontario MPP pension plan, but the article doesn't mention the MPPs received the commuted values of the pension plan, calculated at an optimum time and rate. It was a very generous calculation, since they set their own ground rules.

Also not mentioned is the public service pensions of their spouses.

It is a little rich for Flaherty or Clements to be talking about the cost of public service pensions for everyone else.

I wouldn't count on any changes.

http://www.theglobeandmail.com/news...witter&utm_source=dlvr.it&utm_content=2311370


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