PCs Mute on Pension Issue
Sep 20, 2011
MGEU President Lois Wales has authored a letter to the membership with specific regard to public pension plans. In particular, she addresses a response from the Manitoba Progressive Conservatives to a questionnaire sponsored by the Canadian Federation of Independent Business (CFIB).
The CFIB asked if each of the political parties would “address the public/private sector pension gap by gradually moving new hires from defined-benefit to defined-contribution pension plans.”
The PC Manitoba answer to this question stated that, if elected, they would “review approaches to decreasing the public/private sector pension gap.”
Now while it sounds fairly innocuous for someone to state that they would “review” something, when it comes to issues as important as pensions and government security, the MGEU believes that its’ members deserve greater clarity and disclosure.
It goes without saying that any such “review” wouldn’t lead to improvements in pension plans in the private sector. What is much more likely is that a PC government would attack the pensions of those who pay into public pension plans, like MGEU members.
Why would businesses, corporations, CEOs, and banks want paid lobbyists who work for organizations like the CFIB to pressure the government to switch public pension plans from defined-benefit to defined-contribution plans? It’s important to understand the difference between these plans. Generally speaking, a defined-benefit pension is largely unaffected by what’s happening in the world financial markets and allows you to protect (and predict) what you receive when you retire.
Conversely, a defined-contribution pension is completely dependent on what happens in world financial markets (so things like the recent financial crisis would be a serious concern) and it is difficult to predict what one would receive when retiring. A defined-benefit plan provides much more security for plan contributors and a stable guarantee of pension income in later years, which is why most people prefer these plans.
Some might wonder whether a PC government would really act to gut public pension plans. But it’s important to remember that the federal Conservative government has already taken steps in this direction with regard to workers at Canada Post and Air Canada. And, in the United States, some municipal governments have eviscerated the collective bargaining process entirely, walking away from their pension obligations in the process.
The public pension plan improvements that Canadian workers have been able to achieve over many years have come from public sector employees that have accepted lower wage increases and that have committed to increased personal pension contributions.
They should not be put at risk by political parties under any circumstances.
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I guess one would assume that “review approaches to decreasing the public/private sector pension gap” would mean eliminating defined benefit plans. Why is it that conservatives feel the need to weaken decent benefits rather that bring up the standards to narrow the gap? It's socialism, but in reverse.
Jeremy - 2011-09-20 14:56