The Canadian Taxpayers Federation wants government government defined-benefit pension plans to be axed, because there is a risk that taxpayers may have to fund them.
The CTF’s Prairie director is Todd McKay. He explains that defined-benefit pensions are the guaranteed pensions that 80 per cent of government employees have compared to 10 per cent of private sector workers.
He says total unfunded liabilities for federal government employee pensions sit at $166-billion.
MacKay realizes it won’t be an easy job to shift unions over to defined-contribution plans, but adds the private sector has been doing it for years.
For example in the auto sector, the unions realized the plants could go under, so they switched plans as part of the effort to keep things running. Saskatchewan has done this before, MacKay says.
Back in the 70s, leadership looked at the math and began the conversation, which led to some government employees moving to a defined-contribution plan instead.
Not all provincial employees made the switch, but MacKay says it was a challenge that the government of the time took on, and he would like to see the federal government take a lesson from what worked in Saskatchewan.