It is ironic that the Canadian Taxpayers Federation (CTF) called for reform of public-sector pensions the same day the Royal Bank of Canada reported a 14-per-cent boost in earnings of Canadian defined benefit pension plans. The past year has shown a positive turnaround for defined benefit plans that is likely to continue. The CTF fails to acknowledge that public-sector pension plans are deferred wages negotiated between unions and employers. Workers contribute into pension plans in lieu of higher increases to wages or other benefits.
There is substantial evidence that defined-benefit plans are a more efficient way to save for retirement than RRSPs because of lower management fees. A report on B.C.’s pensions by the Conference Board of Canada noted that not only do people save more for retirement through a defined-benefit plan, but about 70 per cent of these additional savings are invested in the Canadian economy – a positive impact on economic growth.
Too many Saskatchewan workers do not have a workplace pension. According to the provincial government, only 49.2 per cent of paid workers here participate in a workplace pension plan. The solution is not to take away what others have achieved, but to extend pension coverage to more workers.
An expanded Canada Pension Plan (CPP), which the Canadian Labour Congress and eight of ten provinces support, would be one way to ensure all Canadians can retire in dignity. Unfortunately, Saskatchewan is one of two provinces that does not support an expanded CPP. Tom Graham, Regina Graham is president, CUPE Saskatchewan.