Canada Post union pushes for DB plans for all members
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Paradis“. . . Our position is that instead of defined contribution, we should be permanently exempt from solvency funding.”
This is akin to saying “We insist on being able to take time off for skydiving lessons, but we should permanently exempt from the parachute requirement.”
The objective of having all members covered by DBs is the correct one. A little coaching in the fundamentals of pension funding should bring him around to how to align the objective with the means to its achievement.
Monday, March 06 at 11:10 am | Reply
Whether it is Canada Post or any other crown corporations they will eventually all push for the maintenance of DB plans for a number of financial reasons and to maintain some sort of equality with the public sector employees’ plans of all three levels of governments.
It is mandatory for the Trudeau government to come up with a National Policy on retirement. It can then be personalised at provincial and municipal levels for the right socio-demographic-economic reasons as opposed to a whim and an unjustified desire.
Until then we will continue to have these isolated discussions with minimal results. The income and intergenerational divides that we are witnessing will also be further maintained.
Accompanying this national policy, is the introduction of data standards in the field and cutting edge IS/IT tools to support the financial and administrative management of these plans. Is the task humongous? Absolutely… We need to start somewhere.
I have attempted to reach the Trudeau government via the front door of three ministries to create a PPP on the IS/IT portion of my work; sadly in vain.
Monday, March 06 at 12:42 pm | Reply
You can have the position that DB is better than DC, and I would agree. But you also need to address the cost of providing DB benefits and articulate how salary and non-pension benefits can be adjusted downward to compensate for the ever increasing costs of DB promises. Whether you are exempt from solvency or not doesn’t mean those costs aren’t real – you are just changing who pays and when.
No one saw in advance interest rates falling as low as they did in 2007 and no one saw in advance the last decade of interest rate manipulation by our governments. The assumed low cost of these generous pensions made in the 1980s is about half of what it actually costs today. So where does that money come from if we assume tax payers do not have unlimited funds to contribute?
Monday, March 06 at 8:48 pm | Reply
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