The Canadian Federation of Independent Business (CFIB) is calling on the government to end the “bridge benefit” perk, an incentive for government employees who retire early.
The “bridge benefit” varies across public sector pension plans, according to the CFIB, and can benefit a typical government employee an amount in the range of $7,400 to $8,800.
“When workers in the private sector choose to take CPP/QPP early, they receive a lower benefit for the rest of their lives,” said the CFIB in a news release. “For most public sector workers, however, the bridge benefit essentially ensures that they receive their full CPP/QPP benefits even if they retire well before age 65.”
Read: ORPP delay welcomed, but more support needed
In 2010-2011, about 55,000 federal civil servants received the perk at a total cost of more than $385 million, according to the CFIB. “With massive deficits ahead for most provinces and the federal government, making changes to this entitlement for the future could provide meaningful fiscal relief,” said Dan Kelly, CFIB president.
“Government workers already enjoy much more generous pension benefits than most Canadians could dream of. Asking taxpayers to give even more so government workers can get those rich benefits sooner is, frankly, completely unfair.”
More than 80% of public sector retirees who left the workforce between 2007-2011 did so before age 65, compared to 60% of private sector retirees, and 47% of self-employed, according to the CFIB.
Read: What does the industry expect from CPP talks?
“Some government organizations, including the Bank of Canada, have already seen the light, finding the bridge benefit to be unsustainable, and have eliminated it from their plans,” said Kelly. “CFIB recommends that governments across the country follow suit and move quickly to return fairness and sustainability to the public sector pension system. It’s time to take this bridge down.”
