The health plan, negotiated by the union-management National Joint Council, allows anyone who collects a public service pension to join the health plan. Under the pension legislation, anyone who contributed to the pension plan for two consecutive years is eligible for a pension.
But with the new proposal, the government argues that working two years in the public service is simply too short a time to get access to the bureaucracy’s health care plan and wants it extended to 10 years. It also wants retirees to pick up 50 per cent of the cost of contributions rather than the 25 per cent they pay now.
The Public Service Health Care Plan reimburses members and their dependents for a range of health-related goods and services that are not typically covered by provincial and territorial health plans. The cost of the plan is managed centrally by Treasury Board.
Until now, the government’s various measures to rein in compensation costs of the public service have been mainly targeted at existing employees or new hires, through initiatives such as pension reform, revamping sick leave and taking away voluntary severances.
Yet the government flagged its intention to review retiree benefits in the last federal budget, as part of a more general plan to bring public sector pay and benefits in line with the private sector.
Treasury Board President Tony Clement has also said that he has no further plans for changes to the pension plan and most recently said overhauling sick leave was the only big item in “the shop window” now.
It’s unclear what is exactly on the table because the proposal was laid out at a secret meeting of the joint committee of unions, management and retirees who oversee the health care plan. No one at the meeting would discuss the proposal, which has leaked out and sparked much speculation on what benefits are next on the chopping block.
The proposal seems to have come as a surprise to the joint committee, which had been waiting for more than a year for Clement to approve some minor coverage adjustments it unanimously supported for the health plan. Clement, who has final say on the plan, finally got back to the committee on those adjustments but presented the committee with the more ambitious retiree proposal.
It’s unclear whether Clement’s position is negotiable, and so far none of unions under the umbrella of the National Joint Council would comment.
Clement wouldn’t comment about the proposals either, though his office noted that the government brought in 50-50 cost sharing between the government and public servants for the pension plan and is pursuing other initiatives that are “fairer” to taxpayers such as revamping sick leave, eliminating severance pay and beefing up performance management.
“As outlined in budget 2013 our Government remains committed to reducing the cost of the public service on taxpayers and bringing public sector entitlements more in line with the private sector,” said spokesperson Andrea Mandel-Campbell.
About 185,000 retirees are represented by the National Association of Federal Retirees (FSNA), which also wouldn’t comment on the proposal. Other than pensions and health care, retiree benefits include membership a dental plan, as well as supplementary death benefits, which is a life insurance plan they pay for while working and can continue after retiring.
About 500,000 retirees and public servants belong to the various plans.
This isn’t the first time the Conservative government has moved on pensioners’ benefits. Several years ago it increased the contribution rates for the dental plan that was created for retirees in the early 2000s as part of the package of concessions the Liberals made after scooping the $30 billion surplus from the public service pension plan. The government paid 75 per cent of the contributions and moved to a 50-50 cost sharing with retirees.
The supplementary death benefit also has a $2.4 billion surplus that’s mushroomed as the longevity of public servants after retirement increases.
The death benefit is a life insurance plan that will pay a public servant’s beneficiaries twice their salary if he or she dies before age 65. That amount, however, shrinks as the public servant ages at a rate of 10 per cent year until age 75. At that point, the maximum payout is $10,000.
Original Article
Source: ottawacitizen.com
Author: Kathryn May
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