The Public Service Alliance of Canada was banking that public servants’ paying higher contribution rates for their pensions would spare them from further changes or cuts to their pension plans. This was based on assurances PSAC President John Gordon said Flaherty gave him during a meeting with the Canadian Labour Congress’s executive council in the fall of 2010.
In that meeting, Gordon claims Flaherty confirmed the government wouldn’t be touching pensions as long as employees agreed to pay 40 per cent of the yearly contribution rates for their pensions by 2013.
The government is phasing in an increase that would boost employees’ share of contributions — which dipped to a low of 25 per cent — to 40 per by 2013. Last fall, the unions agreed to an accelerated rate increase, effective Jan.1, to ensure the 2013 target was reached.
With all the recent speculation that pension reform was on the Tories’ radar, Gordon publicly questioned how solid that commitment was. He has since written to both Flaherty and Treasury Board President Tony Clement to “clarify” if they have changed their minds and what they plan for pensions. The union has also revived its “hands-off our pensions” campaign and petition.
But Flaherty’s office said that “two-year-old conversation was taken out of context.” Flaherty’s assurance was never intended as a “commitment that it would never be reviewed again,” said Chisholm Pothier, his director of communications.
“In fact, Mr. Gordon knows our government continually reviews public service compensation and benefits to ensure they are fair to taxpayers and sustainable for employees — as we have stated publicly several times,” he said in an email.
The fall of 2010 is also when PSAC was in the throes of collective bargaining for a controversial three-year wage deal that included negotiating the surrender of severance pay for voluntary departures from the public service. Gordon said the union didn’t bring Flaherty’s pension assurances to the bargaining table, but he said public servants were aware of the commitment. He said he also met with then Treasury Board President Stockwell Day and received the same assurances.
“Now what I am hearing is that ‘that was then and this is now’,” said Gordon.
“I asked him a direct question, in front of the CLC, and took him at his word and if he’s moving in another direction, I know nothing about it and, if that’s the case, he should come clean on where he is intending to go.”
Many argue any pension review should be part of a broader examination of compensation in the public service, including wages, pensions and all other benefits. Many public servants would rather pay more for their pensions and benefits than lose them.
This week, Prime Minister Stephen Harper responded to questions about reforming public service pensions. He said no decision has been made but the issue must be examined because of a demographic shift in Canada leaving fewer people in the workforce and more older people living on pensions. He said pension plans for public servants and MPs have to be fair to taxpayers.
“We have to have a pension plan that is reasonable and attractive to get people into the public sector, but it should not be significantly more generous than what would be available in the private sector,” Harper said.
Clement, who is leading the spending review that is looking to trim $4 billion from departments’ operating budgets, is looking at “all options” to achieve those savings. Clement has criticized PSAC for failing to offer any “concrete responsible input” on how to help reduce costs.
Original Article
Source: Ottawa Citizen
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