Islanders and Canadians in general should concern themselves with the retirement and pension gap, before it requires action that has not been fully thought out.
The retirement and pension gap? It was revealed in mid-January by the Canadian Federation of Independent Business, in a report called ‘Canada’s Pension Predicament’.
Based on numbers from Statistics Canada, the report points out that public sector employees have a much better retirement than others.
No news there, but just how much better might surprise many people.
For example, the average age of retirement for a public sector employee is 59. Private sector workers, on average, stick with the job until they are 62, and the self-employed cannot quit until they are 66.
What’s new here is that all this has changed in the last 40-odd years. In 1970, there was no gap. Retirement age was basically equivalent for all three categories of workers. What’s new is that the gap between public servants and ordinary taxpayers is relatively new and it’s growing.
As the report points out, public sector workers enjoy a lifetime of job security and better benefits indexed to the cost of living, something which doesn’t happen often for private sector workers. They just plain and simple have a better deal than the rest of us.
Public sector employees cannot be blamed for accepting the benefits nor for trying to increase them over time through their unions.
But why should private sector workers and the self employed continue to honour their picket lines when they go on strike for more money and benefits, further widening the gap of privilege in benefits and pensions.
The government could move to close the pension gap. Someday, it will have to. The country will be unable to afford a continually growing gap.
However, doing so is likely to provoke a fight between labour unions and labour ministers. These latter, in the past, have too often found it easier to spend the public’s money than save it. That’s the root of the looming problem.
However, the time is coming when such fights may be necessary. Ordinary Canadians someday soon may notice how wide the gap has become and demand action.
And some public sector pension plans are under funded or even unfunded, meaning they are paid for out of revenues. That could cause a political backlash someday; it is also negligent for government to continue to ignore the problem.
The current set up is unjust and unfair. It also may someday be unaffordable. Time to act soon, before it turns into a crisis.
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