Are our pensions in danger? Canadians have the right to know the truth! A message from CAPE President Claude Poirier

January 28, 2010 For over six months, rumours have been swirling about the public service pension plan. Clearly politicians make a habit of targeting public service employees to garner support from the general public.
However, when these politicians use “independent” agencies to justify their position, the Canadian Association of Professional Employees (CAPE) feels it is its duty to step in. The C.D. Howe Institute released an “independent” study in December that was most likely commissioned, directly or indirectly, by someone on the Hill. According to the study, the federal public service pension plan will be facing a major shortfall in the near future.
Nothing could be further from the truth! The study is based on the premise that the plan would cease to exist tomorrow. In reality, a pension plan should be assessed as if it was continuing which is the current case. Let me explain: new contributors will continually be added and the required resources will undergo ongoing analysis. Contrary to the approach taken by the C.D. Howe Institute, the Government of Canada’s Chief Actuary has been operating based on the assumption that the plan will continue. So have all the experts in the field, whether from the banking or insurance world (primary retirement annuity providers). The C.D. Howe Institute stands alone in its analysis. These are “independent” experts – working on behalf of the government.
Furthermore, C.D. Howe ignores two very significant facts in a study that should be a little more serious. First, the employer (the Government of Canada) granted itself a contribution holiday in the early 1990s. Indeed, one of the partners decided that the plan was healthy enough for it not to contribute for a number of years. The study is silent on this obvious abuse by the government. Second, this same government deemed that the plan had unjustified surpluses and decided in the late 1990s that it had the right to take possession of the money paid by public service employees. This way, $33 billion disappeared from the fund and were allocated to pay down Canada’s debt. The study makes no mention of this scam. Those who commissioned the study failed to mention this.
There is an expression in French: “If you want to get rid of your dog, you just say that it has rabies”. This is exactly what the Government of Canada has done with its employees: their benefits are too generous so it changes its policy. What if it were the rest of the Canadian public that was not being treated properly? After 15 years, MPs receive 60% of their best five years’ average earnings. They will have trouble explaining to Canadian voters why they are attacking public service employees, who receive the same benefit only after 30 years. And let us not forget that public services employees contribute to the plan – it is not a gift.
We should have recognized this technique. Former U.S. President George W. Bush used the term "weapons of mass destruction" so much that he managed to justify invading Iraq, even though the much-touted weapons of mass destruction were never found. Our own Bush has been saying at every opportunity that federal public service employees have a generous pension plan. If he keeps repeating it, he will succeed in convincing Canadians that he is justified in making cuts to the plan. What an unwarranted lie!
I am going to close with a warning. Some of you, mainly those of you who are eligible to retire because you have turned 55 and have completed 30 years of service, are afraid you might lose that right. Don’t get caught up in the rumours. CAPE is working with the other federal public service unions and monitoring the actions your government is taking.
To that end, the 18 public service bargaining agents met on January 19 and 20 in our offices to discuss the situation and put a strategy in place to deal with this new form of white-collar crime. On January 21, we also met with Treasury Board representatives and asked them questions about their role in the matter. It appears that the issue is completely political.
The Vincent Lacroix, Earl Joneses and Bernard Madoffs of the world are ending up in jail. The white-collar criminals in power in Ottawa should know what to expect once the public has judged their actions. Meanwhile, in cooperation with the 17 other public service unions, CAPE will be ready to defend your interests.
Claude Poirier
President