Public Sector Unions

Toronto Sun: Feds have $65B pension funding shortfall: C.D. Howe

“Most federal employees in this country have what’s known as defined-benefit pensions, the most stable of all benefit plans since contributions are fixed. And higher-income public servants often qualify for special retirement compensation arrangements.

Backing promises to public service workers, the RCMP and Canadian Forces would require contribution rates of 35%, 41% and 42% of pay respectively, the report says citing the chief actuary.

Actual contributions to these plans today are 19%, 22% and 21% respectively. On average, two-thirds of costs are borne by the government.”

I am going to open a huge can of worms on this topic.  I would contend that public sector unions should be banned.  I have no problem with private sector unions.  If the employees want to unionize at private company they can do so at their own peril.  The owner of the company can simply close shop and open a new one if they can’t compete in the market place saddled with the extra costs associated with a union work force.

The problem with public sector unions is that the Government typically has no recourse.  They can’t just close up shop and are stuck with the often over the top demands of the unions.  The golden pensions are one of these issues.  The public sector needs to be scaled back and these defined benefit pensions should be the first item on the chopping block.  Government employees should open an RRSP just like the rest of us and not expect to paid their salary & benefits for the rest of their lives.  Government services should be provided at the lowest cost and not a way to create high paying jobs to Canadians.   Add the provincial and municipal unfunded pension liabilities and the number is much more that $65B.

New Jersey is an example of how out of control these commitments can get:

“One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life and nearly $500,000 for health care benefits — a total of $3.8m on a $120,000 investment. Is that fair?

A retired teacher paid $62,000 towards her pension and nothing, yes nothing, for full family medical, dental and vision coverage over her entire career. What will we pay her? $1.4 million in pension benefits and another $215,000 in health care benefit premiums over her lifetime. Is it “fair” for all of us and our children to have to pay for this excess?”

New Jersey Governor Chris Cristie is also an example of how to handle unions:

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5 Responses to Public Sector Unions

  1. Zip says:

    The Department of National Defence does not have a union.

    Yes, we have a nice pension plan but there is a reason for that. You don’t find too many 19 year olds fresh out of high school losing their lives and or limbs or sacrificing a “normal” family life when they become a teacher or a accounts payable clerk in PSAC.

    • Dan says:

      I would be hard pressed to try to suggest that Canadians serving the military have their pension taken away or eliminated in the future. My point was that these ‘defined benefit’ type pensions combined with unrealistic employee contributions / lifelong benefits are going to bankrupt us. Cut 95% of the Federal bureaucracy and related overhead and there would be a lot more room for expanding military benefits and support which I would be behind 100%.

      • cmc says:

        yes wise Dan, you are the man!

        • cmc says:

          There is such a disconect between people and the idea that things are free. Governments and unions don’t have any money, they are basicly parasites that live off working people. Governments should have a limited role but public unions need to go. They are corrupt and want one world governance. People need to wake up, whos standard of living do you think is going to go way down in world unions.

  2. Zip says:

    I have no problem with the original concept of unions (like minded people gathering together to enter into collective bargaining) but they should be voluntary and in no way infringe on a business owners right to hire and fire whomever he may please.

    It’s a simple question of property rights. Because I own the company there is no one who can tell me who I can or can not hire to work for me because… I OWN THE COMPANY!

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