Men, do you suffer from pension envy? Ears, please. I said "pension" envy.
Perhaps it was a recent birthday or a study of the annual pension statement that led to an observation.
There are two groups of people in Ottawa: those with gold-plated pensions and those with tin-cup futures. One watches the other with a wary eye.
Let's face it. Ottawa is home to thousands, probably tens of thousands, of healthy, active retired people who are using their generous government pensions to buy condos or cruises or Senators season tickets, or Hummers, all without worry about longterm security.
This is not an accusation.
The experts say they paid heavily into the plan during their working years, put in their 30 or 35 years, and now enjoy Freedom 55 on Fifty-Grand.
Fine. Good on them, except to the degree this is a problem for the Canadian taxpayer; in other words, their leisure on my labour.
If you live in this town, you're surrounded by 50ish people who don't need to work anymore. Cops, firefighters, teachers, ex-military, PS workers of all kinds, old city workers.
My last statement (why have qualms about disclosure?) says my projected annual pension, if I retire at 55, is $17,999.76.
This would furnish a lovely trailer outside Rockland and a goodly amount of cat food.
So, yes, I shall be typing away well into geezerhood.
Interesting piece in USA Today last week comparing available pensions for workers in so-called "at risk" professions.
The story said a state forester in California can retire at age 50 with an annual pension of $64,206 and a projected total take of $1.9 million by age 80. (Figures all U.S.)
An Ohio wildlife officer can retire at age 52 after 25 years on the job. Annual take is $49,117, total by age 80 is $1.4 million.
Astounding, really. How is it all sustainable? Possibly it isn't, see: California comma bankruptcy.
It is a topic ever with us. (On a side note, spoke to a good old soul retired from Ontario Hydro since 1984, and he puts his pension total so far at $716,799.)
According to Treasury Board, the "population" of the federal public service in 2011 is 282,352.
In 2010, the single biggest age group was 50 to 54, at 16. 7 per cent.
The next biggest was 45 to 49, at 16.4 per cent. (The percentages were even higher in 2005.)
In other words, in the next decade, a huge number of people will be eligible to retire.
On that point, the share of federal public servants eligible to retire as of March 31 was 11.7 per cent, but only about one in five of that group had done so in the preceding year.
Overall, the retirement rate of the PS was 3.1 per cent in 2009-10, projected to rise to 3.5 per cent this year and roughly stay there for the next five.
(If we assume an Ottawa PS population of roughly 140,000, this would mean 4,900 federal workers are retiring annually for the next five years.
This does not include municipal or provincial PS workers or those from the education and health-care sectors.)
Across Canada, in 2009-10, pension benefits were being paid to 238,245 retired workers and survivors.
In that group, the average pension was $25,127.
However, the average annual pension for new retirees was $35,644, an increase of 2.9 per cent over 2008-09.
We threw out a call to the Ontario Municipal Employees Retirement System (OMERS), which has 400,000 members and $53 billion in assets. Its average age of retirement is 58. Typically, 30 years of service gives you an unreduced pension.
A spokesman countered the perception that government workers were retiring early and in splendour on the backs of the poor unfortunates in the private sector.
He said the pot of funds that provides pensions was roughly composed of: 15 per cent from employee contributions; 15 per cent from employers; 70 per cent from investments.
And, he added, individual contributions in the public sector are typically higher. So they put in more; take out more.
Well, the whole story about who's carrying whom is about as clear as mud.
But there is one intangible for the private sector worker probably not shared on the Good Ship Guv: Anxiety.
We labour here in a socalled sunset industry.
Some of us began four owners ago.
When we unplug the keyboard for the final time, do we walk into that sunset, covered in glory, or right off a cliff?
So, here's what you do. You worry, wondering how you got in the wrong club.
I understand Ms. Egan's frustration. I've covered pensions apartheid before. My mother always tells me I was part of the "wrong club" and that if I worked for the federal civil service I would have never been discriminated against and fired on flimsy grounds. True, but having consulted for the federal government on a few occasions, I can count on one hand which departments interest me. Moreover, despite having MS, I'm the type of person who thrives on "anxiety" and can't stand the bureaucratic culture of Ottawa where far too many public sector workers don't know how good they have it. Cushy jobs, gold-plated pensions, a culture of entitlement -- it all makes me ill to my stomach. If you have a government job with a safe pension, don't whine and bitch about your working conditions, count your lucky stars!
But that won't last forever. The reality is Canada will also experience hard times over the next decade. Our 'economic nirvana' is coming to an end, placing pressure on governments at all levels to make drastic cuts and tough political choices, including pension reform. Things like raising the retirement age, cutting cost of living adjustments (COLAs), and if it gets very bad, cutting pension benefits. This is the harsh reality of austerity -- just ask Greek civil servants if you don't believe me.
Having said this, I won't fall into the trap of demonizing public sector workers or their 'gold-plated pensions'. In his op-ed response in the USA Today, Gerald W. McEntee, president of the American Federation of State, County and Municipal Employees, wrote, Don't blame government workers' pensions:
Let's be clear about this: Truly abusive pension practices should be eliminated. But it is wrong to suggest that such abuses are commonplace or spreading. To the contrary, 40 states made significant changes to their pension plans during the past two years in order to reduce benefits and decrease costs.
Although inflated pension benefits typically paid to high-ranking government executives receive a lot of attention, less than one-half of 1% of pensioners obtain benefits of $100,000 or more. Indeed, pensions of $10,000 a year or less are far more common, yet we rarely see news media reports on the struggles faced by those who simply do not have sufficient income in retirement.
Our nation's public pension systems continue their robust recovery from the horrific losses of Wall Street's 2008 meltdown, earning their highest returns in decades in 2011. Although the Great Recession took its toll on everyone's retirement savings, our pension systems have continued to be an irreplaceable source of economic security for retired librarians, office workers, trash collectors and road crews who average a pension of $19,000 per year.
Impartial observers agree that the modest pension benefits of public employees are not the source of the funding challenges faced by some systems. It was the casino economy set up by the big players on Wall Street that has devastated our economy and our retirement savings. Fortunately, because our pension systems are structurally sound, they have fared much better than individual, "you're on your own" retirement accounts.
America now has three decades of experience with the defined contribution 401(k) system. The results are discouraging. According to The Wall Street Journal, the median household headed by a person aged 60 to 62 with a 401(k) has less than one-quarter of the savings needed for retirement. Expansion of this failed system to public workers will not save tax dollars because traditional pensions provide the same benefits at almost half the cost as 401(k) plans.
Americans need more retirement security, not less. While more 401(k) plans mean big profits for Wall Street, they won't help people on Main Street.
Mr. McEntee nailed it. Americans, Canadians and workers of the world need more retirement security, a form of guaranteed pensions for all. Those in the private sector are working longer hours, not because of public sector workers' pensions, but because their RRSPs and 401Ks were decimated by the sharks on Wall Street who took excessive risks to obtain outrageous bonuses. And to add insult upon injury, when they realized they screwed up, they asked the government (ie. taxpayers) to bail them out so they can continue making obscene bonuses!
Meanwhile, Main Street is still struggling with high unemployment, barely able to make ends meet. This is the true divide -- the divide between the financial elite who caused and profited from the crisis and Main Street, between the haves and have-nots -- not between public and private sector workers. Its not about the great pension divide, it's about the great retirement heist. Instead of demonizing public sector workers, we should be making the case for bolstering defined benefit pensions for all workers, including those in the private sector that face the dismal reality of pension poverty.
Finally, watch this debate on CTV between C.D. Howe Institute President and CEO William Robson and Larry Rousseau, executive vice president for the national capital region of PSAC on whether Ottawa can afford to pay for the pensions of federal employees. Incredible how Bill Robson doesn't get it, exaggerating the cost of federal pension liabilities, not realizing that Canadians are not contributing to their RRSPs, which is why we need to drop the "private sector solution" and expand the CPP for all Canadians.