should we worry about duffy,or...........

[growler]

Canadian public sector pension plans aren’t properly funded and can’t – or soon won’t be able to – meet their obligations, which is bad news for seniors who need them to retire.

In all the noise of the past weeks about who paid off and tried to silence whom, and who abused their loose-as-a-goose Senate expenses and who didn’t, there was a whole lot of other news that we really ought to be paying attention to that got no coverage.

Newfoundland and Labrador is a small province, population wise, with less than half a million inhabitants. About 230,000 of those are in the workforce, and of that, nearly 39,000 of them are provincial public servants.

This week’s Conservative Party Convention has multiple motions hitting the floor, from riding associations in three different provinces, essentially aimed at gutting the power of trade unions (with an especial eye on public sector ones) in one way or another. One of the rationales for doing that is to rein in the negotiating leverage of those unions to get “gold-plated” benefits (including pensions).

Governments all across this country — the federal one, all the provincial ones without exception, and pretty much every municipality, have signed contracts promising pensions to their workers.

Fair enough. What has had rather less attention paid to along the way — by citizens and politicians alike — is the liability this has built up.

That most governments took the boom years of the 1990s and early 2000s as a good excuse to hold “pension holidays” and lower or eliminate their contributions to pension funds, on the grounds that the funds already invested were earning more than enough of a return to make new contributions unnecessary, didn’t help.

Newfoundland and Labrador has always been a less-well-off part of the country (indeed, the former Dominion of Newfoundland gave up its independence for financial reasons, and joined Confederation to try and improve its lot). But you can’t blame our easternmost province for having ignored matters.

They first started dealing with their pension obligations in a serious way — not just making the annual contributions required by the employer no matter how well the fund was doing, but adding supplemental contributions with a weather eye on the sheer number of Newfoundlanders who would be collecting those pensions — in 1997. They’ve been contributing ever since to try and close the gap.

A gap which keeps widening. Remember the roughly 39,000 current civil servant employees paying in as well? Well, there’s about another 30,000 already retired, and drawing out what was promised to them.

So far, Newfoundland and Labrador have put an extra $4.5 billion into their provincial pension plan, and it’s still $5 billion under water relative to the payments it’s going to have to make. Add those two together and it works out to a bailout for the plan, to honour the promises made, of about $250,000 per worker in the province.

That’s just the provincial plan, of course. Municipal plans in the province have their own shortfalls to deal with. So does Memorial University, the health system, and the federal workers in the province. Everyone’s plan is under water and sinking.

Head west, through the rest of the Maritimes, across Québec and Ontario, through the prairies to the Pacific shore and it’s the same story. The University of Toronto has demanded supplemental allocations from operating budgets for several years now to deal with its pension shortfalls. There’s red ink everywhere.

We’re not where Vallejo, California, and Detroit, Michigan are — with pension holders in bankruptcy court trying to get a judge to authorize the sale of civic assets to give them a few cents on the dollar — but we’re closing in on it.

To put Newfoundland and Labrador’s position into context, the total provincially owned and operated public infrastructure — water systems, roads and bridges, sewage plants, etc., outside of buildings — is worth $6 billion to repair and replace, or what the province is short on its pension promises.

Are public sector pensions “gold-plated”? That’s a political question. All pensions, of course, are a form of legal Ponzi scheme, where those now working are paying in for the benefit of those now drawing the money out. Such “funds” as exist are nowhere near enough to meet the commitments (in the public or private sectors).

Yet people have to live in their retirement years — and with early retirement programs (often triggered by “special pension contribution” needs) pushing people out of work in their fifties, “retirement” could be a long payout indeed.

Newfoundland & Labrador have not ignored the problem, but they can’t solve it. Neither can any of the other jurisdictions. This is what we ought to be talking about, instead of Mike Duffy.

[observer]

Very eye opening, growler. But, by the way, it DOES seem that Mr. Duffy and cohorts WILL be receiving THEIR pensions from the Senate!

[kishgo]

AND benefits! Very important especially for Mr. Duffy who just underwent a heart procedure. I miss my benefits even though I am in excellent health. Thank goodness.

[growler]

a bit more about Mr. Duffy and his expense audit.
the audit has cost more than the expense was !
almost $50,000. more up to now.
so instead of just the $200.000. or so they think it was before, that was already recovered, it's cost the taxpayers more than it was before. (roughfigures,and the conservatives, and Duffy paid back some of the money owed, but we pay the audit, not them !)
so has this done anyone an good, or just been wasted time and money?

[gale force]

According to a newspaper story today, there was a sharp decrease in expenses claimed by other senators in the last little while, so perhaps it has been of some benefit!

[kishgo]

At this point in time, if I were a senator, I'd watch every single penny! (But it should have been that way all along....)

[observer]

Unfortunately, I'm sure it's going on all over - in our government - in that of the US - and we KNOW it is in some of the despot governments - to a degree that we can't even comprehend. Entitlement!

[kishgo]

Entitlement. Perfect word.

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