Tuesday, August 18, 2009

Generous Sask health worker pensions

On his blog "Fair Pensions for All", Bill Tufts has done a great breakdown of the Saskatchewan Healthcare Employees Pension Plan (SHEPP). For every dollar contributed by a health care employee, the province puts in $1.12. This is a pretty sweet deal for SHEPP pensioners.

The average wage in the health care sector in Saskatchewan is $46,742 per year. The average pension from SHEPP is based on a 2% per year with maximum pension at 35 years. This means a benefit of close to 70% of retiring income or $32,719 including CPP.

Of this pension of $32,719 the CPP would contribute $10,905 and the pension plan contributes about $21,814.

The big question is …
A private sector employee pays 4.95% of annual income into the CPP plan to get $10,905 per year in pension income.

The public sector employee in SHEPP pays 5.58% to get $21,814. How can the public sector employee pay in the same and twice as much in taxpayer funded pension?

Canada is addressing pension reform at all levels of government. Fairness between the public sector and public sector pensions is one the key issues that needs to be addressed.

2 comments:

percyq said...

A private sector employee pays 4.95% of annual income into the CPP plan to get $10,905 per year in pension income.
The public sector employee in SHEPP pays 5.58% to get $21,814. How can the public sector employee pay in the same and twice as much in taxpayer funded pension?


So what? The first is the CPP.
The second a defined contribution pension, which is part of the employee's compensation package. Those are two different things.
A private sector worker with a defined contribution pension (which many have) would have the same result if everything else were equal.
I'm not sure what you and Bill Tufts are whining about here: the fact that some workers have negotiated pensions?
If that is the case then the solution is for those in the private sector who want a pension to join a union and bargain collectively to achieve that end.

Bill Tufts said...

Interesting comments Percy.

Most of the public sector pensions are defined benefit. Guaranteed income beginning as early as age 50 for life.

Who do you think is the public sector worker's employer? It is the taxpayer.

Taxpayers fund it and the public sector employees enjoy it.

Who is negotiating on behalf of the taxpayer. Politicians who want harmony from the biggest voting block at all costs. Public sector unions using black mail to get gold-plated benefits and platinum pensions.

It is about Pension Envy.
http://www.thestar.com/Business/article/602771

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