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.