Cana­dian tax­pay­ers sub­si­dize gov­ern­ment em­ployee pen­sions to the tune of $22 bil­lion a year

Asian Journal - - WORLD -

Van­cou­ver: Gov­ern­ment em­ploy­ees don’t pay the full cost of their de­fined-ben­e­fit pen­sions. Tax­pay­ers pro­vide a $22 bil­lion an­nual sub­sidy by as­sum­ing undis­closed in­vest­ment risks for which they are not com­pen­sated, finds a new study re­leased by the Fraser In­sti­tute, an in­de­pen­dent, non-par­ti­san Cana­dian pub­lic pol­icy think-tank.

“The is­sue is not whether gov­ern­ment em­ploy­ees should have de­fined-ben­e­fit pen­sions, but rather how much they should pay for these pen­sions,” said Philip Cross, Fraser In­sti­tute se­nior fel­low and co-au­thor of Risk and Re­ward in Pub­lic Sec­tor Pen­sion Plans: a Tax­payer’s Per­spec­tive.

The study, co-au­thored by pen­sion ex­pert Mal­colm Hamilton, finds that de­fects in pub­lic sec­tor pen­sion ac­count­ing let pub­lic em­ploy­ees pay less for their pen­sions than they should and less than pri­vate sec­tor work­ers would be ex­pected to pay.

“There is noth­ing wrong with gov­ern­ment work­ers hav­ing good pen­sions – as long as they pay a fair price for these pen­sions.” com­mented Cross.the pa­per fur­ther notes that the ap­proach taken by pub­lic sec­tor em­ploy­ers is pro­hib­ited in the pri­vate sec­tor where ac­count­ing stan­dards re­quire em­ploy­ers to prop­erly mea­sure and dis­close pen­sion costs.

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