defined benefit plan

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The dirty secret behind Canada's supposedly 'successful' public-sector pensions

The fault lies with public-sector employers, usually governments, who fail to represent the public interest.


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The government sector in Alberta is unhappy and they want Premier Alison Redford and her colleagues to know it. Universities are advertising against provincial reductions in their funding; government unions are activating their members about proposed pension changes, reforms that would make them more akin to the private sector and less like a taxpayer-funded entitlement.

It is not clear why the government sector believes it must be immune from change. The case for reform is not difficult to make.


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Pay and pensions are always no-win minefields for politicians but here’s the problem when anyone thinks about that issue in isolation: it misses the massive price tag that exists for the entire public sector, of which political compensation, transition allowances and retirement benefits are only one component.

Politicians are part of a much larger public sector and the debate should always focus on this: what governments should or should not do (and from which the size of the public sector then flows); what is affordable for taxpayers; and private and public sector comparisons.