PSAC is advocating to roll back changes that the government made to its reporting of federal pension costs because they make the cost of the plan volatile.
Pension accounting decisions can profoundly impact the path that governments take when determining the affordability and viability of workers’ pensions. The accounting changes in question, made in 2018, valued pre-2000 pension liabilities in a way that falsely assumed all these liabilities would have to be paid off that year. In a recent submission to the federal government, PSAC suggests a fair accounting method to better reflect the pension plan’s real cost.
PSAC members are the primary beneficiaries of both the Public Service Pension Plan (PSPP) and of the Public Service Health Care Plan (PSHCP). Combined, these two plans represent the largest proportion of employee pension and other future benefit costs reported by the federal government. As a result they are frequently targeted by fiscal conservatives who constantly clamour for public service spending cuts.
The union’s submission to the Department of Finance argues that pensions are in fact deferred wages that members earn throughout their careers. The pension and benefits that government workers receive when they retire are not a tax-payers’ gift, but rather an earned employment right. Pensions must be treated as a long-term obligation by the employer, however, the government’s chosen accounting methods make the pension plan appear more costly than it truly is based on short-term market fluctuations. PSAC is calling on the government to choose valuation and reporting methods that are both transparent and fair.
Your union will always push to ensure that your pension is safe, secure and well-funded.
Read our submission to the federal government here.