The Pitiful State of Canada Public Sector Pension Plans

http://viableopposition.blogspot.ca/2013/12/the-pitiful-state-of-canada-public.html

This week's news that Canada Post had a massive pension shortfall approaching $6.5 billion seem to come as a surprise to some people. Actually, the pension plans for Canada's public sector workers is in far worse shape than what we might think.

A study of Canada's public service employee pension plans by the Canadian Federation of Independent business shows just how pathetic the situation is  for  future public service pensioners. Most of these public service pensions are of the defined-benefit type where the ultimate pension amount is guaranteed based on salaries earned during the pensioners' working lifetime, not on the returns generated by the assets of the plan itself as in a defined contribution pension.  What is particularly frightening about this is that ultimately the Canadian public is on the hook for any funding shortfalls.   Part of the problem that taxpayers have with this issue is that public pension statistics are extremely difficult to ascertain in Canada and the actual size of the funding shortfall is a great unknown.

Here is a chart showing the financial position of public sector pension plans in Canada both provincially and federally: