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Originally Posted by Slava
What I do object to are the defined-benefit plans for public sector workers. Why should we (tax payers at large) guarantee someone a living for their entire lifetime? That's effectively what these are suggesting. And yeah, I'm off on a little rant here, but let me be clear...times have changed. Decades ago, an employee would work until age 65, retire and in a lot of cases pass away within about a decade. They worked say for 35-40 years in one organization and effectively paid their dues to get that extra decade or so in compensation and benefits. This isn't what you see today. Many of these plans offer early retirement provisions to begin at 55 or earlier. People might work for say 25-30 years in that role, and we live longer. In my profession I plan for people to live to 95 because the percentages are that high that we can't assume less! So consider this...you take a role in the public sector and work from 25-55, so 30 years. Our system as it stands pays you a salary in that role from age 25-95...how does that make sense? Why would anyone think they ought to be paid for 60 years, when they work for 30? How does that make sense in a world where we see these plans more infrequently because the deficits are incredibly difficult to manage and plan for?
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Preach it. Canada is facing a demographic time bomb of an aging population, relentlessly rising health care costs, and public sector pension commitments. Nobody wants to talk about how a model set up in the 60s is unsustainable due to ever-increasing lifespans. Already, many older rural communities devote most of their budget to firefighter and police pensions. We're whistling past the graveyard when it comes to this stuff.
I don't begrudge people their pensions. But to cling to a system that is unsustainable just so you can get the most milk out of that cow before it dries up is unethical. As Locke says, we can either rein in these defined benefit pensions, or watch them drive right off a cliff - a disaster for both the public purse and the people who expect that money to be there in their old age.
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Originally Posted by transplant99
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This is example of how we deal with this stuff. Studies point out we need some combination of substantial public spending (and service) cuts and substantial tax increases to bridge the budget deficit. And what's the response of politicians? Can't do that. Too hard. So we kick the can down the road.