Alberta is not the only province attacking workers pension plans…
P.E.I. plans overhaul of public sector pensions
October 17, 2013
Prince Edward Island plans to make changes to its public sector pensions, including eliminating guaranteed cost-of-living adjustment increases.
“The average Canadian is living longer and retiring sooner than ever before,” says Premier Robert Ghiz. “We must act now to keep our public sector plans stable, secure and affordable.”
Despite increased contribution rates and special payments, the province says its two largest public sector plans—the Civil Service Superannuation Fund and the Teachers Superannuation Fund—face unfunded liabilities totalling more than $400 million.
The government has proposed to make the following changes:
Retiree pensions will not be reduced from current levels; however, annual cost-of-living adjustments will be contingent on the fund’s ability to pay starting in 2017.
Any pension benefit earned by current employees as of Dec. 31, 2013, will not be reduced; however, pensions will be calculated using an average of their indexed annual earnings starting next year. This means, the earnings used to calculate their pension will be protected against inflation.
To address the fact that people are living longer in retirement, the government is also introducing a change in the age at which employees can draw a non-reduced pension; this change will take effect in 2019.
The changes will be introduced during the fall session of the legislature.
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