Pain and pensions

Brian Jones
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Baby boomers are about to shoulder a heavy burden of blame.

Doctors have long warned, and still warn, that as boomers become seniors - the first wave turns 66 this year - their aches, pains and chronic illnesses will put a serious strain on the health-care system.

But boomers are in for another nasty shock, socially and economically. As they reach retirement age, they will realize their generation's youthful yearning for a just and egalitarian society remains unfulfilled, an improbable dream of the 1960s.

Economic inequality is going to hit a lot of boomers as suddenly as hip or knee pain. They will retire, look around and realize that their standard of living has instantly dropped below that of some of their peers.

Why? Because they don't have a public-service pension.

Busting boomers

The recent Canada Post lockout can help put this situation into focus.

You can agree postal workers deserve a decent wage, benefits and pension, and that the Conservative government's back-to-work legislation was callous and ignorant, implementing a wage increase that was even less than what Canada Post's own negotiators had offered.

But there are broader, less apparent issues involved.

Typically, the NDP seemed oblivious to these larger issues, and predictably jumped on side with the Canadian Union of Postal Workers by staying up late for an all-night filibuster. It looks good in the next day's newspaper, but Union Jack - as one witty wag dubbed NDP Leader Jack Layton - should broaden his scope.

After all, it is possible to be leftist and pro-union and still point out that the demands of public-sector unions are leading to more inequality, not less.

Baby boomers, as they reach retirement age, are going to discover this dilemma quite quickly and bluntly.

There will be three classes of boomer retirees: at the top will be those who had government jobs, and have a public-service pension; in the middle will be those who worked in private industry and whose employer offered a pension plan; at the bottom will be the masses, the grey peasantry who toiled in private industry or self-employment and had no pension plan, and thus will have to survive on a meagre retirement income from the Canada Pension Plan (CPP) and Old Age Security.

A recent Statistics Canada report points to what is coming. Only 39 per cent of Canadian workers have a pension plan through their employer.

That number drops to 25 per cent among workers employed by private industry.

In contrast, 80 per cent of people on a government payroll - civil servants, postal workers, teachers, university employees, health-care workers - have a workplace pension plan.

This pension disparity is essentially a three-tiered system that will result is huge inequalities among retirees.

Strangely enough, the awful prospect of a two-tiered health-care system raises loud cries of opposition, but the current three-tiered pension system is accepted with eerie silence.

To add to the injustice, those on the bottom and middle tiers of the pension pile are paying for - and subsidizing - those who are in the top tier.

The union movement has long ignored the vast differences faced by public-sector workers and private-sector workers.

They prefer the comforting rhetoric that says what's good for one is good for all.

This is mere self-justification.

A raise and better pensions for postal workers will not do a whit for people working the counters at Tim Hortons or the floors of Wal-Mart.

To assuage their apparent guilt, the NDP is now - finally - pushing for improvements to the CPP, which even some Tories recognize is due.

The unions are lagging, especially those representing public-sector workers.

As George Orwell might say of the situation, all unions and workers are equal, but some are more equal than others.

Brian Jones is a unionized desk editor at The Telegram. He can be reached by email at


Organizations: Canada Post, NDP, Canadian Union Postal Workers Union Jack Statistics Canada Tim Hortons Wal-Mart The Telegram

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Recent comments

  • Don Blackmore
    July 05, 2011 - 10:06

    The "third tier"? I was a ragged ars, just like them! Sitting in a seat in a rural, three classroom school in the early 50s, with the same frazzled teacher, teaching four grades, and all courses! While they were skipping class or flicking "spit balls" when in school, I was attentive to the teacher. Daily, after school, I was busting my ars helping to support my younger siblings. And, when there were a few minutes before bed time, I studied and read what was available. Most of them left their books, where they could avoid them, and often mocked those who came to school prepared. And, they did a minimum of chores, and never learned any basic work skills, or any appreciation for a "earned dollar". For them and their parents, teachers didn't "earn their keep", and "didn't know what work was". (Anti-intellectualism at it's worst!). And, there are many who had it much worse than I, and got an education and are now living comfortably. There is a lot of envious people in this province, who blame their woes on others. Jones is very naieve,or pandering to the populace for popularity points.

    July 04, 2011 - 23:30

    Mr. Jones makes some good points and some bad ones!! Don't get all in a tissy, because some Fed., Prov., and Municipal employees, have good pensions !! They have paid for it , in Spades!!! Work, and engage workers to demand similiar pensions from their employeers!! Can they afford it ?? Of course they can, but they are all now jumping on the band wagon of - START NEW EMPLOYEES AT A LOWER RATE OF PAY, AND HAVE DEFINED PENSIONS FOR NEW EMPLOYEES!! It seems by the post of - M. , good pensions are nothing but Ponzi schemes, and all employees should fend for themselves in retirement. Let me tell you something , M. , private enterprise in many, many cases, could have given their workers a good Pension but because of GREED, they the workers, who built the company, are left with little but CPP and Old Age Pension to depend upon, for the rest of their lives!! Before you make a stab at the unions , just think of the Private Companies who have made billions in this country. OOPPPPSSS , not the company, the workers of the company, who have made billions for their company ,but have never given those same workers, who made the billions, a decent pension to carry on, in their latter years. Don't blame unions, M. , blame yourself for not organizing!! Beef up the CPP contributions on all employees and employers, for a better and more, just return, for the common workers, that makes this country, as great as it is today. SKIP THE JEALOUSY M. !! DEMAND MORE FROM GREEDY EMPLOYERS!!

  • Wants to retire
    July 04, 2011 - 15:40

    No doubt pensions have to be revised.But boomers have been paying into them for decades.Fine for someone to suggest people pay into a defined contribution plan,but does the average person know where to invest their money so it will grow for retirement?I think not,so financial advisors would agree with a defined contribution.That industry will gain tremndously as people put their faith and trust in those who who can sell a pension plan to the average Joe who hasn't a clue about investing..Are there any more Bernie Made-offs (with billions) out there I wonder?Hard to put a salary away for retirement in these days when companies and corparations are trying to claw back what they are paying workers in wages and benifits,and at the same time paying execs and ceo's insulting salaries and bonuses,to the average person, to raid and pillage on behalf of the shareholders.Yes folks,there is going to be two classes of people it seems,those who ride in and raid and pillage the village,and the peasants who live there.

    • Ron Noel
      July 05, 2011 - 09:09

      Mr. Jones failed to mention in his story that federal retirees with a superannuation (pension) once they begin to collect CPP have essentially the amount of their CPP payments "clawed" back or deducted from their monthly pension amount even though during their career they pay into both pension plans; also, defered salary was also applied to their superannuation! ! The RCMP and the Military a both seriously affected by this clawback which was put into place back in 1966 by the government without representation at the negotiation table by either the RCMP or the Military! Several organizations like to refer to retired feds as fat cat pensioners and this simply is not true! As for improvements to the CPP, such as expanison, I sugget Mr. Jones read the lastest CD Howe Institute Background No. 137 for the perils in that endeavor! If he cannot find it, have him send me an email and I will provide it for him.

  • M
    July 04, 2011 - 12:13

    I do not always agree with Mr. Jones but he is on the mark with his opinion here. The greatest Ponzi scheme left in our society is the indexed pension plan offered to federal government workers. With people living much longer than when these plans were first envisioned and created, the required payout will be largely unsustainable based on present contributions by government and workers. This will mean that future taxpayers will be forced to pay for incomes of retired workers and their inflation index, an amount that will be beyond the amount that their tax dollars are required to pay for the workers still working at the time. What a scam. Most fiscally responsible thing the fed government could do would be to switch all future federal government workers to defined contribution pension plans. This is the most fair system as the liability is dealt with on a year to year basis as opposed to in the future, and it will place some responsibility with the worker in terms of their saving some of their income to offset the effects of inflation during the rest of us mere minions have to.

    • Townie
      July 04, 2011 - 16:39

      Why don't you tell us how defined benefit pensions are unaffordable for Nfld Power employees when they don't make any contribution to their plan. Oh yes that's right they get subsidized by rate payers so that's OK.

    • Ron Noel
      July 05, 2011 - 09:15

      Anyone who refers to federal retiree pensions as a "ponzi" scheme simply has not done any research nor does that individual understand the federal pension system. As a retired member of our military, I paid into both a military superannuation pland and the CPP! As compensation for lower salaries, we were afforded what we were led to believe would be our 'garanteed' pensions. Well me lads, when I turn 65 and start receivng the CPP, an amount basically the same as my CPP payment will be deducted from my military pension, thus I will be no further ahead than when I was 64!!! Please do some research - we paid for and deserve our pensions - if a private company tried the same "claw back" as the federal government than that would indeed by a "ponzi" scheme perpetrated by the employer!

  • Race to the Bottom
    July 04, 2011 - 08:13

    So your suggestion seems to be that the so-called “top-tiered” workers (never mind that their incomes and pensions are far below those of the stratos-tier, ie. CEOs who have gained handsomely from government bailouts and collect millions in bonuses) should surrender what they have gained. If the private sector fails to provide a pension plan or decent wages for its workers, it’s hardly the fault of the unions. The union movement has not abandoned the rest of the working class and has been working to organize those retail workers including those at Wal-Mart in the face of a company that has used every tactic to intimidate, threaten, and spy on its workers. One other thing, the NDP hasn’t *just started* calling for improvements to the CPP to “assuage its guilt;” it has been Party policy all along.