Pensions and paying the piper

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I would like to comment on a letter in your March 4 edition by Don Ash of the Newfoundland and Labrador Teachers’ Association on defined benefit pension plans (“Pensions and a reasonable standard of living”). He takes aim at business and the federal government as opposing defined benefit pension plans, rather then looking within.

Teachers are an extremely privileged group in Newfoundland society, thus I fail to see the connection he is making between teachers and those in need of government support.

On the one hand, Mr. Ash says that defined benefit plans are generally not funded by the taxpayer, and in the next breath says that his premium contribution is matched by the government. These are taxpayers dollars and the public service and teacher plans are in deficit, meaning that the taxpayer will have to pay more than 50 per cent of teacher salaries, averaging $80,000 per year.

Defined benefit pension plans for professional groups should be paid for by those who benefit from them, thus leaving more money for the disadvantaged in our society. There are no other funding sources than the taxpayer. Teachers are not amongst the disadvantaged; in fact, they enjoy a very rich contract of salary and benefits due to the large influence of teachers in our elected government. Teachers count training as work experience and many retire in their early 50s and receive benefits for as many years as they have worked. The teacher pension plan contribution is insufficient. Contributions will need to increase or the age of retirement increased.

The issue is not defined benefit pension plans but one of who should pay. Is it fair that I should have to work to at least 65 years of age on half a teacher’s salary to help pay for teachers to retire at 50 years of age?

Thank you, as I salute the good work of teachers.

Harold Tobin

Trepassey

Organizations: Newfoundland society

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  • Ger
    March 16, 2014 - 10:45

    Hey Harold and those complaining about teacher's pensions. I started as a teacher, but, could not deal with the every day issues--so now I am working elsewhere and am very content with what I am doing. If teaching is as good as you people describe it--then I have to ask the question.... either teachers are over intelligent?? or you people are not too bright!! You all could have been teachers but choose not to. Oh, by way, Joey gave us free tuition so money is not an issue.

  • Pretty good
    March 14, 2014 - 22:56

    If you start with govt after school at 18 and work to 55, you get 37 years. Your net pay doesn't change much going from salary to pension. I would say that is pretty good. I believe teachers have better than that and MHAs have better than that again. Lately we hear about the plans being in trouble. It is easy to see why. People live longer so they take more out of the plan. Contribute about 1,000 per year for 37 years and you have it back in less than 2 years, depending on your salary. How can it continue?

  • Zolu-one
    March 14, 2014 - 17:13

    Hey, what happen to the money that teachers paid into their plan for years that was rolled into general operating funds for government? For years the government spent the premiums that were payed in by teacher and government failed to put in their share of the premiums. Is there any wonder that the teachers' pension plan is under funded? They stole the premiums and used it for years to do what they felt like doing. Don't you think the government has no responsibility here to the teachers?

  • Mun Boy
    March 14, 2014 - 13:37

    Right On! Harold you hit the nail on the head.

  • Interested Party
    March 14, 2014 - 12:20

    Teachers pensions are now harmonized with CPP pensions, but only since the last few years. Their pension will not be harmonized for the years prior to that decision. My point is that younger teachers and the public are paying for the rich pension benefits of the previous government administrations, such as retirement after 30 years service, of which 4 could be university years, and accruing at 2.2% per year rather than 2% like other public service pensioners. It is only in the last few years that teachers pensions were brought in line with other public servants pensions. This is not to attack teachers, but to point out facts concerning the teachers pension plan which is never brought forward by teachers or the union.

  • QKSLVR
    March 14, 2014 - 10:02

    Thank you Mr. Tobin for reiterating much of what I said in my response to the original article. Taxpayers are no longer willing to pay for Defined Benefit Pensions for public servants. We know that we can't afford it and it is time to move the risk of under -performing markets to those who benefit. The private sector started this years ago - it's time!!

    • Joe
      March 14, 2014 - 10:36

      So what you are saying is you no longer want the services of teachers, doctors, nurses,engineers and any other trained group. Pensions are part of a compensation package and to get one benefit you have to give up some benefit in another area. I guess you could always pay these groups 2 or 3 times what they receive now and they would be happy to give up any pension rights. Nobody works for nothing and if you have qualifications you get more than someone with none.

    • QKSLVR
      March 14, 2014 - 22:53

      No Joe: I believe in defined contribution pensions. The employer agrees to guarantee a certain contribution each year. The employee takes the responsibility and risk when it comes to managing it and making it grow to enough to fund their pension. . The employer's responsibility ends with the contribution. All employees assume the risk, and the taxpayer is off the hook for the responsibility. In the real world, this is now what's fair

  • saelcove
    March 14, 2014 - 09:54

    How many teachers work to 65 thanks to their gold plated pension mostly paid by the taxpayer

    • Darrell
      March 14, 2014 - 12:21

      With the way you spelled "saelcove" instead of Seal Cove, you probably quit school before our highly skilled teachers had a chance to teach you how to spell.

  • Keith
    March 14, 2014 - 09:31

    The major issue concerning Public employee Defined Benefit Pension Plans (Teachers, Public service etc;) is what happens if the markets go sour as they inevitably do. When this occurs, Government (taxpayers) will continue to pay the cost, in a sense guaranteeing the payments. This is unlike Defined Contribution plans where if the market stumbles, the Pensioner suffers a reduced payment. At the very least, employees who enjoy Defined Benefit plans should contribute a larger amount to recognize this guarantee.

    • Joe
      March 14, 2014 - 10:27

      Why don't we apply this to MHA's.

  • VOR
    March 14, 2014 - 09:22

    Many errors here. Firstly, no provincial employee can collect a pension any earlier than age 55, and these days, that would most likely be a reduced pension. Secondly, teachers' pensions ARE harmonised and reduced when CPP starts. Thirdly, teachers cannot 'buy back' university time anymore. Back in the day when the province was desperate for qualified teachers this was used as an incentive for training, but no more. Fourthly, some highly educated and long-term teachers may get a $80,000 salary but the average is far below that. Fifth, teachers pay much higher pension premiums than federal civil servants and most other provincial civil servants. I know some teachers and have a very hectic and stressful job, and their benefits are less than those of other provinces. Of course we could follow the American public school education model and reward teachers much less, but do our children deserve the cheapest education possible?

  • Joe
    March 14, 2014 - 09:03

    Why blame teachers? What about RNC, Nurses, Deputy Ministers??? I think the NL government should create a NPP (Newfoundland Pension Plan) for people without defined benefit pensions. Oh wait Dunder-fail spent all of our money on Muskrat Falls and now we are broke.

  • Interested Party
    March 14, 2014 - 04:50

    It is true that teachers had a much better pension plan than most other public servants. Their retirement was after 30 years, and their pension was not reduced at age 65 by the amount of their CPP pension like all other public servants. Also, they could buy pension time for their university years for next to nothing and retire even earlier. No other public servants had these provisions in their pension plan. Even though they now have the same provisions as others, the cost of the previous privileges will continue many years into the future because the changes to match other plans were grandfathered in, and only applied to future years. It is very difficult to take away previously promised benefits. For this reason, the government should hold a stronger hand when negotiating so there is something available for the people who worked the longest and paid the most into their pension plan.