Public Employees Retire at 55 with Nearly Full-salary Pensions and Heathcare Benefits
Civil servants, gather your pensions and gird for the War of 2014
I now realize I was just being young and impractical.
Friends and relatives who went to work for the federal government are among the happiest people I know:
- They’ve had fulfilling, iron-clad jobs with lots of opportunity for advancement. (In Ottawese, they’ve moved from AS-3 to AS-8.)
- Most retired in their 50s or plan to.
- Some travel the world, start second careers or pad their pension income as government consultants or contract workers.
So, why does Tony Clement want to ruin a good thing? The Treasury Board President, the minister who negotiates Ottawa’s labour contracts, is gearing up for a colossal confrontation with government unions.
The Harper government’s omnibus budget bill contains unprecedented measures that will tilt the collective bargaining process in Mr. Clement’s favour as he seeks to rollback perks (such as bankable sick days) and implement performance evaluations to ditch the deadwood.
And that’s just the beginning. At this month’s Conservative convention in Calgary, Mr. Clement was the most enthusiastic supporter of a resolution to bring public-sector compensation in line with private-sector remuneration.
“For too long, there has been a major gap in wages and benefits between the public and private sector,” he insisted. “This is not sustainable, it’s not right, it’s not conservative and it’s not in the public interest.”Such talk resonates with ordinary Canadians who can’t dream of pay and pensions on par with those of the workers who technically “serve” them. No matter that it will be harder for Mr. Clement to plead poverty given Finance Minister Jim Flaherty’s projection this week of a $25-billion federal budget surplus between 2015 and 2019. Or that, after cutting almost 20,000 jobs from the public service since 2010, many departments are grappling with staff shortages and higher workloads.
Overall, the federal public service is up by about 25,000 jobs since Stephen Harper took power in 2006. But in a telling reminder of Mr. Harper’s idea of the role of government, the expansion is entirely the result of massive hiring at the Canadian Border Services Agency, the Correctional Service of Canada, the RCMP and other law enforcement and spy agencies. The Conservative police state is thriving.
Former Privy Council clerk Mel Cappe recently warned that the federal public service is in “secular decline” because the Conservatives have no use for bright minds brimming with policy ideas.
“Ideology doesn’t need analysis,” he told the Ottawa Citizen last month, “and if you have the answers, you don’t need questions.”There probably isn’t much sympathy for that view among average Canadians.
Most see civil servants as spoiled children who have had it too good,
for too long. Last year, some wore “Stephen Harper Hates Me” buttons to
work, a stunt that struck many hard-working Canadians as unprofessional,
if not infantile.Besides, without a top-to-bottom overhaul of public-sector pensions, taxpayers are already on the hook for a $148-billion unfunded liability. That’s the official amount; the C.D. Howe Institute figures the true sum is $118-billion more because Ottawa has overstated future returns on pension investments.
Another resolution at the Conservative convention called for the government to switch its employees over to defined-contribution pension plans. Mr. Clement hasn’t gone that far yet, but he will have the entire Conservative base and much of the Canadian public onside as he pushes for big concessions in upcoming contract talks.
Canadians who have seen their pensions eroded, if they’re lucky enough to have them at all, are in no mood to grandfather the entitlements of civil servants who contributed comparatively little to their own retirement funds only to retire at 55 with nearly full-salary pensions. It’s not enough to raise the retirement age and contribution rate for new hires. Current federal employees and retirees may face benefit cuts, too.
Get ready for the War of 2014 and the Battle of Tunney’s Pasture.
Military Retirees May Lose Double Dip Retirement
James Joyner, Outside the Beltway - The Pentagon is considering making military retirees ineligible for civil service pensions.
Federal Times (“An End To Civilian Pensions For Military Retirees?“):
To address long-term sequester cuts, the Defense Department is mulling numerous reductions that will affect civilian employees, including doing away with civilian employee pensions for military retirees who go back to work for the government as civilian employees.
The savings could be almost $100 billion over 10 years when combined with a halt to commissary subsidies and restrictions on the availability of unemployment benefits, Defense Secretary Chuck Hagel told reporters last week in summarizing the recommendations of the newly completed “Strategic Choices and Management Review.”
[...]
As of March, more than 134,000 military retirees held civilian jobs at DoD, according to the Office of Personnel Management. For the Pentagon, axing civilian pensions would save money by reducing the amount it has to contribute into the Federal Employees Retirement System and the Civil Service Retirement System, said Larry Korb, who oversaw manpower issues as an assistant Defense secretary during the Reagan administration.
While Korb does not take the idea seriously, he sees it as an attempt by DoD to draw attention to a pension program that often lets soldiers, sailors and airmen retire from the military after 20 years, then return to DoD as civilian employees making more money for doing the same job.
Hagel did not say how aggressively DoD would seek to implement such a step or how much it could save. A Pentagon spokesman later declined to provide additional detail.
But the head of the National Active and Retired Federal Employees Association (NARFE) blasted the idea as “ill-conceived and completely unfair.”
“No civilian employee should receive lower total compensation because they served in the military, ever,” NARFE President Joseph Beaudoin said in a statement. “This proposal should be rejected completely as an option, even under the worst budget scenarios.”Once upon a time, military officers who retired at pay grade O-4 and above (major/lieutenant commander) were ineligible to be hired into the civil service unless they waived their pensions. We got rid of that restriction because it was not only unfair (essentially penalizing people for two decades of service) but stupid (depriving the government of proven, experienced leaders).
Regardless, there has always been a tension between military retirees and others in the civil service.
My dad was a retired senior NCO and thus not subject to the restriction but always felt like he was discriminated against. At least in those days (circa 1986) retirees were not eligible for the 5 point hiring preference given to ordinary veterans (such as myself) or the 10 point preference given to disabled veterans (such as him). Additionally, whereas military service time counted towards one’s time in government services for retirement, vacation, and other benefits if you were an ordinary veteran, it didn’t if you were drawing a retirement pension.
On the civilian side, though, the civil servants who had little or no military background resented former military coming in well into the grade structure and often having outsized influence because of their military experience and/or network. Additionally, there was an extra dose of resentment reserved for those drawing a generous military pension in addition to their civilian salary, especially from civil servants who had just as much service time.
Ultimately, though, the “double dip” argument was always silly. That one can put in twenty years of service in the military and retire with a nice pension is hardly a state secret. Nor is it particularly onerous to qualify to enter into that path, especially if you’re healthy. Nor is it obvious why it’s problematic for someone who is going to get a pension regardless of whether or where he works after “retirement” to be allowed to compete for vacancies in the civil service. Yes, they’re getting two paychecks from the government. But they’re going to get one regardless and only get the second because they’ve taken a second job.
There is, of course, the issue of cronyism. When a retiring colonel winds up being selected as the “best available candidate” for a civil service position that just so happens to have a job description which exactly matches his last active duty position, there’s a natural suspicion that the fix is in. But there are ways to minimize this problem–and it’s really tangential to cost savings.
The bottom line, though, is that there’s no legitimate argument to be had for denying a second pension to someone who legitimately earns his first pension in uniform and then legitimately earns a second one after twenty or twenty five more years of service in civvies. That’s especially true since, nowadays, the civil service retirement system amounts to a 401k rather than a military-style pension.
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