House of Commons CANADA Standing Committee on the Status of Women FEWO Ï NUMBER 044 Ï 2nd SESSION Ï 40th PARLIAMENT EVIDENCE Tuesday, December 1, 2009 Chair The Honourable Hedy Fry 1 Standing Committee on the Status of Women Tuesday, December 1, 2009 Ï (1540) A survey of Public Service Alliance of Canada members working [English] full-time for the federal government and its agencies was conducted across Canada in 2006 by Environics Research Group. According to The Vice-Chair (Ms. Irene Mathyssen (London—Fanshawe, the results, approximately 25% of the establishment reported that NDP)): I call the meeting to order. they intended to retire within the next five years. This survey showed I'd like to welcome Ms. Ducharme and Ms. Marquis from the that a new profile of public service workers was also emerging. Public Service Alliance of Canada. Women represented 57% of PSAC members between the ages of 36 and 45, as well as 57% of members having 16 or fewer years of Unfortunately, the witness who was coming to present for the service. The younger members are the most likely to hold a Canadian Office and Professional Employees Union is unwell. We university degree. have that brief. It's important to keep certain demographics in mind when thinking I'd invite our guests to please present. You have ten minutes each, about pension security for both those retiring and those just coming and then we'll go into a round of questions. into the federal public service. Given the workforce shortage, it will Ms. Patty Ducharme (National Executive Vice-President, be crucial for the federal public service as an employer to consider Executive Office, Public Service Alliance of Canada): Thank how it will attract and retain competent new workers. you, Chair. The PSPP is a defined benefit pension plan governed by the I'd like to begin by stating that the Public Service Alliance of Public Service Superannuation Act, the PSSA. Participants in the Canada stands strongly behind the Canadian Labour Congress's PSPP are either contributors, retirees, surviving spouses, or children campaign for retirement security for everyone. This campaign calls of retirees. As of March 31, 2008, women represented 55% of active for increased CPP benefits and public pensions for poor seniors and contributors to the plan. This is the highest rate in history. The for a system of pension insurance. These demands will help women calculation of retirement benefits is based on the number of in particular to increase their pension security and get the dignified pensionable years of service and the average salary earned during treatment they deserve. We agree that increased benefits will ensure the five consecutive highest-paid years. Consequently, the greater the that no retiree, current or future, gets left behind. number of pensionable years of service and the greater the salary earned during the five best-paid years, the larger the retirement For federal public service workers, however, the Public Service benefit. The plan calls for an income replacement of up to 70%. Pension Plan, or PSPP, is known as one of the three pillars of the Canadian retirement income system. The first of the other two pillars As of March 31, 2008, the annual average retirement benefit paid are the Canada and the Quebec Pension Plans, CPP and QPP, and the to women retired from the federal public service was $17,061, which other pillar is Old Age Security, or OAS. It is also recognized that it is 62.7% of the annual average amount paid to their retired male is a combination of the three that ensures adequate income in counterparts. In comparison, the annual average retirement benefit retirement. Our brief today focuses on the Public Service Pension paid to women as of March 31, 1998, represented only 52.9% of the Plan. average amount paid to retired men. You can see that there is In the best-case scenario, the PSPP ensures that the total progress in closing the gap between the benefits received by male retirement income paid to a federal public service worker from and female employees. these three sources represents 70% of the average salary he or she earned during the last five years prior to retirement. While we will go The progress is more noticeable when considering only the new, into detail in our written brief, our presentation will provide unreduced retirement benefit, which becomes payable during the highlights on socio-demographic data on the members of the PSAC, most recent years. review the main characteristics of the Public Service Pension Plan, and describe how the pension income of the federal public service Unreduced retirement benefits that became payable during a constitutes deferred wages. specific year include only immediate annuities payable to federal public service workers who retire from the public service at age 60 Our members make up the overwhelming majority of program years or more, as well as immediate annuities payable to those who administrators and front-line service providers for the Canadian retire between 55 and 59 years of age after they have accrued a public. About 64% of our members are women. minimum of 30 years of pensionable time. 2 FEWO-44 December 1, 2009 For the second year in a row, the annual average amount of I'm sure you all know, PSAC and 12 other plaintiffs are currently unreduced retirement benefits that became payable to women in the suing the federal government in an attempt to recover this money. year ending March 31, 2008, represented 97.7% of the average Ï (1545) annual amount of unreduced retirement benefits that became payable to men at the same year. Unfortunately, we do not have access to the According to a Statistics Canada study published in November data for the percentage of women workers who have access to an 2007, the percentage of women who have a certified pension plan unreduced pension. has been increasing steadily over the past 30 years. Better-educated women are looking for organizations that provide security through a Since 1970, pension benefits have been fully indexed to the rate of good pension plan. increase of the consumer price index. The PSPP is a defined benefit pension plan to which contributions are also mandatory. The The pension fund covered by the Public Service Superannuation contribution rates and the retirement terms are coordinated with Act is a perfect example of a pension plan that enables women to the CPP and the QPP. Retirees who collect benefits from the PSPP retire from the labour force while still maintaining a decent standard see their benefits payable under the PSSA reduced at age 65, or as of living thanks to the deferred salary they have accumulated soon as they collect CPP or QPP benefits, or CPP or QPP disability throughout their working lives as federal public service workers. benefits. The federal government also benefits as the employer, because it There are a few other important aspects of the plan I'd like to can recruit a competent workforce more easily and retain them mention. The legislation also contains a certain number of significant longer. provisions for women as contributors to the plan or as the spouse of a contributor—for example, the possibility of accumulating, subject Canadian taxpayers also come out ahead when the retirees, with to certain conditions, pensionable service during leave without pay their households, are receiving sufficient incomes to be able to for family obligations, maternity or parental leave, or for the contribute to the community and the economy, and potentially the relocation of a spouse; part-time employees can contribute to the retirees are prevented from qualifying for the guaranteed income plan provided their assigned work week is equal to or greater than 12 supplement. hours; benefits are paid to surviving spouses; and retirements benefits are shared in the event of a divorce as per the Pension The message cannot be any clearer: our members have been Benefits Division Act. These aspects of the plan have resulted in contributing to a pension plan that has ensured that women can retire enabling women to retire with some security and still contribute to with security and dignity. This plan has reduced the chances that the community and the economy. women in the federal public service will retire poor, unlike too many Canadian women who must depend solely on the Canada Pension Obviously, labour disputes resulting in strikes also have an impact Plan, or Quebec Pension Plan, and the OAS. on one's ability to retire. For example, our members who work at the Museum of Civilization and the War Museum, a bargaining unit that As you know, Annette Marquis has joined me. She is one of the is definitely female-dominated, has been on strike for 72 days. For disability and pension officers at the PSAC. Although I didn't say it those workers who are not term employees, every day on strike is at the beginning, we pooled the presentation time so that we would one day longer until retirement. be available for questions. It will come as no surprise to anyone that we stress the fact that the Ï (1550) pension benefits paid to federal public service workers are deferred The Vice-Chair (Ms. Irene Mathyssen): Thank you. I appreciate wages. All contributions paid into the PSPP constitute a portion of that very much. our members' overall compensation. A significant portion of the salary of a federal public service worker contributing to the PSPP is We'll begin with Madam Zarac, for seven minutes. paid in the form of contributions required under the CPP or QPP and [Translation] the Public Service Superannuation Act.