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Dan Kelly, seen here at his Toronto, Ontario offices Tuesday March 5, 2013, is the president and CEO of the Canadian Federation of Independent Business . (Tim Fraser For The Globe and Mail)
Dan Kelly, seen here at his Toronto, Ontario offices Tuesday March 5, 2013, is the president and CEO of the Canadian Federation of Independent Business . (Tim Fraser For The Globe and Mail)

Taxpayers spend $2-billion yearly to help federal workers retire early: CFIB Add to ...

Canadian tax payers spend $2-billion a year to help federal workers retire early, says the Canadian Federation of Independent Business.

That’s because many public sector workers that retire early are eligible to collect a “bridge benefit” – a temporary top up of their benefits that remains in place until they are eligible to collect the full Canada Pension Plan.

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“I think people know that public sector pensions are generous to begin with, and I think that it’s increasingly an irritant for many Canadians, but I don’t think the average person has any idea that a civil servant gets the equivalent of more CPP than they do,” said Dan Kelly, the president and CEO of the CIFB .

“Every time we think we’ve peeled the onion and know all the layers of benefits that civil servants get relative to those of us in the private sector we discover additional layers, and this is one that I think is just shocking,” said Mr. Kelly.

Ottawa recently made some changes to the federal pension plan that included raising the minimum age of retirement for public sector workers.

Before those amendments were put in place it was possible for civil servants to retire before they turned 65, and many did.

A report by the CFIB found that between 2001 and 2011, 81 per cent of federal workers took early retirement. In stark contrast, only 60 per cent of private sector workers and 49 per cent of self-employed workers retired early.

That disparity is not only incredibly unfair, it’s also incredibly costly to taxpayers, said Mr. Kelly.

There were more than 55,000 pensioners at the federal level who received an average “bridge benefit” of about $7,000, said the CIFB report. In 2011 that added up to $385-million. Added together with pension costs and there was $2-billion spent on federal public sector early retirees that year.

And those numbers don’t include provincial civil servants.

Many provincial workers– with the exception of those in Alberta, Saskatchewan and Manitoba – also get a “bridge benefit” for early retirement.

With retirees living longer than ever and unfunded public sector pension liabilities estimated by the CFIB to be at least $300-billion, governments needs to start dealing with this issue sooner rather than later, said Mr. Kelly.

“These things are possible and ending the bridge benefit would be an awfully good start to addressing some of the unfairness,” he said.

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