Peter Thachuk just turned 60 and is a career Ontario civil servant who wants to retire. But an old edict by the Mike Harris government is thwarting his plans.
Mr. Thachuk, a provincial assessor for 33 years, was forced to leave his defined-benefit pension and start over in a different one in 1998 when Mr. Harris's Progressive Conservative government moved the assessment branch of the Ministry of Finance to municipal control. Being in two different pension plans means his retirement benefits will be more than $10,000 a year less than they would be if he had been able to stay with the provincial one. Liberal Premier Kathleen Wynne's government introduced changes in Januray, 2014, that will allow him (and others in the same situation) to merge the two pension plans to fix the problem, but he would have to make a lump-sum payment into the plan of $173,000 to make up the difference in his payout.
A centrepiece policy for Ms. Wynne's government is a made-in-Ontario pension plan for private-sector employees who do not have workplace plans. But Mr. Thachuk and others say the unsatisfactory changes meant to address the split-pension issue leave them wondering whether the Liberals can be trusted to handle the new pension plan properly.
Mr. Thachuk, whose $120,000-annual salary is published on the so-called Sunshine List, understands that he is hardly a sympathetic character in the fight to help Ontarians who are without retirement savings.
But, he argues, this is an issue of fairness: "This is not about civil servants and gold-plated pensions. We are the cautionary tale. If it happened to us, it can happen to you."
An estimated 10,000 civil servants have split pensions, which both Progressive Conservative and Liberal provincial governments have attempted to fix. There is some sympathy for the civil servants in the Wynne government, but officials believe the changes made last year are the best that could be done.
"We appreciate that there are many individuals with split pensions, both in the public and private sector," Kelsey Ingram, a spokeswoman for Finance Minister Charles Sousa, wrote in an e-mail. "These amendments will help reduce these situations in the future."
But this does not help Mr. Thachuk.
"Somebody played politics with our pensions," he says, noting that neither his job, salary or pension payments changed during the downloading. "It was Mike Harris's Common Sense revolution that caused the problem, but the Liberals have known about this for many years – so, shame on Mike Harris and shame on the Liberals for not fixing it."
Mr. Thachuk appeared before a legislative committee this week on the first day of its hearings into the government's bill to establish the Ontario Retirement Pension Plan. "In order to regain trust for this government, I and many others look to this committee to rectify past behaviour with present solutions to the 'split pension issue,'" he told the committee members.
Ms. Wynne – neither she nor her colleagues have pensions after former Premier Harris got rid of them in 1996 – wants the new pension plan implemented by January, 2017.
Four pension plans are involved in the split pension issue for civil servants – Healthcare of Ontario Pension Plan (HOOPP), Ontario Pension Board, OPSEU Pension Trust and the Ontario Municipal Employees Retirement System (OMERS). Each plan operates slightly differently.
"I don't think anybody really anticipated what was going to come out of all of this," says Michael DeVillaer, 62, who has worked in the mental health field for 37 years. He had to start over in another pension plan in 1998 when his organization was merged into the Centre for Addiction and Mental Health.
He faces a shortfall of $21,000 in annual retirement benefits because his pension is divided between two plans – for 21 years, he contributed to the Ontario Pension Board and for more than 14 years he has contributed to HOOPP. To rectify the shortfall, HOOPP has calculated he would have to make a onetime payment of $302,000.
Mr. DeVillaer says the figure is based on an "actuarial calculation. But we all have serious misgivings about the basis for the calculations," he says.
Joe Vecsi, a spokesman for HOOPP, says that privacy regulations restrict them from discussing the number of contributors caught up in the split-pension issue. Other questions he referred to the Ministry of Finance.
"Everybody agrees what was done was wrong but nobody wants to admit liability for it," says Mr. Thachuk.
The benefits are calculated based on the best five years of service. Had he been allowed to stay with his original plan, his benefit would be calculated on the later years when he was earning more money.
"They [Mr. Thachuk and Mr. DeVillaer] are the classic fall-through-the-cracks. People aren't supposed to have that happen to them," says Julia Munro, Progressive Conservative MPP and opposition pension critic.
The divestments happened under the Harris government, but Ms. Munro says it's now "incumbent" on the Liberal government to fix it.