Fat city - Macleans.ca
 

Fat city

The civil service hasn’t suffered in this recession. Is it about to share our pain?


 

If you want to know how hard times are hitting government workers, there’s a group of frank, friendly, tuned-in guys you could call up: Ottawa luxury car dealers. What’s it like selling cars in a city dominated by federal employees during a recession?

“There has been no recession,” says Paul Giacomin, owner of the capital’s 417 Infiniti Nissan dealership, as far as his bottom line is concerned; he calls Ottawa a “strong city.” “Business is up for us. Very up. In fact, it’s up about 30 per cent from 2008,” testifies sales manager Paul Renaud of Audi-Porsche dealership Mark Motors West. “This year has been great,” reports Neil Donnelly, new-car sales manager at Tony Graham Lexus. “We’re having a record year. By far. I made three different forecasts at the start of the year: a totally optimistic forecast, a semi-optimistic one, and a flatline, which would have been fine, since we also set records in ’08. We’ve blown through the most optimistic one.”

Not everybody is so ebullient; some Ottawa dealers in what the Europeans call the “executive car” class confess to merely matching or approaching 2008 numbers. But mostly the showrooms are busy, and it’s no secret why. “Ottawa’s a little isolated,” admits Renaud; when there’s a short-term economic shock, “you know government workers are gonna keep getting paid.” “We didn’t have that good a year, but definitely, being in a government town helped a lot,” says Bel Air Lexus Toyota sales manager Marc Durocher. Infiniti’s Giacomin attests that dealers in government-dominated Quebec City are doing almost as well as he is; others aren’t. “Rightly or wrongly, this city hasn’t managed to attract private sector jobs, and as a result we’ve been very much shielded from the impacts that might have happened elsewhere.” Donnelly echoes him, right down to the adjective: “I would say we’re definitely shielded.”

It’s not new for people to use bubble, or shield, or island metaphors in talking about government towns like Ottawa. But these days, the nation’s capital feels like the town the recession forgot. Unemployment stands at just 5.6 per cent, well off the national rate of 8.6 per cent. The Teranet-National Bank house price index grew in Ottawa by a healthy 2.8 per cent in the 12 months leading up to August; for the country as a whole, it was down 3.4 per cent. Indeed, Ottawa stands better than average in almost all the categories of the RBC Economics “City Scorecard.” Even measures that have declined are healthier: non-residential building permits may be down 22 per cent from last year in Ottawa, but that’s still better than the national number of minus 26 per cent.

Rarely in recent Canadian history has the sense of separation between the public and private sectors been felt so keenly, and not just in Ottawa. On Nov. 4, Ontario Premier Dalton McGuinty admitted that public sector workers had been “sheltered” from economic chaos, saying that, “By and large it’s been a private sector recession, not a public sector recession.” He even mused about repeating the despised “Rae Days” exercise of 1993, when civil service and government employees were forced to take 12 days of unpaid leave.

Whether or not “Dalton Days” are ahead, the numbers confirm his take on the “sheltered” public labour force. Statistics Canada says that over the 12-month period between October 2008 and October 2009, Canada lost almost half a million jobs. Nearly 450,000 of these were in the private sector, where employment was off a full four per cent for the year. The figure for the public sector was just 1.6 per cent, and more than half of that drop-off was recorded in the last month of the sequence. For most of the past year, the public sector was fighting the recession to a draw; indeed, despite the slight net job loss, public sector employment has risen in more months than it has fallen.

And it’s not just job security, but wages as well. Another barometer of relative economic health in the public and private camps is the federal Labour Department’s tracking of major collective bargaining settlements. For the third quarter of 2009, annualized wage increases in the public sector resulting from new union deals outpaced those in the private sector by 2.1 per cent to 1.5 per cent. For all of 2009 so far, the public sector is ahead 2.5 per cent to 1.9 per cent. Those may not look like big differences, but don’t forget the power of compound interest. Over a three-year collective bargaining agreement, a 0.6 per cent yearly advantage translates to almost two full percentage points.
Economists reassure us that such disparities tend to even out over the long run, or else the queues for public sector jobs would get longer and longer without limit.

Nonetheless, the recession has arrived at the end of what was already a pretty good run for the public side. Between 2004 and 2008, across Canada, employment in public administration jobs grew faster (2.9 per cent per year) than employment in the economy as a whole (2.2 per cent). Annual growth was also faster in public sector employee earnings (3.9 per cent versus 3.4 per cent). Both federal and provincial employees came out well ahead of Joe Private on both measures, and the data on union wage settlements confirms the story: public sector workers gained more at the bargaining table not only in 2009, but also in 2008, 2007, and 2006.

Even before the world’s economy imploded, workers who chose to take their chances in the world of private business or industry had good reasons for feeling like suckers. What other reaction could they have to reading in the news that MPs’ travel and office expenses were up 3.7 per cent in fiscal 2008-09? Or that the number of federal government executives at the EX-5 pay grade, with annual salary and bonuses averaging about $214,000, has grown from 14 to 69 in three years?

Last December the Canadian Federation of Independent Business released its post-census “Wage Watch” report. Its key finding was that government and public workers earn, on average, “roughly eight per cent to 17 per cent more than similarly employed individuals in the private sector.” When benefits are taken into account, the overall public edge swells to 30 per cent. An entire cottage industry has risen up to attack the “Wage Watch” report on behalf of unionized public sector workers. The attacks from labour economists tend to take the form—“We’re not really paid more, but if we are, we’re worth it; and even if we aren’t worth it according to your inhumane market-based calculations, it’s important to preserve things like male-female pay equity and set a proper example of decency for the private economy.”

One way or another, though, there is broad agreement that the public-private “pay gap” is real, and it is recognized even in the less polemical scholarly literature on economics. Repeated studies over decades have confirmed that public sector employees, especially federal employees and women, get paid more than their private counterparts for similar work, though at the high end of the income scale (i.e., for top executives and very highly trained workers) the “pay gap” becomes negative. As recently as September, a multi-country study from New Zealand estimated the size of Canada’s pay gap at 30 per cent.

So when private sector workers peer into the public sector bubble, what they see is greater job security, permanently higher pay for all but the most elite workers, and airtight insulation from economic shocks. The public sector itself may even be subjectively aware of faring better. In Harris-Decima’s Labour Day poll for Monster.ca, 53 per cent of public sector workers described themselves as feeling more secure in their jobs than they did one year ago, compared with 42 per cent of private sector workers. A remarkable 39 per cent of the public sector answered “yes” when asked if they were overpaid compared to employees in the private sector.

Perched atop these layers of putative injustice is the ugliest gargoyle of all: the question of non-wage benefits. Public sector employees generally enjoy better sick leave and maternity leave provisions, and the rock-steady pensions of old are disappearing for private sector workers while the public sector clings to them. As Canada Pension Plan Investment Board CEO David Denison observed in a September speech, “Defined-benefit plans have traditionally been the preferred choice for providing retirement income for middle- and upper-income Canadians, but . . .  fundamentally, defined-benefit plans promising 100 per cent guarantees have simply become too expensive for plan sponsors to underwrite.” When it comes to the public sector, the ultimate “plan sponsor” is the taxpayer, but so far, nobody has decided that gold-plated pensions for public administrators, elected officials, teachers, and health care workers are too expensive for him to underwrite.

So is it time to start contemplating a bloody uprising against the spongers? One must admit that this is the worst possible moment to contrast the welfare of public and private workers. Doing so is “a complex thing,” says University of British Columbia economist Kevin Milligan, because private sector earnings vary more widely. Workers in private business enjoy higher highs as well as lower lows; any study taken even over a period of a few years can fail to capture the true picture.

“If you looked at Alberta in 2006 or 2007,” he observes, “you might have found civil servants jealous at how fast paycheques were rising in the oil patch while they were watching their salaries tick upward at the same old two per cent a year.” But he adds that one would expect workers subject to extra income volatility to receive higher average incomes for the same work, in order to compensate them for being exposed to the business cycle. Instead, according to the pay-gap research, it’s the protected public sector workers who make more on average—significantly more, when pensions and benefits are factored in.

Morley Gunderson, holder of the CIBC Chair in Youth Employment at the University of Toronto, says when the public-private pay gap was a major research preoccupation of his, some decades ago, he was known to advise “benign neglect” as the most acceptable means of addressing it. Senior administrators and highly educated professionals on the public side are earning less than they could in the market, not more; the beneficiaries of the pay gap are women and less-skilled workers, and maybe, Gunderson suggests, we can let them have a modest unearned economic rent.

“But,” he adds, “inevitably [in tough times] taxpayers are going to ask why they’re supporting workers earning above-market compensation, and we’ll get a cycle of political pressure and reaction.” Indeed, the first signs of that reaction may already be appearing, with a two-year public sector wage freeze underway in New Brunswick, rumours of a freeze in Alberta, and the Ontario government’s Nov. 6 launch of a wide-ranging expenditure review by a Treasury Board panel.

Jock Finlayson, executive vice-president of policy for the Business Council of British Columbia, laments missed opportunities to rein in spending before the crisis arrived. “I don’t see how one can justify the public-private disparity along the dimensions of job security and pensions and benefits,” he says. “But the ultimate question is, do you have the tax base? Alberta has very expensive government, but depending on the outlook for oil, Alberta may be able to afford it. It’s less easy to explain why Ontario boosted spending when it faced an inevitable downturn and an industrial restructuring. There’s a danger during good economic times of building services, programs, and institutions that can only be financed at the peak of the business cycle.”

As most economists acknowledge, there’s a hypothetical quasi-Keynesian rationale for protecting public sector workers at the outset of a recession. Unlike most U.S. states, Canadian provinces have the constitutional power to run deficits. This means our governments can act counter-cyclically, waiting until the private sector is strong enough to absorb laid-off government workers, instead of pro-cyclically worsening local recessions, as states such as California have had to. But limits on U.S. state debt powers have also given the states incentives for fast-paced innovation. And the Canadian ability to dampen the business cycle doesn’t mean much if you don’t limit growth in government during the good times, as most jurisdictions failed to do.

Tony Dean, former head of the Ontario public service and now a fellow of the University of Toronto’s School of Public Policy and Governance, counters that the Ontario civil service still hasn’t rebounded to its 1995 pre-Common Sense Revolution size. “And the federal government reduced staff by 45,000 between 1994 and 1997,” he adds. Prime ministers Chrétien and Martin “didn’t exactly leave federal public servants feeling that they had safe jobs for life.” Though there may be envy of civil servants, in many ways he thinks they are still doing more with less than in the days before world-changing texts like David Osborne and Ted Gaebler’s Reinventing Government (1993).

“Not long ago,” he notes, “when you had a new baby, you had to go to the town hall to register the birth, apply to the province for a birth certificate, and ask Ottawa for a social insurance number. Three offices, three separate trips. Today, in many places, you can do this all in one step through an online portal.” We tend to take such changes for granted, he says, and forget the savings they have yielded for the treasury—and the clerical workers who don’t have to be hired to shuffle those papers anymore. (Though whether the real workers were laid off when the rationale for their employment disappeared is another question.)

What seems certain is that the pain will ultimately spread to the public sector. How fast and how viciously depends on political will. Infiniti dealer Giacomin is watching the gathering storm, monitoring the political and economic winds with an expert’s eye. “Up until now,” he says, “governments haven’t worried about deficits; they’ve been concerned with the immediate economic emergency. The next phase is coming soon, and when governments begin to adjust their spending, it will probably have harsh impacts on public employment, or on the employees’ purchasing power. That’s going to have an impact on a city like Ottawa. We’ll see what this recession looks like on the way out.”


 

Fat city

  1. Earth to Colby,

    Are you still writing from Edmonton? Perhaps you missed a little thing called the Restraint Act, passed earlier this year, which effectively capped all wage increases in the Federal Public Sector for the next three years.

    Sort of relevant to your treatise, no?

    Anywhoo, here in fat city, (where my salary has not increased for the last seven years), everyone knows that another contraction is well underway.

    Notwithstanding that, most civil servants I know are extremely grateful for their jobs and their pay, but are also motivated by a sense of duty to the public, believe it or not. And they even understand that restraint measures are sometimes necessary, even in the context of a Wall-street generated financial crisis.

    • "Notwithstanding that, most civil servants I know are extremely grateful for their jobs and their pay, but are also motivated by a sense of duty to the public, believe it or not. And they even understand that restraint measures are sometimes necessary, even in the context of a Wall-street generated financial crisis."

      Given that public sector employees have noble motives, shouldn't their pay reflect this? Isn't is right, morally speaking, to pay them the same as the non-profit sector? That's how things used to be in Canada prior to the Pearson-Trudeau junta.

      And the crisis was generated by Freddie Mac and Fannie Mae, U.S. government controlled lenders.

  2. It's a fundamental law that the civil service never gets smaller. Just think of all the extra bureaucrats needed to monitor all the bailouts. And then all the extra bureaucrats needed to monitor those extra bureaucrats. It never ends — the civil service is like a plague of leeches. Perhaps 10% of them actually perform a service to voters; the rest are just supervisory, managerial and consulting leeches.

    • So, 90% of the public service doesn't provide a service? That is pretty amazing; I am 67% sure that you made that up, but didn't you know that over 70% of statistics are 85% likely to be 57% manipulated or made up by 100% pure unleaded simpletons like yourself? Well, my break is 93% over, so I'm going to get back to my cushy public sector job.

      • And I"m 99% sure you won't do much for the rest of the day. I've been a civil servant before. Some days we worked very hard. Many days, too many days, we didn't do anything.

    • So, 90% of the public service doesn't provide a service? That is pretty amazing; I am 67% sure that you made that up, but didn't you know that over 70% of statistics are 85% likely to be 57% manipulated or made up by 100% pure unleaded simpletons like yourself? Well, my break is 93% over, so I'm going to get back to my cushy public sector job.

    • SteveWB's First Law of Bureaucracy: Civil servants are a form of entropy.

      I like it.

  3. Also, civil service pay often tends to be lower overall than private sector pay, so even if there were overall civil service pay increases, the taxpayer's usually still pick up their workers at a relative bargain.

    • The article already suggested that this is false in all but the highest levels of government: public sector workers are paid 8-17% higher than private sector workers with similar positions before benefits are counted. Including benefits, the disparity rose to 30%.

  4. Riiiight.

    Well, Colby's found his audience.

    • Maggie, Ottawa is scrambling to find office space for it's burgeoning workforce right now. That wouldn't be happening if the civil service weren't growing. It's growing, and that growth needs to be reversed. Not just curtailed, but reversed.

  5. The unions put McGuinty into power, and in effect they have him by the short and curlies.

    • Dude, this post is about Ottawa.

  6. Job security, benefits, pensions obviously not counting for anything, eh?

    • The various workers in the public sector who got axed during the Harris years, and/or got their pay cut in the form of Rae days might beg to differ with you on the job security front. The benefits are good, but some are arrived at by either taking a reduced pay increase, or by foregoing a pay increase altogether at contract negotiation time. As other folks have mentioned, we pay between 7-10% of our pay into our pension plan, on top of our CPP contributions, so declaring them a gold-plated privilege is quite the oversimplification. To wit, I am not disagreeing entirely with the Harris cuts, as the Ontario Public Service did need to be scaled back – I am merely asserting that "job security" is not the guarantee in the public sector that you imagine. Try also breaking into and staying in the teaching profession in Ontario during the first years of professional development. Hardly a walk in the park. I am also an Ontario Public Servant, and also agree that "Rae Days" are needed during times of restraint.

      • straittohell
        Wrong. Your pension cost somewhere around 17% of salary. Your pension is part of your pay package, Your employer has opted to pay you partly in cash, partly in pension. You have no choice. The actuarial cost of your pension is what was taken from your total pay package pay, not 7 to 10%. In the 1980s the federal public service pension actuarial cost was 16.2% of salary. We military 25.02% of salary. Probably those costs have gone up. The employer pays for your total pay package. You get that pay partly in cash, partly in your pension. And it is not want you expect but that is another story.

  7. The pay and benefits may indeed be better, as well as the job security. But at the end of the day the problem with being a civil servant is that you have live with the fact that you're a civil servant.

    • Its worse if you're French, then you're a fonctionairre.

    • So to criticize a growing civil service (during a recession no less) is just right wing polemics?

      • What does "during a recession no less" mean? When else would you want to grow the civil service? I know you would say "never," but "during a recession no less" is like saying "Why is the government cutting spending, during a time of deficit no less"

    • Why am I not surprised that while the recession is exclusively hitting the private sector, the TorStar is trying to drum up sympathy for the public sector.

  8. Oh Colby, go back to talking about the Oilers and their ingenious ways of losing. You can compare it to the Sens if you want to make yourself welcome in your new home. Anyway, to your terrible, misguided to borderline imcompotent points: 1. Yes, there is less lay offs in the public sector at this moment in time compared to private sector layoffs. However, you fail to mention that public sector revenues are generated by taxes. Those taxes were collected in the past. What happened in 2008? Oh yeah, good things. What has happened in 2009? A severe but short-lived recession. So, what will happen in 2010 for the public service? Hmmm…you're good with spouting numbers, I'm sure you can figure it out. 2. Pensions in the public service are managed differently than say at GM or Ford or Canwest. Public service employees generally (depending on what collective bargaining deal was struck) contribute around 10% of gross income into a pension. How much did GM workers contribute? Something like 2% sounds right. You want to compare benefits? Start with comparing contributions and then we'll talk. 3. Just because you quote Tony Dean for the last couple of paragarphs of your peice don't try and convince yourself you've done fair and balanced journalism. This is a hack job and we both know it.

    Honestly Colby, I expected better researched and better written product.

    • Public service pensions cost the employees much more. See my reply to straittohell

  9. Yes, public service pensions are quite different from those in the private sector. In the public sector when you retire you have a pension. In the private sector when you retire you may find out that pension surpluses have been raided by corprate take over sharks, after management went out the back door with massive bonuses and you are left with nothing. Ask the people at Dominion Grocery stores, Northern Telecom, the list is endless and getting longer. Cheers

  10. My respond to any non-unionized private sector worker who is unsatisfied with their wages is always the same: organize yourselves. If you consistently reject the only action that has been proven to enhance benefits and security in your workplace, you shouldn't complain.

  11. nothing unexpected

  12. There is nothing like watching a group of public servants "work". If a private company was run like a public service it would go bankrupt very quickly.

    Just thinking about the waste of taxpayers money makes me sad.

    • I often wonder if people who write things like this have ever actually worked for a private company. The private sector can be just as – if not more – bureaucratic than the government. Here's a test: Try getting a passport and dealing with Rogers/Bell/Telus/Takeyourpick. Then tell me who's working harder and better and who you'd rather deal with again.

  13. Colby, ____When did you stop beating your wife?

  14. I wonder if it ever occurred to Colby that women and lower skilled workers aren't being overpaid in the public sector, but that they're being underpaid in the private sector?

    Probably not..after all, how does that kind of thinking get us back to the gilded age?

    • If centrally directed wages, not exchange-generated wages, are just, why not centrally-direct all pay? What's the worse that could happen? Right Thwim?

      • Reducto ad Absurdum. Bad argument.

        I pointed out a specific area where wages in the private sector may be unjust – and specifically Mr. Cosh's inability or unwillingness to consider the issue in that light.

        You are attempting to imply that because I think one area of the private sector may be unjust I must therefore think they all are. That's false.

        The reverse argument would be to suggest that you think any restrictions on the private sector should be abolished, up to and including slavery. It would be just as wrong.

      • Reducto ad Absurdum. Bad argument.

        I pointed out a specific area where wages in the private sector may be unjust – and specifically Mr. Cosh's inability or unwillingness to consider the issue in that light.

        You are attempting to imply that because I think one area of the private sector may be unjust I must therefore think they all are. That's false.

        The reverse argument would be to suggest that you think any restrictions on the private sector should be abolished, up to and including slavery. It would be just as wrong.

  15. Colby,

    Why do you hate public servants?

  16. they should get rid of a lot of the federal government and hand it over to the provinces .. health welfare and education are provincial responsibilities

  17. For Christ's sake, Colby Cosh, it's called the Public Service. You're not living in England. If you're going to write a three-page piece about it, learn what it's called.

  18. Great article (full disclosure: I’m in the provincial civil service – it’s my lunch break now). The uproar is always going to come from the private sector and especially the Small Government-estapo screeching about cushy government jobs. But ask yourselves this: would you rather have higher wages and better benefits distributed among all employees or concentrated with a few executives? What’s better for our economy? Thousands of employees being able to spend their money locally (Ontario in my case) or a select few who store their assets somewhere in the Carribean?
    And to respond to Dakota’s comment: Private companies do go bankrupt, and often. We’d be in a whole lot more trouble if somehow the civil service dissolved because it was run into the ground like a private business.

    • Small Government-estapo

      Um, technically the Gestapo were bureaucrats. :)

      • Good point. Does Small Government-AMBLA sound better then?

    • "What's better for our economy? Thousands of employees being able to spend their money locally (Ontario in my case) or a select few who store their assets somewhere in the Carribean?"

      We'd be even better off if the provincial taxpayers who have private sector jobs could keep more of their money and spend it locally. That's why I'd rather pay the executives an extra 100K a year to minimize the number of public service jobs and keep the salaries of the public service in line with the private sector. The savings more than make up for the execs extra salary.

      • I disagree, minimizing the public sector would only degrade the level of service that it provides. In Canada that includes health care, utilities, and infrastructure. All three areas we excel in when compared to the private sector alternatives we see in other countries (I know these are only examples, but they're biggies). I just don't have the same reverence for the rich, or the belief in the efficiency of markets that you appear to have.

  19. Personally, I'd prefer Takeyourpick but the government won't let them into the market because they're controlled by a foreigner.

  20. I am always dumfounded when people complain about high wages and great benefits in the public sector. All those people with high wages go out and spend that money in their communities, its not like it’s disappearing into a black hole and only being shared by people in unions. The public sector plays a large role in buffering (dampening) economic swings that really hurt the private sector. In the private sector you have the potential to make a lot of money, but you run the risk of losing too. Public sector employees more so then any other group help keep the economic engine going during the last year. Over simplification in the interest of an ideological point of view never helps to solve anything. These issues are a lot more nuanced then the article portrayed.

    • "All those people with high wages go out and spend that money in their communities, its not like it's disappearing into a black hole and only being shared by people in unions."

      They complain because if public sector employees got paid market rate taxes would be lower. The higher pay of public sector employees comes directly out of the pocket of taxpayers with private sector jobs. So when you talk about all those public servants spending money locally (they don't if you don't live in a fed/prov capital BTW) being good, couldn't the taxpayer have done that themselves? On stuff they need. The public service isn't supposed to be a charity.

    • "All those people with high wages go out and spend that money in their communities"

      And all the government has to do is give us all $30 million and suddenly the whole country can be rich!

    • Good point J. That's why the McGuinty government's decision to implement a hiring freeze at the onset of the recession was counter productive.

  21. CPP CEO David Denison is quoted as saying: "……defined benefit plans promising 100 percent guarantees have simply become too expensive for plan sponsors to underwrite". Clearly he does not understand defined benefit pensions.

    Regardless of what is meant by 100 percent guarantees, the plan actuary would have calculated the percentage of salary that should go in to an account to pay for those "guarantees". Since the employer has opted to pay part of the total pay package as a pension, then there is no expense there. A pension has been substituted for cash.

    The calculations by the actuaries should result in an even chance of a deficit or surplus resulting from the investment. So there is no net expense there.

    So "too expensive" is not understood. Where is the expense?

    Colby Cosh writes about Defined Benefit Pensions. Surely he knows that “too expensive” is misinformation. He is either incompetent or malicious. In either case Colby Cosh should not be writing about Defined Benefit Pensions.

  22. I find it odd that you claim the man who runs the 15th largest pension fund in the world does not understand how pensions work.

  23. I did not say pensions. I said defined benefit pensions.

  24. I find it odd that you claim the man who runs the 15th largest pension fund in the world — a defined benefit pension plan — does not understand how defined benefit pensions work.

  25. Perhaps I am influenced by rather unusual behaviour by administrators of the Federal Public Service Plan. The 1980 Actuarial Report notes that the cost of the indexed plan was 16.2% of payroll, and that should be deposited in an account to pay the indexed pensions. However legislation required a separate account for indexing and that 2% of payroll should go in to that account. The report commented that with two accounts, one could have a deficit while the other had a surplus. The report stated that the cost of indexing was 4.8% of payroll, and 11.4% for the basic pension. Not surprisingly, a deficit developed in the indexing account – $6 billion according to the Auditor General. The myth "the high cost of indexing" was born. The surplus in the unindexed account was not mentioned by the media, to my knowledge, until unions started squabbling over who owned the surplus. Continued below.

  26. Continued from Art Campbell
    So legislating 2% of payroll to cover an expense of 4.8% of salary is somewhat more unusual than stating "……defined benefit plans promising 100 percent guarantees have simply become too expensive for plan sponsors to underwrite"

    I trust that you understand why I was able to make my statement. Could you help further by answering "Where is the expense?"

  27. DB plans work well when the trustees are determined to perform their
    fiduciary duties on behalf of the plan members rather than the plan sponsors.

    Speaking as a former trustee who is now a retiree.

  28. Yeah. I know. That's why I come to MacLean's. I don't have to put up with that
    stuff here.

  29. If by "that stuff" you mean "ignoring the actual story in favour of an imagined one that furthers their ideology" then I agree with you.

  30. You beat me to it. That is the exact argument to throw back at J's nonsense.

  31. To "J" ….not to forget that VERY nice PENSION …in addition to your other pensions…

    • I don't know where J fits into the work/retiree spectrum, but a federal public service retiree from the 1980s, paid 16.2% of his/her salary for their pension. That is the actuarial cost of public service pensions of that era. That is 16.2% of his salary over which he/she had NO control. We military had no control of 25.02% of our salary. Kinda difficult sleeping if one thinks that 25.02% of salary over 30 years is in the control of politicians. These are the guys that arranged for indexing to look expensive with the result that public servants have been verbally and financially abused and private sector workers have been denied indexing. These are not nice guys, just powerful guys.

  32. To paraphrase YYZ, why would "the man who runs the 15th largest pension fund in the world — a defined benefit pension plan -" say "defined benefit plans promising 100 percent guarantees have simply become too expensive for plan sponsors to underwrite" Why would Colby Cosh include that statement in an article? Where is the "too expensive"?