Bonus budget coverage
Additional information on the 2012 budget we couldn't squeeze into the April 23 issue of Canadian HR Reporter
04/23/2012|hrreporter.com|Last Updated: 04/24/2012
Editor's note: This article is an online bonus to the article, titled "What HR needs to know about the federal budget," published in the April 23, 2012, issue of Canadian HR Reporter written by Ian Genno and Karen Tarbox of Towers Watson. You can read the original article here.
Public service and parliamentarians
The Public Service Pension Plan (PSSP) will be reformed to make it more sustainable and financially responsible. Specifically, the government proposes:
•To adjust employee contributions over time to match those of the employer, so ultimately employees will make 50 per cent of all contributions. Comparable changes to the contribution rates will be made to the pension plans for the Canadian Forces, the Royal Canadian Mounted Police and Parliamentarians. Currently, PSPP members contribute 6.2 per cent of earnings up to the year’s maximum pensionable earnings and 8.6 per cent above that level, and fund about 40 per cent of the current service cost.
•The PSPP currently provides an unreduced pension for any member who retires after reaching age 60. For employees hired after 2012, the age for unreduced pensions will be raised from 60 to 65.
•The government will work with Crown corporations to ensure their pensions are broadly aligned with those available to federal employees and are financially sustainable.
The move to a 50/50 cost sharing model for federal public sector plans is consistent with Ontario’s announcement in the March 27 provincial budget. Many of the larger public sector pension plans in Ontario already apply 50/50 cost sharing and Ontario has announced its intention to take steps to ensure that other public sector plans move to that level of cost sharing.
For more information on what Ottawa is planning to do about the backlog of skilled immigrant applications, see http://www.hrreporter.com/articleview/12687-canada-scraps-some-skilled-immigrant-applications.