Canada Still Generous With Its Pensions

I know it's tough to discuss the public vs. private pension/retirement debate, nor am I particularly interested in pitting the two against one another, but I don't think there's much of an argument to be made that most of the risk falls on the private side.

Canada's pension plans are among the most generous in the world. Good or bad? I'll let this lucid 11-page report (not rooted in mythology I hope) written by experts (as opposed to semi-blow hards like me) speak for itself since its the closest and most recent study out there.

No one seems to want to point out that this disproportionate share of early-retirements in Canada is led by public sector workers. According to one report 10, self-employed people retired on average at age 66 in 1975, and that retirement age has remained intact over the intervening 30 plus years. Private sector workers taken as a whole were retiring at 65 in 1976, and that had fallen to 62 by the early part of this decade. Public sector workers, by contrast, were retiring on average at 64 in 1976-79, but by 2000-05, that average age of retirement had fallen to 59.

This research shows that since the late 1980s, the public sector has driven the early retirement trend. The proportion of early retirees within the public sector was around 56 per cent in 2005, while in the private sector it was just over 33 per cent and for self-employed individuals it was only 20 per cent.

And this is only one area in which public sector plans are more generous than what is available to the average private sector worker, and those public sector plans, being backed by the taxpayer, are not subject to the kind of market risks that affect both the Defined Benefit plans and the private investments of those same taxpayers. If I were writing the agenda for retirement system reform in this country, I would be unable to let the glaring gap between the pensions available in the public and private sectors to pass without comment.
My wonderful compatriot Paul mentioned I was a financial consultant. That much I was. And I'm still living! However, the truth is, it's well-known that public sector pensions were, on average, very good. Private sector workers don't have the luxury of early retirement (compared to their public sector brethren). My father-in-law, as a personal example, got a fraction of what he was supposed to get after loyally serving Steinberg's for over 40 years. Unfortunately, I can't pick his brain about that God rest his soul. For shame.  
Why do you think public sector jobs are so coveted? Far less risk.
It's not a bad or good thing. It just is.


  1. Many public sector workers took early retirement not by choice but when the governments pulled the rug under their feet and they did so not without cost to them and to society in general. The current nurse shortage for instance has two causes A) the massive retirements prompted by the cost cutting that led to some incentives to retirement rather than getting fired and bad educational planning through quotas. (Also horrendous working conditions in hospitals).
    Police officers are public servants, they are entitled to retirement after 32 years in service. Most enter the police force between 20 and 25 years of age, at 52 or 57 they can retire with full benefits,,,and they do. Can you blame them? They paid for it. Your study does not mention this or at least you did not quote that part if it exists.
    The money hungry investors in the private sector treat their employees most shoddily, there are exceptions but not many, that, in other countries led to revolts. North Americans are more placid and submissive, no risk of that here.

  2. Like I said, it's very hard to find studies on this.

    I think you're unwittingly proving the point, re nurses and education, about how government messes things up!

    'The money hungry investors in the private sector treat their employees most shoddily, there are exceptions but not many, that, in other countries led to revolts. North Americans are more placid and submissive, no risk of that here."

    Much to digest there. Private companies force their employees into early retirement as well. As was the case with my father in law. Only difference was he was offered several gold IGA locations.

    He turned it down!

    As for North Americans being placid, I think that's right. Only the Americans are more willing to fight back - and they are through Tea Parties.

    I don't think Canadians would ever mobilize like that.


Mysterious and anonymous comments as well as those laced with cyanide and ad hominen attacks will be deleted. Thank you for your attention, chumps.