this post was submitted on 09 Dec 2024
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[–] karlhungus@lemmy.ca 3 points 1 month ago (1 children)

The government doesn't guarantee the pension if the fund fails

This is incorrect, emphasis mine:

Funding shortfall The Government of Canada has a legal obligation to pay plan member pension benefits. If the plan becomes underfunded for any reason (for example, higher-than-expected costs, lower-than-expected investment results), the government is required to transfer additional funds into the public service pension plan. This has occurred before, including during the period from 2013 to 2018.

I don't dispute that they've renegotiated contribution rules, I don't know the history of this pension fund that well. Typically these rules are renegotiated with union agreement.

[–] n2burns@lemmy.ca 2 points 1 month ago* (last edited 1 month ago)

This is talking about if the plan cannot pay it's pensions. That's why it starts with:

The Government of Canada has a legal obligation to pay plan member pension benefits.

It's not talking about if actuaries predict a future funding shortfall. In that case, they can change the rules before there's actually a shortfall, as they did in 2012.

I don’t dispute that they’ve renegotiated contribution rules, I don’t know the history of this pension fund that well. Typically these rules are renegotiated with union agreement.

The unions have no input into contribution rules. Any changes are decided unilaterally by the government, as shown in your source (look for "Jobs and Growth Act, 2012").

EDIT You are correct, that the government guarantees the fund if it completely fails. What I meant to say is the government isn't liable to top it up if it's underfunded. My bad on the wording.