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Ottawa's Pension Gap: The Growing and Under-reported Cost of Federal Employee Pensions

Author

Listed:
  • Alexandre Laurin

    (C.D. Howe Institute)

  • William B.P. Robson

    (C.D. Howe Institute)

Abstract

Canadian public-sector pension plans typically do not use market yields to calculate their liabilities: if they did, Ottawa’s unfunded pension liability would stand at $227 billion – some $80 billion larger than reported in the Public Accounts. The value of the typical federal employee’s pension entitlement grows at more than 40 percent of pay annually – much faster than the contributions to fund it – putting taxpayers, most of whom face federal tax rules preventing them from funding as rich a retirement for themselves, at risk of having to bail out Ottawa’s pension plans.

Suggested Citation

  • Alexandre Laurin & William B.P. Robson, 2011. "Ottawa's Pension Gap: The Growing and Under-reported Cost of Federal Employee Pensions," e-briefs 127, C.D. Howe Institute.
    • Handle: RePEc:cdh:ebrief:127
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    File URL: https://www.cdhowe.org/public-policy-research/ottawa%E2%80%99s-pension-gap-growing-and-under-reported-cost-federal-employee-pensions
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    References listed on IDEAS

    as
    1. James Pierlot & Faisal Siddiqi, 2011. "Legal for Life: Why Canadians Need a Lifetime Retirement Saving Limit," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 336, October.
    2. Alexandre Laurin & William B.P. Robson, 2009. "Supersized Superannuation: The Startling Fair-Value Cost of Federal Government Pensions," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 122, December.
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    Cited by:

    1. Ake Blomqvist & Colin Busby, 2012. "Better Value for Money in Healthcare: European Lessons for Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 339, January.
    2. Christopher Ragan, 2012. "Financial Stability: The Next Frontier for Canadian Monetary Policy," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 338, January.
    3. David R. Percy, 2012. "Resolving Water-use Conflicts: Insights from the Prairie Experience for the MacKenzie River Basin," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 341, February.
    4. Xiaoxing Liu & Ying Zhang & Lin Fang & Yuanxue Li & Wenqing Pan, 2015. "Reforming China’s Pension Scheme for Urban Workers: Liquidity Gap and Policies’ Effects Forecasting," Sustainability, MDPI, vol. 7(8), pages 1-19, August.
    5. William B.P. Robson & Alexandre Laurin, 2012. "Federal Employee Pension Reforms: First Steps - on a Much Longer Journey," e-briefs 140, C.D. Howe Institute.
    6. Adam Aptowitzer & Benjamin Dachis, 2012. "At the Crossroads: New Ideas for Charity Finance in Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 343, March.
    7. Joseph Doucet, 2012. "Unclogging the Pipes: Pipeline Reviews and Energy Policy," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 342, February.

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    More about this item

    Keywords

    Pension Papers; Canadian public-sector pension plans; unfunded pension liability; Public Accounts;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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