Federal Superannuates National Association (FSNA)

Federal Superannuates National Association (FSNA)

April 04, 2012 16:08 ET

Federal Budget a Major Blow to Federal Public Service Pocket Books

OTTAWA, ONTARIO--(Marketwire - April 4, 2012) - The National Association of Federal Retirees (FSNA) Board of Directors are concerned that a major blow has been dealt to public servants.

"The financial impact of the recently released federal budget will have far-reaching consequences on thousands of federal public service employees, including Canadian Forces and Royal Canadian Mounted Police," said Hélian Lizotte, FSNA National President, at the conclusion of the FSNA Board of Directors meeting in Ottawa.

Over a three year period, federal employment will be reduced by about 19,200. Six hundred executive positions will be eliminated. The cuts will have an effect not only on public service employees but on all Canadians, from coast to coast to coast.

It is proposed that the pension contribution cost-sharing ratio will move to 50/50 between employee and employer. With the current employee contribution level at 36 percent, this 14 percent increase to the employee contribution ratio will have a significant negative impact on employees' net pay. In addition, those who join the public service after April 1, 2013 will be subject to a retirement age of 65, up from the current age 60.

A recent FSNA poll found that 78 percent of the respondents were against delaying the age of eligibility for Old Age Security (OAS) from 65 to 67. These results paralleled the responses of other similar polls in Canada.

Despite public opinion, the government confirmed that it would implement the delay. This change will start in April 2023, with full implementation by January 2029, and will not affect anyone who is 54 years of age or older as of March 31, 2012. Canadians under 50 will not see OAS payments until they turn 67.

"Increasing the age of retirement will create a further demographic divide between the boomers and the next generations," said Lizotte. "Gen X'ers and Gen Ys have been waiting for the boomers to retire - now they'll have to wait that much longer."

The members of FSNA's Board of Directors were encouraged by the government's decision to ensure Veterans Affairs Canada programs that currently provide income support benefits until age 65, will be aligned with changes to the OAS program. Without such an alignment, individuals receiving benefits from these veterans' programs would stop receiving them at age 65 and face an income gap until age 67 when they become eligible for OAS and GIS. The alignment will ensure that these individuals do not face a gap in income at ages 65 and 66.

FSNA is the largest national advocacy organizations representing federal retirees - their partners and survivors - from the Public Service of Canada, the Canadian Forces, RCMP and the retired federally appointed judges. FSNA is a not-for-profit association with more than 175,000 members and 84 branches across Canada. Its mission is to protect and enhance the pension, health and dental insurance benefits of federal retirees, and senior's benefits in general.

Contact Information

  • Rosemary Pitfield
    Director, Communications
    rpitfield@fsna.com
    (Mobile) (613) 355-0889
    (Office) (613) 745-2559 ext 225