Personal Finance

Envy of government worker's pension?

  • Last Updated:
  • May 3rd, 2016 5:12 pm
Sr. Member
Dec 26, 2015
517 posts
306 upvotes
Manitoba
bruceh2015 wrote: If you're concerned about leaving an estate for your kids, don't count on the RRSP. Almost one half of my mom's RRSP disappeared in income tax at death. An RRSP is great if you live long enough to spend it and enjoy it, otherwise you're throwing away money. I think she actually suffered a net loss on the RRSP despite benefiting from the tax deferred growth and deductions on earned income.
wow well it sounds like that sure would be a crappy scenario at the end of the day
Deal Addict
Jul 8, 2013
1956 posts
2651 upvotes
Red Deer, AB
TrevorK wrote: Government workers do not get things like profit sharing, stock options and yearly bonuses. Most people seem to forget about these things when complaining about the benefits that government workers have.
Yeah but the government employees also work just 37.5 hours a week. Any OT that they work gets paid at 1.5x. For me, I work 50+ hours a week sometimes during month-end, and my bonus is not as high as you may think.

Comparing $/hour, Government > Private. Add in the defined benefit pension plan, 3 weeks+ sick leave, disability benefits, more generous vacation allotments, much better benefits plan, it is no doubt that government employees are not just well-paid but extremely pampered.
Deal Fanatic
May 5, 2008
5687 posts
2356 upvotes
Winnipeg
This was emailed a few weeks back

______________________________________
Subject: FW: Fwd: MY CPP $$ & YOUR'S as well

I would like to have my “ Back-pay” right now ! It’s a shame , is it not ?


KEEP PASSING THIS AROUND UNTIL EVERY ONE HAS HAD THE OPPORTUNITY TO READ IT... THIS IS SURE SOMETHING TO THINK ABOUT!!!!

(and to ask your M.P. about!)Waste of time, he/she has to vote the party line. We only get to put our X on a ballot every 4 years.

THE ONLY THING WRONG WITH THE GOVERNMENT'S CALCULATION OF AVAILABLE CPP IS THAT THEY FORGOT TO FIGURE IN THE PEOPLE WHO DIED BEFORE THEY EVER COLLECTED A CPP CHEQUE!!!


WHERE DID THAT MONEY GO?


Remember, not only did you and I contribute to CPP but your employer did, too. It totalled 15% of your income before taxes. If you averaged only $30K over your working life, that's close to $220,500. Read that again. Did you see where the Government paid in one single penny?

We are talking about the money you and your employer put in a Government bank to insure you and I that we would have a retirement cheque from the money we put in, not the Government. Now they are calling the money we put in an entitlement when we reach the age to take it back. If you calculate the future invested value of $4,500 per year (yours & your employer's contribution) at a simple 5% interest (less than what the govt. pays on the money that it borrows), after 49 years of working you'd have $892,919.98.

If you took out only 3% per year, you'd receive $26,787.60 per year and it would last better than 30 years (until you're 95 if you retire at age 65) and that's with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you'd have a lifetime income of $2,976.40 per month.

THE FOLKS IN OTTAWA HAVE PULLED OFF A BIGGER PONZI SCHEME THAN BERNIE MADOFF EVER DID.

Entitlement my foot, I paid cash for my CPP! Just because they borrowed the money for other government spending, doesn't make my benefits some kind of charity or handout!!

Remember Senator's benefits? --- free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days. Now that's welfare, and they have the nerve to call my CPP retirement payments entitlements?

The latest estimate (as per Global News) is that it is
going to cost SIX HUNDRED MILLION ($600,000,000) to bring in the 25,000 refugees. The government (according to the Public Accounts office) is already FIVE BILLION in the hole. How much more will they take from our CPP to cover this expense. I still don't see any money for the veterans. What happened to the Canadians first philosophy. Amazing how they can always find money for their pet projects.
The other amazing thing is that the new Immigration Minister, John McCallum, in a Global Interview yesterday said that he was presenting his plan to Cabinet this Thursday. He could not be pinned down as to cost. HELLO, 25,000 REFUGEE IMMIGRANTS IS A LIFETIME COMMITMENT FOR EACH ONE. They are writing a blank cheque out of our CPP. The new philosophy is refugees 1st, Canadians last. Who stands on guard for thee???

They call CPP an entitlement even though most of us have been paying for it all our working lives, and now, when it's time for us to collect, the government is running out of money. Why did the government borrow from it in the first place? It was supposed to be in a locked box, not part of the general fund.


Sad isn't it? 99% of people won't have the guts to forward this. I'm in the 1% and I just did.
Deal Expert
Aug 2, 2001
17044 posts
7390 upvotes
[QUOTE=airmail;25834553They call CPP an entitlement even though most of us have been paying for it all our working lives, and now, when it's time for us to collect, the government is running out of money. Why did the government borrow from it in the first place? It was supposed to be in a locked box, not part of the general fund.[/quote]

The last report I had read showed that CPP was proven (by a third party) to be fully funded for more than 70 years. It's not going away any time soon. But the same people who think government workers somehow have a gravy train of money are the same ones that think CPP is magically going away.
Deal Expert
Aug 2, 2001
17044 posts
7390 upvotes
TuxedoBlack wrote: Yeah but the government employees also work just 37.5 hours a week. Any OT that they work gets paid at 1.5x. For me, I work 50+ hours a week sometimes during month-end, and my bonus is not as high as you may think.

Comparing $/hour, Government > Private. Add in the defined benefit pension plan, 3 weeks+ sick leave, disability benefits, more generous vacation allotments, much better benefits plan, it is no doubt that government employees are not just well-paid but extremely pampered.
That's quite a broad generalization. Many government employees work unpaid overtime. Many private sector employees only work the hours they are paid for.

What experience are you basing your thoughts on? Government jobs in my province do not reflect anything what you say - especially when our economy was booming and government workers were sometimes making half of what they would in private industry.
Deal Guru
Dec 11, 2008
10142 posts
1613 upvotes
Government like Private has some better ones and worse ones. It all depends which one you have.

I feel like I am in the lucky ones. $100k+ for 35hr week, 4 weeks after 7 years and will get 5 weeks after 15. But since they gave me 2 year external credit, I get it after 13 years. Pension and full health/dental benefits etc.

Im fortunate to be pretty frugal so I manage to save a ton of my take home income and save that on top of my pension because you never know if that will be gone.
Deal Fanatic
Sep 21, 2004
8536 posts
1328 upvotes
Pros and cons. A lot of envy/jealousy/etc from myths or misunderstandings. A government job is definitely a good gig but it's not as gold plated as some people or the media make it out to be.

Regarding the pension :
-average contribution us about 10% of net income annually. If most people contributed that much into their rrsp, they'd be doing pretty well too.
-the average pension is worth just over 1 million but this is a theoretical value only. It cannot be withdrawn.
-if you can invest your rrsp at 8% roi with the 10% contribution rate above, you'd be ahead of the federal pension. Eg. If you're a good investor, it actually holds you back.
- if you die and/or spouse die, that's pretty much it. The money goes "poof".

Lots to consider. Good jobs but not perfect and not for everyone.
Deal Addict
Jan 2, 2015
2182 posts
1671 upvotes
NOT centre of Univer…
I have worked both private and public, but private more. Ironically, my private sector company had an option of a DB or a DC pension. I choose DC so I wouldn't ever be tied down. When I went to public, I attempted to opt out of the pension and was not allowed too. I pay 10+% of my salary. I took a twenty percent pay cut to join public, had LESS vacation days, I did so for a bit more of a work life balance. The hours are less than what I did on private and it is not as demanding. On the hand, I do not get bonuses, and it is really hard to move around or get promoted. I was getting promoted or moving every 18 months at my previous company. I also do not get over time in either job, as I am in management

I joined public for a different perspective, and more flexibility while my kids are young. I have no intention of staying until I retire.
Sr. Member
User avatar
Apr 28, 2012
957 posts
337 upvotes
QC
muppetslayer wrote: If you can't beat them, join them :cry:
That's what I did, and now having a good 35hours/week job with good benefits and pension :twisted:
Deal Fanatic
User avatar
May 2, 2006
7586 posts
1962 upvotes
GTA
"Envy"?.. I feel happy for those who ended up with a nice nest egg in their retirement, doesn't matter how they got there... I see so many people in their 60s with no savings and still carrying debt, it's just sad.
Member
Mar 13, 2012
340 posts
101 upvotes
Sarnia
airmail wrote: This was emailed a few weeks back

______________________________________
Subject: FW: Fwd: MY CPP $$ & YOUR'S as well

I would like to have my “ Back-pay” right now ! It’s a shame , is it not ?


KEEP PASSING THIS AROUND UNTIL EVERY ONE HAS HAD THE OPPORTUNITY TO READ IT... THIS IS SURE SOMETHING TO THINK ABOUT!!!!

(and to ask your M.P. about!)Waste of time, he/she has to vote the party line. We only get to put our X on a ballot every 4 years.

THE ONLY THING WRONG WITH THE GOVERNMENT'S CALCULATION OF AVAILABLE CPP IS THAT THEY FORGOT TO FIGURE IN THE PEOPLE WHO DIED BEFORE THEY EVER COLLECTED A CPP CHEQUE!!
The Canadian Taxpayers Federation did a great debunking of this email in their mythbusters website section:
Deal Addict
User avatar
Oct 19, 2007
1478 posts
432 upvotes
45.467253°N, 75.5123…
TrevorK wrote: That's quite a broad generalization. Many government employees work unpaid overtime. Many private sector employees only work the hours they are paid for.

What experience are you basing your thoughts on? Government jobs in my province do not reflect anything what you say - especially when our economy was booming and government workers were sometimes making half of what they would in private industry.

Gimme a break, will ya...
Deal Addict
Jul 8, 2013
1956 posts
2651 upvotes
Red Deer, AB
TrevorK wrote: That's quite a broad generalization. Many government employees work unpaid overtime. Many private sector employees only work the hours they are paid for.

What experience are you basing your thoughts on? Government jobs in my province do not reflect anything what you say - especially when our economy was booming and government workers were sometimes making half of what they would in private industry.
My experience is based off of friends that are in CRA. There are hundreds of people that are on long-term "sick" leave because they have accumulated 400+ days of sick leave over time. That means we are footing the bill.
Deal Fanatic
Nov 24, 2013
6240 posts
2980 upvotes
Kingston, ON
airmail wrote: This was emailed a few weeks back

______________________________________
Subject: FW: Fwd: MY CPP $$ & YOUR'S as well
It baffles me that people give chain emails the time of day. It baffles me even more that people take the time to write these things full of factual errors or, like in this case, modify American ones, for the express purpose of hoodwinking people to suit their agenda.
Jr. Member
Apr 6, 2013
179 posts
72 upvotes
Edmonton
izzyzz wrote: "Envy"?.. I feel happy for those who ended up with a nice nest egg in their retirement, doesn't matter how they got there... I see so many people in their 60s with no savings and still carrying debt, it's just sad.
I agree with you, I have a few close family members who straight up say they will never be able to retire, I don't care if "it's their own fault" it's still sad to see.
Deal Guru
May 29, 2006
10413 posts
3049 upvotes
its a sick pension, because if you start with the government at say 20, you retire at 45-50, get pension, go work somewhere else and get pension and new paycheck. my father in law got a full pension and retired and was hired back as a contractor for 3 years a month after he retired, so doing the same job, getting paid big bucks per hour, and a pension also.
Deal Addict
User avatar
Feb 1, 2012
1649 posts
2506 upvotes
Thunder Bay, ON
xansmommy wrote: Fed public service pensions also get clawed back dollar for dollar once you are eligible for CPP/OAS
Clawed back is the wrong way to look at it. The pension and CPP are integrated, so that early retirees' income will be level before and after CPP starts to pay out at 65. It is also referred to as a Bridge Pension before 65. This simplifies cash flow planning for early retirees. If the pension was not integrated, the payout would be adjusted so the expected pension benefit over the retiree's expected life would be the same.

For some reason this benefit (integration = simpler cash flow planning for early retirees) gets interpreted as a disadvantage (clawback).
Deal Addict
User avatar
Apr 22, 2005
1387 posts
314 upvotes
sparkaction wrote: Salaries for government work bees are a lot lower than the private sector so they get little now for a good pension in the future. Don't know if there are any dual income government workers living in upper end neighborhoods.
Depends on the province. In the province I moved to public sector salaries pay substantially more than similar jobs in other province public sector and waaaaay more than the private sector anywhere in the country.

The meme that government jobs pay badly isn't true IMHO. Especially once you factor in benefits, pension and job security.

With that said at the provincial level not all public sectors are created equal in terms of compensation so do your homework.
Deal Addict
Aug 30, 2011
3462 posts
1222 upvotes
Ottawa
rocking23nf wrote: its a sick pension, because if you start with the government at say 20, you retire at 45-50, get pension, go work somewhere else and get pension and new paycheck. my father in law got a full pension and retired and was hired back as a contractor for 3 years a month after he retired, so doing the same job, getting paid big bucks per hour, and a pension also.
Was he military? This cannot happen with the federal government. Earliest you could retire with an un-reduced pension was 55, and the rules have changed now. Also, the rules were (and presumably remain) that the employer cannot rehire someone on contract right after retiring.
Deal Addict
Aug 30, 2011
3462 posts
1222 upvotes
Ottawa
TuxedoBlack wrote: My experience is based off of friends that are in CRA. There are hundreds of people that are on long-term "sick" leave because they have accumulated 400+ days of sick leave over time. That means we are footing the bill.
There are people who abuse the system anywhere. I retired with well over a year of sick time and consider it unethical to use sick leave if you're not sick. Those who do so are getting unethical doctors to approve their leave (or else they really are sick).

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