Status of Women Committee on Dec. 1st, 2009

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Thank you.

[The Chair, Liberal, Hedy Fry]

Cathy.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Madam Chair.

As we explore these issues, more questions come along that I think are important. I would actually like to pick up on the point that my colleague was talking about. We're seeing from your statistics that perhaps the proportion of males to females is much more equal.

This pension plan has been around for a long time. How many years has it been in existence?

[Patty Ducharme]

You know something? I don't know when the Public Service Superannuation Act came into being—Was it 1954?—but it has been changed and improved along the way. It has been amended.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

One of the focuses we've talked about is seniors and poverty. Where perhaps we don't have a lot of clear data is in terms of, let's say in 1950 a much larger percentage of your workforce was male and now were getting these benefits, given what we know about mortality and females living longer, we probably have a lot of women who are existing on survivor benefits.

I'm just musing about it. You probably don't have data, but I think it would be an interesting area for the analysts to have some data on.

[Annette Marquis]

The data used to prepare Tables 3 and 4 are all drawn from the reports on the public service pension plan tabled in the Parliament of Canada. I have with me copies of some pages containing statistical tables from the last annual report for the year ending March 31, 2008 which was tabled in Parliament last spring.

I am glad you asked the question, because we have in there a statistical table that shows that in the year ending March 31, 2008, the average annual amount of pensions paid to survivors — whether legally married or common law spouses — was $11,152 compared to an average of $23,422 paid to all beneficiaries of the plan. We must not forget that this benefit is paid to all survivors regardless of whether they are 60, 80, 85 or 90 years old. As for the amounts in the third table, these are the figures for all beneficiaries, all retirees, whatever their age. Some are younger and others are very old. This amount did not change much over time. The annual average amount of pensions paid to surviving spouses was $10,795 in 2007 and $10,399 in 2006. So there is a slight increase, but the difference is small.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

I want to try to get a couple of more questions in.

We were absolutely stunned to hear that at times the spouse was not designated the CPP beneficiary. Can that happen with this plan?

[Patty Ducharme]

No. If you get divorced, it's subject to the Pension Benefits Division Act. Is that what it's called? Your spouse, your legal spouse--

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

But if you're not divorced and you die...?

[Patty Ducharme]

We all know that legal cases can get very complicated. If you're not divorced and you're cohabiting with somebody for more than 12 months, things can get very complicated legally.

It's my understanding that you do designate your beneficiary. The worker has the responsibility to designate the beneficiary of a benefit in the event of death.

[The Chair, Liberal, Hedy Fry]

I think that's it. I've let you go over, but that's fine.

Go ahead, Monsieur Desnoyers.

[Luc Desnoyers, Bloc, Rivière-des-Mille-Îles, QC]

Thank you, Madam Chair.

In your brief, on page 5, you state that as of March 31, 2008, the annual average retirement benefit paid to women retired from the federal public service was $17,061, which is 62,7% of the annual average amount paid to their retired male counterparts. You know that the poverty line is somewhere around $23,000. Consequently, with $17,000, these women are definitely below the poverty line. This leads me to the last sentence of your document where it says: “However, available data do not allow us to state that retirement benefits paid under the Public Service Superannuation Act are sufficient to keep all beneficiaries out of poverty.“ This suggests that your plan does not protect everybody against poverty.

This brings me to the position of the Canadian Labour Congress which you support. In various documents that have been tabled by different witnesses, it says that 55% of women get their main income from the public plans, i.e. the Quebec Pension Plan or the Canada Pension Plan. This is due to the fact the companies where they are employed do not have a pension plan that would complement the combined amount of the CPP benefit and Old Age Security benefit, depending on your eligibility. This means that they are very close to the poverty line.

The CLC proposes to increase the replacement rate from 25% to 50% over the long term, which would clearly help those women who are not in or who leave the labour market, either to raise children or to become informal caregivers, caring for elderly relatives.

I would like to hear your views on this. Furthermore, several witnesses said they would like to see a national summit on pensions in Canada, to discuss all pensions but more specifically the issue of women's pensions. I would like to hear your views on this, even if this makes for a lot of questions.

[Patty Ducharme]

I think having a national summit on pensions or a national summit on gender equality and women's full participation in the economy would be a grand thing. I would definitely want to be there. I'd send some cards and ask you to invite me.

Seriously, though, I think this is a huge issue. It impacts every single person in this room, regardless of whether you're a member of Parliament or not. I know some of you have daughters, sisters, or mothers who are definitely impacted by the fact that if they worked as a secretary in a law office or even if they were a lawyer, they didn't have a pension plan.

I have to be really honest. When I was a young public sector worker, I didn't think I'd live to retire. There was sort of this arrogance of youth that I was going to move to a different job and do something else. Obviously, I did move to something different, but I'm certainly happy that I was a public sector worker and that I was obligated to participate in the superannuation plan. I'm very grateful to the Government of Canada for having the foresight to come up with a national superannuation plan. And I look at people I work with and I know that they feel the same way.

I think that in our current society we like to individualize collective problems. I find that tendency to be quite scary. We have an obligation to look after our old and our young. Those of us who are able to, can go and work. We can hopefully earn a living wage. But for those who can't, we need to be able to take care of those people and to ensure that they can provide for themselves and for their offspring.

Our plan is not a perfect plan. It still has shortcomings. I talked about if you relocated with your spouse and you've got a job that's not a high-paying job.... Let's face it, most public sector jobs are not the jobs we read about in the newspaper, where people are making huge sums of money. Most public sector jobs are people earning in and around $40,000 a year and trying to support their families on that.

If you come back to work after a leave and you've got to pay triple superannuation for three years so that you can buy back three years' worth of leave without pay, and you're paying back the employer's portion, your portion, and your current portion for working, odds are you're going to opt out of buying back those three years. That has a direct impact on people as they get old, and on their ability to look after themselves. And then it's society, be it the gains supplement.... We all pay again for it, and at the cost of their dignity. And human dignity is a critical part to a full participation in society.

[The Chair, Liberal, Hedy Fry]

Thank you very much, Patty.

May I remind everyone that we do have a vote. Bells start at 5:15 and we have a motion, so we need to have some time. I would like us to finish at 5 o'clock so we can have 15 minutes for whatever is going to happen in terms of members' business.

We have two people. I'd like everyone to stay within the times for their questions and answers, please.

Irene.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Thank you, Madam Chair. I'll be very brief.

Last week we had Professor Lynn McDonald here. She talked about women who experience forced retirement. These are women who are caregivers for their children or for infirm spouses or for relatives they need to provide care for. They are also women who are forced to retire because of their own health issues.

They may wish to come back into the job market after their caregiving days are done, but their skills are out of date or they're perceived as being too old to come back, so they're pushed into retirement before they're ready. As a result, their CPP is most definitely not adequate, and they're reduced to living on OAS and GIS. The cut-off in terms of OAS and GIS is about $12,000 a year. That's what you get if you don't have CPP, and yet the low-income cutoff is $18,000.

In terms of the CPP, I know there's a flexibility there. If you retire early, you take a 5% penalty; if you stay late, you have a 6% reward. The government is currently looking at perhaps changing this by increasing the penalty if you retire early and increasing the incentive at the other end if you stay later.

It seems to me that these women who are forced into early retirement are caught in a trap. Would you comment on that, and perhaps suggest a way to ensure that women aren't victimized by this proposed change? Is there a way of increasing the incentive for delaying retirement without this penalty at the end?

[Patty Ducharme]

I think people who are caregiving family members should be accruing pensionable time under the Canada Pension Plan. If we look at traditional stereotypical gender roles, if a husband's sick, the wife or the woman in his life is going to look after him at home. She's going to save a whack of money for the public purse in home care, hospital costs, etc., and she is obviously going to take a big hit economically at the end of it.

The same would be said for a man who would be willing to do that. Traditionally, however, in our society--and that would be an interesting study to do, I suppose--more women end up in hospitals when they have terminal illnesses, or they end up being cared for at home by other women family members, such as a mother, a sister, or a daughter.

Those gendered roles in our society definitely have an impact on the economic well-being of women for the rest of their lives. When they're doing something that we should be providing--and we should be providing home care--we should ensure that they are economically made whole at the end of that situation.

[The Chair, Liberal, Hedy Fry]

Now we have Dave Van Kesteren.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you again for showing up.

My colleague was going to ask you this question, and it's a good one. Years ago, in Cathy's case, she was younger and she wanted to do some travelling. She took the money out of her pension and used it for travel. Can you still do that?

[Patty Ducharme]

If you leave the public service and your pension hasn't vested, you can take the money out, but it's your portion and your portion alone.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

So it's still possible for people to do that.

When that's been exercised, the question that begs to be answered is what is our responsibility as a society when those people reach retirement age?

[Patty Ducharme]

Say, for example, you decided to teach English or learn French or do something overseas and you were gone for a period that exceeded...so that you had to cash out your pension. You weren't 40, your pension wasn't vested, and you chose to take the money out. If you come back to a public sector job and you have the option of buying back that pensionable time, you buy it back. It's the same with the military. It's the same with municipal police forces. I personally bought back time from working as a summer student as a border services officer.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

But what if you can't?

Let me give you another example. Somebody is 40, so they're able still to opt out, and they thought perhaps that they would try their chance in the private sector. They needed the money and took it out, but things didn't turn out. What is our responsibility to those people who wouldn't be able to recoup that money?

[Patty Ducharme]

We have other public pensions. We have the Canada Pension Plan, and we absolutely support increasing the quantum of the Canada Pension Plan. We think that is critically important.

People do make decisions that, obviously, they are responsible for. I certainly wouldn't go out and promote to our membership that since they are not 40, to withdraw all their money, which to me is taking a 50% hit.

Actually your pension investments are taking taken a 60% hit, because you get a little bit of interest but you don't see any of the employer's portion. In the long run, the plan benefits because it gets to keep what in theory is the employer's 60% contribution. That is certainly not something I would promote to people. It doesn't make any sense.

I would question, though, why we would bar people from buying back pensionable time when in fact the plan is unjustifiably enriched after people have left the plan, given the employer's contribution is 60% and the worker's contribution is 40%.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

There is another troubling trend. We are seeing a pretty good growth in the public sector, but in the private sector we are seeing shrinkage in the pension plans. More and more, that gap is starting to widen. In the private sector, for whatever reason--whether companies are stressed at this point or whether people just don't make the choice.... Do you see it as a problem? Are you thinking that if we don't get a handle on this, if we don't improve the private sector, we may have some real disparity here that causes social difficulty?

[Patty Ducharme]

I definitely believe that pension funds need to be funded. I think it's criminal behaviour when companies fail to fund their pension plans or rob them to take unreasonable risks, to pay debts, or to acquire new assets.

I appreciate that there are many companies, not just in Canada but around the world, that have seen their pension plans really devalue due to the economic downturn, so that if they had to totally pay out the plan they don't have the means to do so. If a plan is well managed and well administered by trustees, people need to be given the time and opportunity to get the plan fully funded again.

Having strong pension plans is just good public policy. We are one of the richest countries in the world. Corporations and the public sector should have good pension plans. That is always framed by a good, strong legislative framework that ensures that plans are adequately funded for those who have contributed into the plan.