Mr. Speaker, in managing the federal benefit plans in a way that is affordable, sustainable, and fair for both plan members and Canadian taxpayers, the Government of Canada noted in Economic Action Plan 2013 that it would examine overall employee compensation and pensioner benefit with a view to aligning federal compensation with other public and private sector employers. The government worked with and consulted key stakeholders, including retiree representatives, with a resulting negotiated settlement reached with retiree representatives and federal public sector unions.
The government health care plan is a voluntary program that retirees can opt into. To have this choice is a privilege. The benefits of the plan are generous, with coverage included for hospital beds and therapeutic mattresses, hearing aids, psychological services, and $15,000 a year in nursing services. Retired employees may choose to join the government program or elect to join in any number of alternative benefit plans available to Canadians. It should be noted that the provision of health care benefits to retired workers is the exception in Canada, not the rule. Most public and private sector employers in Canada do not provide health care benefits to employees after retirement, as alternative plans are available.
Previously, the costs of the federal benefit plan were subsidized by Canadian taxpayers, with retirees paying 25% of the plan costs and Canadian taxpayers 75% of the costs. As a result of the negotiations, the costs of the voluntary supplemental plan will be split evenly between retirees and Canadian taxpayers. Canadian taxpayers should be aware of the health care benefits that they subsidize as part of the federal public servants’ retirement benefit package. It should be noted that this negotiated agreement does not apply to low-income pensioners, who will not be subject to the 50:50 cost-sharing measures.
With regard to (a), as of November 30, 2014, the following is the breakdown of Public Service Health Care Plan pensioner member participation: with regard to (a)(i), the federal public service, based on pensioners in receipt of a pension under the Public Service Superannuation Act: 205,843; with regard to (a)(ii), the Royal Canadian Mounted Police, based on pensioners in receipt of a pension under the Royal Canadian Mounted Police Superannuation Act): 16,171; with regard to (a)(iii), the Canadian Forces, based on pensioners in receipt of a pension under the Canadian Forces Superannuation Act: 80,469; with regard to (a)(iv), the Veterans Affairs client group: 2,179.
With regard to (b), the pensioner contribution rate for a single member with supplementary coverage can be found at: http://www.njc-cnm.gc.ca/directive/index.php?hl=1&lang=eng&merge=2&sid=87
An exception is that a new PSHCP pensioner supplementary relief rate will be introduced effective April 1, 2015, and will be available at the above-mentioned site on January 30, 2015. The new provision is only available to those pensioners enrolled in the PSHCP on or before March 31, 2015, and requires an application to be submitted to the pensioner’s respective pension office. Following receipt of an application, eligibility is contingent upon the pensioner being in receipt of a guaranteed income supplement, GIS, benefit or having a single or joint net income that is lower than the applicable GIS thresholds in effect on the date application is received.
The pensioner contribution rates for a single member approved for the supplementary relief provision effective April 1, 2015 will be available on January 30, 2015, at the above-mentioned site.
Contribution rates are calculated based on plan experience. As a result, the rates for (b)(iii), April 1, 2016, (b)(iv), April 1, 2017, and (b)(v), April 1, 2018, have not yet been determined. It is anticipated that the rates for April 1, 2016, will be established in early 2016. Similarly, it is anticipated that the rates for April 1, 2017, will be established in early 2017 and that the rates for April 1, 2018, will be established in early 2018.
