Evidence of meeting #33 for Veterans Affairs in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was rcmp.
A recording is available from Parliament.
Director, Pension Services, Royal Canadian Mounted Police
There's a whole equation that comes in when you're dealing with the guarantee of income for our regular members when, due to circumstances, they're unable to fulfill their duties. There's a complex equation in terms of disability pensions and Great-West Life insurance issues. When people hit 65, it mutates into something else.
So it is a valid point that you raise: when they hit 65, they take a hit. Is it a concern? Yes, it is a concern. But you're really getting into the issue of an insurance question more than a pension question--
NDP
Peter Stoffer NDP Sackville—Eastern Shore, NS
But sir, if I may interrupt, they also take a hit right away when they get the disability. That CPP disability, at age 55, if you receive it, is deducted immediately from your annuity. It's not at 65; it's right away.
You'll get your RCMP annuity, your CPP disability, but the CPP disability is deducted from your annuity.
Director, Pension Services, Royal Canadian Mounted Police
Again, it's the issue of the combination of all these programs, if you will, that allows for certain--
Director, Pension Services, Royal Canadian Mounted Police
But again, sir, it's the net effect of all these programs that allows for a certain income. From our perspective, the pension is one part of it; we ensure that, with the other programs that come into play, a member's income is protected. When they hit 65, again, it mutates into something else, but it's close to being the same.
Now, for this particular individual, I haven't pulled his file and gone through it to look at the numbers. I could do that. I could sit down with him and talk to him and explain it to him. I have no issue with doing that. It would be a pleasure to do that.
But for that particular individual who is caught in the kind of situation you're talking about, that is the one group that perhaps slides through the crack and is hit, to some degree--
Director, Pension Services, Royal Canadian Mounted Police
In terms of numbers, it's about 8%.
NDP
Peter Stoffer NDP Sackville—Eastern Shore, NS
You see, the reason I ask the question, if I may have a moment, is that if I'm 55 years old and I retire from the RCMP or the military, I can get my annuity. But if I'm 55 years old and disabled out of the military, I get my annuity and CPP disability, but the disability is deducted from my annuity.
So it doesn't matter if I walked out of the RCMP or military or got carried out, I would still get the same amount. In the first, I retired voluntarily, and in the other, I was disabled.
Director, Pension Services, Royal Canadian Mounted Police
I understand what you're saying.
NDP
Peter Stoffer NDP Sackville—Eastern Shore, NS
I'm asking you, is that fair? The person with the disability requires those additional funds to handle the day-to-day concerns they have. I've compared this many times to military and RCMP officers across the country. I've seen hundreds of them.
It's about a simple act of fairness. This is just simply wrong. You say they fall through the crack. It's a major hole, sir, it's not a crack. It's a major hole. Bill C-201 addresses it to fix that.
Also, I wouldn't mention SISIP. That's a completely different story.
I thank you very much, sir. I appreciate that. I could go on all day, but I thank you for coming, sir.
Conservative
Conservative
The Chair Conservative David Sweet
Okay, great.
We move on to the Conservative Party, for seven minutes, Mr. Hawn.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
Thank you, Chair, and thanks to the witnesses for coming.
I have a number of questions. It seems to me the discussion on this whole bill has become a little unfocused, for a variety of reasons. We heard from a correctional officer at the last meeting, which is all very nice, but it's not relevant to Bill C-201. We talked about the unique nature of service and the difficulty of service. I've served for 31 years, and I can attest to that and be empathetic and sympathetic to that, but that doesn't replace facts. We've thrown in the red herring about the MP pensions. It's a complete red herring--apples and oranges. There's nothing clawed back from MP pensions because there's no benefit given to MP pensions, so it's a complete red herring.
Mr. Stoffer mentioned pension plans changing. Pension plans change all the time. During my 31 years of service the pension plan has changed probably three or four times. None of those changes amounted to one penny more or less out of my pocket; it was just the terms of the pension.
The disability issue is legitimate, but that, frankly, is another issue that is largely separate from Bill C-201. It's worthy of being discussed, clearly, but it's outside of Bill C-201 for the most part.
I would like to ask Ms. McKenna-Fleming--and maybe Mr. Cape as well, to get the two different perspectives--to clarify what exactly Bill C-201 would do to the Canadian Forces and RCMP pension plans if implemented, and exactly who it would apply to and who it would not apply to.
Acting Director General, Compensation and Benefits, Department of National Defence
Just to put it simply, if we do both of them, it would cost $7 billion. The bill doesn't say where that $7 billion is going to come from, who's going to pay it, who's going to pay the ongoing cost of the plan. And it's not retroactive, as far as I understand.
Director, Pension Services, Royal Canadian Mounted Police
I agree with the comments in terms of the expense on the pension fund. It doesn't talk of the historical issue, in terms of people who are in their sixties right now who would actually benefit the most from it or who are driving this bill. It wouldn't help them.
To me, it's not a plus; it's a neutral thing.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
Okay.
The government does not support this bill, and obviously that's fair, but that doesn't mean we have any less respect or gratitude for the service of men and women in the Canadian Forces or the RCMP. There are many other pension plans--the Public Service Pension Plan, teachers' plans, provincial pension plans, and so on--that are structured exactly the same way. As far as I know, there are no organizations out there that are lobbying to have people in their pension plans pay for an integrated plan but collect a stacked plan, as is the suggestion with Bill C-201.
Is there anybody else out there campaigning for this kind of stuff, and if not, why not?
Director, Pension Services, Royal Canadian Mounted Police
No, but Canada Post, I believe, used to have it and stopped it because it wasn't cost-effective. It was an expensive proposition.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
They were paying for an integrated plan and collecting a stacked plan? They were collecting something they had not paid for?
Director, Pension Services, Royal Canadian Mounted Police
Yes. It was Canada Post or Bank of Canada, I'm not sure which.
Acting Director General, Compensation and Benefits, Department of National Defence
I would just add that only 30% of Canadians have pension plans of any type. Of those, a growing number are becoming what they call defined contributions. There's an agreement that you'll give x number of dollars and your employer will either match that or give some sort of a percentage of that. The entire risk of that plan rests on the shoulders of the employee.
We're very fortunate in the public service—and I'm speaking for myself now—in that we have a defined benefit plan. It's the same plan we have for our veterans and for the RCMP in that it is a defined benefit plan. It means that right now I can tell you from my benefit statement how much I'm going to have, and the risk for getting me there is borne by the government.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
There's no question veterans deserve to be treated with respect for the service they've given, whether it's to the RCMP, the military, whoever, but the government clearly also has a responsibility to taxpayers, and cost does become an issue at some point. It's been suggested that Bill C-201 could be made cost-neutral by redirecting EI benefits paid by the military, and I presume the RCMP. I pointed out when I was sitting where you are that there are several thousand military members who collect EI every year on maternity leave or parental leave. About half the people who leave the Canadian Forces leave before they're eligible for pension; therefore, they are eligible under the qualification criteria for EI, which would wind up taking those benefits away from those people.
I'll ask again, Mr. Cape and Ms. McKenna-Fleming, what's your understanding of the costs associated with Bill C-201? Ms. McKenna-Fleming, you mentioned a bit about that. Can it be made cost-neutral, and who's going to fund Bill C-201 if it passes?