Veterans Affairs Committee on Nov. 17th, 2009

[Michael Cape]

It could be cost neutral. That means you're going to have members contribute a lot more to compensate the fund for it. That's the way it would be cost neutral. But other than that, if the government wants to locate money somewhere else, that's the government's call. But really it's not an inexpensive proposition.

[Lynne McKenna-Fleming]

I guess I would just suggest that CF members might ask themselves why they would have to give up employment insurance coverage in order to achieve a pension benefit.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

You mentioned the cost before, which we heard from the actuary, the $7.2 billion and so on. It's not retroactive; that's just going forward. The integration of the plans was never deliberately hidden, obviously, by the CF or the RCMP. It was not as well advertised or briefed at that time. I recall not being briefed on it. Through some of the things you mentioned about the education of the members and so on and through the Second Career Assistance Network--SCAN is the acronym--there's a lot more information out there. Do you perceive—and I'll ask again, Mr. Cape and Ms. McKenna-Fleming—that those, what I would call, improved methods of getting the information out to members on a continuous, proactive basis will go a long way towards alleviating some of the distress that is legitimately felt by people because of lack of information? Do you think this will improve that situation going forward?

[Lynne McKenna-Fleming]

I would say I would hope so, except hope is not a strategy. I think I'm resting a lot of hope on our new website. But it won't be resting on hope alone. We're going to be doing an evaluation of the performance of the website—how many hits we get, how many people respond to us—and we'll be doing focus groups later on to see whether the information is getting out. So not only have we spent a lot of time crafting a message and developing a mechanism; now we're going to monitor whether it's being received.

[Michael Cape]

I'd say essentially the same kind of thing. The other thing I would add is that in the RCMP, when you retire, you sign a document that says you will contact us when you start receiving CPP, which drives the discussion of why that is there, which alludes to the point that you have to advise us because you're going to be receiving it and your pension is reduced by that amount.

The point that was made by Mr. Stoffer was why we would ask people to return some money. It's because they signed that document telling us they would tell us when they started receiving it, and they didn't.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Cape.

We'll now go back over to the Liberal Party for five minutes. Madam Sgro.

[Judy Sgro, Liberal, York West, ON]

Thank you very much again for your information this morning.

The issue to do with the disabled and where we recognize.... I realize we're not talking about Bill C-201, but we're trying to move forward a bit after today. Is there anything being done that's looking at how we are treating those who are going on a disability, trying to ensure they get the benefits and they are not the losers here when they hit the age of 65 and end up losing $700 or $800 a month? We've heard about that from many people. That's a lot of money, to suddenly have $700 less, especially if you didn't think that was going to happen to you.

So what's being done? Is anything being done in regard specifically to the issue of the disabled and this bridging aspect? I guess there isn't.

[Lynne McKenna-Fleming]

It's one issue that we are pursuing in terms of developing a solution. I suppose what I should do is rain on the parade a little bit. Cross-departmental issues are always difficult to resolve. One of the major players here is CPP, which is HRSDC. They're not here. They can't speak to why they need to cost their plan, the CPP, in such a way that this is what needs to happen to disabilities. You're certainly quite right in that we could go a long way in the business of coordinating that.

[Judy Sgro, Liberal, York West, ON]

I wanted to ask you this. If a 43-year-old today is leaving the service, how clearly does he understand anything about what's going to happen when he's 65, as far as the bridging amount is concerned? Most people at 43 think that 65 is about 50 years away, not necessarily 20 years away.

[Lynne McKenna-Fleming]

It's difficult to say how much your average person understands. We did do some focus groups in the process running up to the website, and I would say the average person in the focus groups did not understand the issue. The website is all about trying to help people come to grips with what the impact of that is going to be on them. How effective it's going to be, we won't know. The website only went live two weeks ago. We won't know for another six months to a year how effective it has been. We will continue to do the kinds of things we have been doing, which is sending people letters and letting people know in the SCAN seminars about what's going to happen to them.

Even if you did get told and did understand at 43, there's a lot of life between 43 and 65. We do send them letters once a year and tell them in that manner. I'm open to suggestions as to ways to improve.

[Judy Sgro, Liberal, York West, ON]

Okay.

I have just one other thing. Mr. John Labelle was here at our last meeting. He was a financial counsellor for the Maritime Command. He was counselling the members about their pensions and all of that, and he himself was unaware of the so-called clawback that people referred to. He was a financial counsellor in the service and he himself was unaware of it. It just shows you that somewhere, wherever this was in your documentation in the past, it certainly wasn't very clear when your own counsellors were not preparing people for that change and that reduction. So it's a significant part.

I realize we can't hold everybody's hand and people have a responsibility, but pensions are extremely complicated, as I am learning in some of the work I'm doing as a critic. So it is difficult, and it's up to people to get better educated, but the disabled part is what gives me the biggest concern. I do hope that somewhere, whether it's through this committee or through another source, we're able to get this issue a bit better coordinated so the disabled are not the ones who end up being in more difficulty than they currently are.

I think my colleague has a question.

[Michael Cape]

I will just make one comment about what we are doing in terms of these members who are cut.

The RCMP values those members who have been injured in the course of their work. It's a difficult situation for them to go on when they have built their career around being a police officer and all of a sudden they can't do it any more or they're restricted from doing the kind of job they want to do. So the organization is always looking at ways to re-address those questions, and have we done enough, or are there things we could do that we should have done? It's an open dialogue that's ongoing, and the lessons we've learned from sessions such as this will go back to our executive committee and the dialogue will be generated in terms of this group.

So is it a forgotten thing? No, it's not; it's an ongoing dialogue.

[Judy Sgro, Liberal, York West, ON]

Thank you.

[Scott Andrews, Liberal, Avalon, NL]

I have a question on the EI, following what Mr. Hawn was saying. We know about the maternity benefits. Excluding that--or including it if you could break it out--what percentage of the Canadian Forces and the RCMP actually benefit from the EI fund? Do you have a percentage or a ballpark figure as to what percentage would use that fund? It has been said we'll use the fund to pay for this. I'd like to know what percentage are using the fund.

[Lynne McKenna-Fleming]

I'm sorry, I couldn't tell you.

EI is a completely different department, and if you're taking EI, by definition you're no longer working with the Department of National Defence. Other than for parental leave, there is no reason for the department to even be aware.

[The Chair, Conservative, David Sweet]

Thank you very much.

We'll now go back over to the Conservative Party for five minutes.

Mr. Hawn.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you, Mr. Chair.

There are a couple of points that fell out of questioning. There is no question that disability is an issue that should be addressed, absolutely, but bridging and disability are two totally separate issues. The amount of bridge benefit is approximately, ballpark, 30% of what a person collects as pension. That's the part that disappears when CPP kicks in. The total benefit, instead of coming from one source, the CFSA, now comes from two sources: CFSA and CPP. The member is paid the same dollar for his pension, regardless. It's just that the source has changed from one source to two sources at age 65.

Is that a fair statement, Mr. Cape?

[Michael Cape]

That's correct.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you.

In answer to the question, about 5% of the Canadian Forces collect EI benefits every year, and those are the 3,000 or so who collect maternity or parental leave, divided by the 60,000 members. That doesn't include the number of CF members who retire. Approximately half of CF members get out of the forces without a pension, so if they qualify under other criteria, they are eligible to collect EI. So it's a relatively high percentage, I would suggest, who are eligible.

Is that a fair statement, Ms. McKenna-Fleming?

[Lynne McKenna-Fleming]

Yes. That would seem to be the case.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

We collect $56 million a year in EI contributions from members of the Canadian Forces; I don't know about the RCMP. The cost of this annually is $110 million. So is it fair to say that even if we did redirect the EI payments to this, we would take away the EI benefits from the Canadian Forces members who now receive it and it wouldn't be cost neutral in any event anyway? Is that a fair statement?

[Lynne McKenna-Fleming]

Yes. That would seem to be a fair statement.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you.

With respect to counselling, when people leave the Canadian Forces.... You know, Mr. Labelle was a counsellor, and that's great; those people do good work. In the handbook--that is one of his tools, the Canadian Forces retirement handbook--it clearly states in there...I can't remember the page number and the quote, but I did quote it the last time I was here. It clearly states that that reduction is going to take place from the CFSA at age 65. So why he would not have included that in his financial counselling, I don't know, but it's clearly there.

To get back to what we talked about and to re-emphasize, I guess, going forward.... Granted, it was poorly briefed, and that's just a fact; that's history now. Are you satisfied, both from the point of view of the RCMP and the Canadian Forces, that the measures you put in place with respect to websites and the annual letters--hopefully, people read stuff that comes in the mail about their pensions as they're approaching 65--will make a difference, and other things we might be able to do that would plant it on their forehead, so to speak, to make them understand what's happening and the fact that their pension is not decreasing, it is merely going from one source to two?

[Lynne McKenna-Fleming]

I would say that we're doing a fair job right now. As I said, it was all part of a project to improve the communication of pension issues to members and pensioners. I think at bottom, the only way to be certain that you got your message into the head of someone else is to sit across from them. Even then, you can't guarantee they will have understood what you have told them. Clearly, we don't have the resources to have one-on-one briefings with every pensioner and with every CF member, but what we can do, we have done. But as I said, if folks have new and better ideas, I'm open to suggestions.

[Michael Cape]

It's the same thing. We believe we have gone a long way in terms of improving our communications on the issue. Lessons will be learned as we go along; maybe we'll be able to do things better.

The other thing we've learned, and we encourage our members to do it, is to always get an independent financial advisor to talk to them about this. We're giving them our information, but we urge them to have someone coach them in terms of their personal situation and finances.