Mr. Speaker, it is indeed a pleasure to have the opportunity today to speak to this motion. I will be splitting my time with the member for Beauport—Limoilou.
I would like to respond to the motion by stating that the federal government and all Canadians recognize the dangerous demands imposed on the members of the Canadian Forces. We want to recognize the commitment and certainly the responsibility and the contribution that these veterans have made and continue to make to our great country and around the world.
That is why, in recognition of their unique needs, a comprehensive program of pensions and benefits is provided to ensure a generous level of protection to the members of the Canadian Forces and their families. These benefits include life insurance, disability, pension plan benefits in their retirement or in the event of disability or death.
The President of the Treasury Board is the minister responsible for the financing and the funding of the Canadian Forces pension plan as well as other federal public sector pensions, including those of the public service and the Royal Canadian Mounted Police. In light of that, he wishes to reassure the Canadian Forces, RCMP and all federal public service employees and pensioners that they benefit from a complete package of pensions and benefits for themselves and their survivors.
Even though the federal public service offers comprehensive pensions and benefits to all employees and pensioners, there are always demands for improvement to these benefits, as is the case of today's motion proposed by the hon. member for Sackville—Eastern Shore.
SISIP, the service income security insurance plan, provides an income replacement benefit regardless of whether a member is injured in the line of duty or not. In the past, SISIP benefits were reduced to offset the benefit paid under the Pension Act. This changed on April 1, 2006 when the new veterans charter came into effect. The Pension Act benefit is now paid as a lump sum amount which is no longer deducted from the SISIP benefit.
I would like to comment briefly on the pension plan that is available to members of the Canadian Forces as well as other federal public service employees, including members of the public service and the RCMP. The federal public service pension plan contains many features which are comparable with or superior to other employer sponsored pension plans within this great country of Canada.
Members of the Canadian Forces and the RCMP further enjoy early retirement provisions in order to recognize the fact that they often have shorter careers due to the more dangerous and physically demanding nature of their jobs.
It is important to remember also that the pension benefits for federal public service employees and pensioners are not at risk since the federal public service pension plans are defined benefit plans. This means that in exchange for their contributions, federal public service members acquire the right to a defined amount of pension at retirement.
This differs from defined contribution pension schemes where the final entitlement is directly dependent on employee contributions, employer contributions and investment returns. In other words, federal employees and retirees can continue to rely on receiving what their public service pension plans have promised: a defined, guaranteed, fully indexed retirement income.
In addressing today's motion to change the Canadian Forces pensions and benefits, it is important to fully understand the existing provisions of these programs. One particular provision of the public service pension plans which may not be well understood is the coordination feature with the Canada pension plan. In other words, the reduction to the Canadian Forces or RCMP pensions at age 65.
In 1966, when the Canada pension plan was introduced, the federal government of the day decided to coordinate the new CPP with the federal public service pension plans. Like most other Canadian public sector pension plans which were coordinated with the CPP, the federal government was concerned that some of their employees would be forced to contribute too much to their retirement savings if they had to contribute to the Canada pension plan in addition to the contributions already made to their employer sponsored pension plan.
This means that while federal public service employees of the public service, Canadian Forces and the RCMP pension plans are working, they are making contributions to their public service pension plans and to the CPP.
Typically, at age 65, public service pension plan members will be entitled to an unreduced Canada pension and, as a result, their public pension will be reduced to take into account the payment of the Canada pension. The amount of the reduction to the public service pension is approximately equal or equivalent to the amount the plan member receives from the CPP.
In other words, the total pension amount available to plan members after age 65 is essentially unchanged. It is simply received from two sources, from the Canada pension plan and the public service pension plan. This is a very common design feature in most Canada employer sponsored plans.
The federal public service pension also provides survivor benefits which are generous by industry standards. Although survivor benefits under the federal public service pension plans are generally described as being 50%, this does not provide the full picture. The benefit formula in the federal public service plans provides for a surviving spouse's allowance equal to 50% of the unreduced pension available to the member, as opposed to the 60% of a pension that may have been reduced to take into account a survivor's benefit.
As well, there are many instances where a member has chosen to retire early and has opted to receive a reduced pension. In such cases, the survivor's allowance will be more than what the plan member was entitled to receive. The 50% of an unreduced pension is often more generous than 60% of a reduced pension.
When considering the benefits payable to survivors under the federal public service plans, it should also be noted that these allowances are indexed to fully reflect increases in the cost of living since the member's retirement.
Therefore, all factors considered, survivor benefits currently provided under the federal public service plans are already, in a number of ways, more generous than benefits provided under many other Canadian employer sponsored pension plans, both in the public and the private sector.
Improvements to the survivor benefit provisions in the federal public service pension plans have been made in response to complaints involving spouses who marry after age 60. This has been referred to earlier. In 1992, both Canadian Forces and RCMP plans were amended to give pension plan members flexibility in their ability to provide protection for their spouses who they marry after age 60.
Pensioners under both plans now have an opportunity to elect to reduce the amount of their benefit in order to provide a pension for a surviving spouse who would not otherwise be entitled to a survivor's allowance.
We must remember that when determining pension arrangements for its employees, it is reasonable and responsible for an employer to consider the costs involved. This is especially true for the federal government as the employer, given that it is the taxpayers of Canada who must fund the plan.
Today's proposed changes to the Canadian Forces plans would not only increase the costs, but further place the burden of those additional costs on taxpayers. Other public service plans, namely the public service and the RCMP plans, contain similar provisions to the Canadian Forces plan so there would be significant pressure also to amend these plans.
In considering any changes to the public service pension plans, the federal government as an employer must always be mindful of the long term sustainability of the plans as well to remain fair to both the federal public service employees, including the RCMP and veterans, and to all Canadians as taxpayers.