Earlier this week, the Ontario government announced that it would be making changes to its post-retirement benefit program in order to “bring the Ontario Public Service retiree benefits in line with other public sector organizations”.
First, the government intends to increase the eligibility period for retiree benefits. Members who do not have 10 years of pension credit as of January 1, 2017 – in either the Public Service Pension Plan or the OPSEU Pension Plan – will have to meet the following criteria in order to qualify for retiree benefits:
- have at least 20 years of pension credit; and
- retire to an immediate unreduced pension.
Second, the government will be moving to a “premium cost sharing” arrangement, whereby any eligible member who has not begun to receive a pension by January 1, 2017 will be required to pay 50% of the premium costs to participate in the retiree benefit plan.
None of these changes will affect current OPS retirees.
Only last week, I wrote a blog post about a similar announcement in the 2014 federal budget. The federal government stated that it will be transitioning from currently paying 75% of retiree benefit costs under the Public Service Health Care Plan to equal cost sharing for retired federal employees.
Clearly, Canadian governments have set their sights on public sector employee compensation as a part of their ongoing attempts to reduce budget deficits. Public sector unions, however, have responded they may not accept such changes and will seek legal advice on whether the government can make them unilaterally.