{"id":286242,"date":"2025-11-15T13:36:10","date_gmt":"2025-11-15T13:36:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/286242\/"},"modified":"2025-11-15T13:36:10","modified_gmt":"2025-11-15T13:36:10","slug":"unions-warn-federal-budget-proposal-could-lead-to-pension-cuts-for-government-workers","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/286242\/","title":{"rendered":"Unions warn federal budget proposal could lead to pension cuts for government workers"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

The Canadian Union of Public Employees said it\u2019s concerned the federal government is going to reduce the pension benefits federal workers earn through their workplace plans.Keito Newman\/The Globe and Mail<\/p>\n

Unions are calling for clarity on the federal budget<\/a>\u2019s proposed plan to reform retirement benefits and raising concerns that it may lead to pension cuts for thousands of federal workers. <\/p>\n

In a section on public-sector retirement benefits in the 2025 budget, the Liberal government said that recent enhancements to the Canada Pension Plan and the Quebec Pension Plan \u201cled federal employees and the government to contribute more than needed to maintain existing pension benefits.\u201d<\/p>\n

In response, the government said in the budget it would initiate consultations to \u201caccount for CPP and QPP enhancements and ensure that federal employees continue to receive the same pension benefits, without overcontributing.\u201d It projects $384-million in savings once the proposed change is in place.<\/p>\n

The Canadian Union of Public Employees, which represents more than 1,000 federal workers across the country, calls the budget\u2019s language \u201cmisleading,\u201d in a statement on Wednesday. The union said it\u2019s concerned that the government may reduce the pension benefits federal workers earn through their workplace plans, effectively cancelling out the gains recently made through the expansion of CPP and QPP benefits. <\/p>\n

Our readers\u2019 biggest questions about the federal budget, answered<\/a><\/p>\n

When The Globe contacted the Department of Finance on Thursday to comment on this proposal, it referred questions to the Treasury Board of Canada Secretariat. A spokesperson from the Treasury Board of Canada Secretariat said it would not have further information until the budget is adopted and pointed to a federal website<\/a> on the topic. <\/p>\n

Federal government workers earn their pension income from a combination of the CPP or QPP and their public-sector pension. Traditionally, those benefits are designed to add up to 2 per cent of a worker\u2019s average salary for every year of service. <\/p>\n

But according to the notice on the federal government\u2019s website, public-sector pension plans were not \u201cadjusted\u201d when Ottawa gradually expanded CPP and QPP retirement benefits for working-age Canadians between 2019 and 2025.<\/p>\n

\u201cIf everything stayed the same, [federal] workers would receive a bigger pension,\u201d said James Harnum, a pension lawyer and partner at Koskie Minsky LLP.<\/p>\n

The website states the government intends to introduce changes that would \u201creduce public sector pension contributions for both you and the Government and would have no impact on CPP\/QPP contributions.\u201d It said that would \u201creturn\u201d the combined pension benefits to 2 per cent. <\/p>\n

But neither it nor the federal budget explicitly mention coming pension benefit cuts for federal civil servants.<\/p>\n

On the government website, it says that if legislative amendments are passed, employees would then see a \u201creduction in their public sector pension contribution on their pay stub.\u201d<\/p>\n

Federal budget 2025: Eight ways the budget affects your wallet, from vacant homes to student loans<\/a><\/p>\n

The proposed change comes amid the Carney government\u2019s plan to cut 40,000 public service jobs<\/a> from a peak in 2024 over five years as it seeks to find nearly $60-billion in internal savings.<\/p>\n

Union officials argue that the only way to bring the total benefit back down to 2 per cent is to reduce the pensions earned under federal workplace pension plans by the same amount that CPP\/QPP has grown. CUPE estimates the reduction could be in the range of 10 per cent to 15 per cent of the basic rate at which pension is earned going forward, though the government has not provided any figures. <\/p>\n

\u201cWe are concerned that the described \u2018overcontribution\u2019 will result in a wrongful clawback of the hard-earned pension benefits of public service workers,\u201d said Sharon DeSousa, Public Service Alliance of Canada National president, in a statement to The Globe on Thursday.<\/p>\n

She added that this, combined with job cuts and other labour changes in the budget, \u201craises red flags about this government\u2019s treatment of workers.\u201d The Union of Canadian Correctional Officers called the proposal a \u201cdisguised cut\u201d in a statement Wednesday.<\/p>\n

While the budget commits to consultations with stakeholders, the government has not indicated that changes would be negotiated with unions at the bargaining table. Pension benefit levels are normally treated as part of total compensation and are subject to collective bargaining.<\/p>\n

In the budget, it said the new proposal would save federal employees up to $1,100 in annual pension contributions, while \u201cmaintaining their pension benefit levels.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: The Canadian Union of Public Employees said it\u2019s concerned the federal government is…\n","protected":false},"author":2,"featured_media":286243,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185,4825],"class_list":{"0":"post-286242","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance","14":"tag-r-fp"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/286242","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=286242"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/286242\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/286243"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=286242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=286242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=286242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}