Public-sector pensions cost taxpayers more than acknowledged, benefiting employees unfairly.
Public-sector pension plans in Canada are well-managed but undervalue the cost of guarantees, leading to understated pension costs. This results in public-sector employees receiving higher compensation than acknowledged, tax benefits, and taxpayers bearing investment risks without fair compensation. Private-sector pension standards differ, recognizing future risks and rewards. The solution proposed is to transfer risks to plan members to address the wealth transfer from future taxpayers to current plan members.