Letter to Liz Sandals re: post-retirement benefits

September 29, 2016

Via email: sandals.mpp@liberal.ola.org

The Honourable Liz Sandals
President of the Treasury Board
Treasury Board Secretariat

Room 4320, 4th Floor, Whitney Block
99 Wellesley Street West
Toronto, Ontario  M7A 1W3

Re: Fairness for retirees

Dear Ms. Sandals:

More than two-and-a-half years ago, your government announced a plan to require public employees whose pension is managed by the OPSEU Pension Trust (OPTrust) or the Public Service Pension Plan (PSPP) to begin paying half the cost of the premiums for their post-retirement insured benefits.

Beginning January 1, 2017, this will mean an extra cost of about $900 per year for single individuals, assuming they are able to pay it. For retirees with family coverage, the extra cost will be on the order of $1,600 per year.

This is a lot of money for our retirees. In 2015, the average pension of an OPTrust member was under $21,000. You are asking my members to pay anywhere from four per cent to nearly eight per cent of their pension income for something they had believed for decades was already theirs.

This is not the first time I have said this, but I will say it again: your plan is blatantly unfair.

OPSEU members who began working in the Ontario Public Service, the LCBO, and other agencies of the government did so with the understanding that retiree benefits were a part of their overall compensation. For a government led by a Premier who has expressed so much concern about the plight of seniors and retirees to turn around and effectively cut their pensions is disgraceful. At no time before 2014 did your government suggest that PRB were at risk. When you did make your announcement, it was presented as an unchangeable fait accompli.

In 2014, we told the government that this attack on benefits would lead to a mass exodus of staff at a time when most public-sector workplaces have already been cut to the bone. Sadly, our prediction has come true. Since 2014, thousands of members of OPTrust and the Public Service Pension Plan members have left their jobs – many of them ahead of schedule – in order to avoid the financial hit your government has aimed at them. It’s not hard to see why. So if this ham-fisted plan was actually a well thought out, obvious attack on the OPS, mission accomplished.

There was a time when the Government of Ontario considered itself a model employer. The promise of insured benefits in retirement was part of a covenant between government and the employees of the public service, the LCBO, and other agencies. Now, you’ve broken that covenant.

The victims of this betrayal are mostly women, as you know: two-thirds of all public employees are female, and women still tend to live longer than men. They are mostly people who, despite having worked hard all their lives, don’t have a lot of income. And my members, whose retirement income is substantially below that of the high earners in the PSPP, are incensed at your government’s move to make lower-income retirees pay the same high premiums as retired top managers. Your plan is, simply, regressive – which runs counter to your government’s claim to being the opposite.

Of course, many OPTrust members may simply decide that the cost of the premiums is too high, given their modest incomes. When that happens, they will simply be without benefits. Rather than absorbing half the cost of your plan, they will absorb it all. I can assure you that those OPTrust members who find they cannot afford the benefits they need in retirement will be thinking of you and your Retirement Premier.

The end of the year is fast approaching, but there is still time to change course on this decision. If your government is really interested in trying a progressive approach in the run-up to the next election, you will rescind this decision immediately.

I am requesting a meeting as soon as possible.

I look forward to hearing that you and your government are listening.


Warren (Smokey) Thomas
President, Ontario Public Service Employees Union