IAFF Participates in Canadian Government Pension Consultation

The IAFF has taken advantage of a new federal consultation on Canada’s pension retirement systems to emphasize the need for flexibility in rules and proposed rule changes that would affect fire fighters’ Registered Pension Plans (RPPs) and Canada Pension Plan (CPP) benefits.

The IAFF submission, which was submitted to the federal Finance Ministry May 14, reiterates the IAFF’s existing position on CPP reform, that due to the dangerous nature of the profession and the unique nature of retirements, professional fire fighters should have access to reduced CPP benefits at age 55 and unreduced CPP benefits at age 60, which is five years earlier than other workers.

This would assist fire fighters, who are identified as members of a public safety occupation in the Income Tax Act regulations and, therefore, permitted to retire early, to make up for the resulting loss in retirement income and in a typical scenario allow them to achieve the benchmark of 70 per cent of pre-retirement income in retirement.

Importantly, in recognition of the unique nature of fire fighter retirements and the fact that fire fighters belong to many different types of pension plans throughout Canada, the submission emphasizes the dangers of applying mandatory changes to the Canada Pension Plan.

The CPP currently provides a maximum monthly pension of $908.75 ($10,905 annually) based on annual contributions of $2,118.60 for a worker making the maximum CPP-pensionable earnings of $43,600 or more. Virtually all professional fire fighters would qualify for maximum CPP benefits based on current salary levels. The average monthly benefit among all Canadian retirees in March 2009 was $501.57.

Some groups have proposed increasing or even doubling CPP contributions and, consequently, benefits in order to make the CPP a more significant source of retirement income for Canadians.

The IAFF submission asserts that this should be strictly optional, thus allowing those overseeing individual Registered Pension Plans, many of which are integrated with the CPP, to decide whether increasing CPP contributions and benefits would benefit plan members or not and act accordingly.

The May 2010 submission follows on the heels of a July, 2009 submission made by the IAFF Canadian Office to the federal Finance Ministry as part of a consultation on proposed amendments to the CPP which were announced in May 2009.

Click here to see the IAFF's May 2010 Submission to Finance Canada on Retirement Systems.

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