At first glance, the gold-standard pensions that most government employees get makes them slightly less attractive because the pension adjustment reduces how much they can invest in their RRSP.
“Governments must move toward greater reliance on defined contribution plans or shared risk models rather than defined benefit pension plans which are far more expensive to maintain and much more Opaque,” says the CFIB. “Retaining defined benefit plans for existing employees and setting up defined contribution plans for new employees is a common way private sector employers have chosen to act.”
Just as in the private sector, the writing is on the wall.
Eventually, retirement savings between the two groups will be treated equally, at which point the differentiator becomes one of salary. Excluding benefits, the gap between public and private sector workers drops to around 10 percent.
Public sector workers are certainly attractive prospects but the gap in the future looks to go away as governments reign in those costs.
Taxpayers can only hope.