Saskatchewan Party Government Will Plead 'Poverty' To Lower Expectations On Their Election Promises
Saskatchewan’s new right wing government will attempt today to portray the province as having serious financial difficulties in spite of a record surplus. Why will they do this? For one, the Saskatchewan Party has made so many financial commitments and have promised so much, 'the chickens have come home to roost' and they need to minimize expectations that they themselves have raised.
As a result, in spite of a massive surplus this year, they need to convince their voting base in rural Saskatchewan that they cannot afford to do all that they promised. They will achieve this by pumping up a note in the Provincial Auditors recent reports concerning ‘unfunded pension liabilities’. For those whose eyes glaze over at the mere mention of an auditors report, hang on, I will make this easy.
Saskatchewan has a civil service. All civil servants pay into a pension plan. In 1979, the government created a ‘New’ pension plan where employee contributions and matching contributions from the government employer, were set aside to accrue interest and provide a fund from which to pay out pensions to retired civil servants.
Employees prior to 1979 simply had their pension contributions placed in the province's general revenue fund (Consolidated Fund) and pension entitlements were paid out from the same fund. This pool of aging civil servants in the old plan had the option of going to the new plan in 1979. Many did and many did not. The policy of the Blakeney, Devine, Romanow and Calvert governments was that eventually all old plan employees will have retired off and the remaining civil service will all be in the new plan.
During their years in opposition, the Saskatchewan Party insisted on taking the valuation of the ‘old plan’ liabilities and wanted that amount to be treated as ‘debt’. They insisted that the government should put money into a fund now to pay out all future pension liabilities of the ‘old plan’ obligation. This is nonsense but it's what Premier Brad Wall will try to spin into a financial ‘crisis’ to lower expectations that rural Saskatchewan has to have billions spent in sparsely populated areas of the province.
We will see what the Saskatchewan Party government has up its sleeve later today. Buckdog will update this post at that time.
As a result, in spite of a massive surplus this year, they need to convince their voting base in rural Saskatchewan that they cannot afford to do all that they promised. They will achieve this by pumping up a note in the Provincial Auditors recent reports concerning ‘unfunded pension liabilities’. For those whose eyes glaze over at the mere mention of an auditors report, hang on, I will make this easy.
Saskatchewan has a civil service. All civil servants pay into a pension plan. In 1979, the government created a ‘New’ pension plan where employee contributions and matching contributions from the government employer, were set aside to accrue interest and provide a fund from which to pay out pensions to retired civil servants.
Employees prior to 1979 simply had their pension contributions placed in the province's general revenue fund (Consolidated Fund) and pension entitlements were paid out from the same fund. This pool of aging civil servants in the old plan had the option of going to the new plan in 1979. Many did and many did not. The policy of the Blakeney, Devine, Romanow and Calvert governments was that eventually all old plan employees will have retired off and the remaining civil service will all be in the new plan.
During their years in opposition, the Saskatchewan Party insisted on taking the valuation of the ‘old plan’ liabilities and wanted that amount to be treated as ‘debt’. They insisted that the government should put money into a fund now to pay out all future pension liabilities of the ‘old plan’ obligation. This is nonsense but it's what Premier Brad Wall will try to spin into a financial ‘crisis’ to lower expectations that rural Saskatchewan has to have billions spent in sparsely populated areas of the province.
We will see what the Saskatchewan Party government has up its sleeve later today. Buckdog will update this post at that time.
It isn't nonsense. It's illegal now for companies to do what the gov't is doing.
When I contribute to my pension it doesn't go to my employer, it goes to a pension fund. Not the companies operating profit to be spent on whatever whim they feel.
If they were to do that, the company _would owe me_ my contribution, their contribution and the interest that would have accumulated.
By not putting the money away for the pensioners the gov't owes all three aspects to the pensioners. In most languages we call that 'debt'.
We're going through the baby-boomer retirement cycle now and all those unfunded pensions are going to kill our operating capital because we never made allowances to separate the employees money of revenues.
We all know what the Dippers did with revenue . . . spent every dime.
Cheers,
lance
Posted by
lance |
10:30 am, November 29, 2007
err, "separate the employees money _out_ of revenues."
Posted by
lance |
10:31 am, November 29, 2007
"We all know what the Dippers did with revenue . . . spent every dime."
Spent it on what ... did the government NOT pay pension entitlement to ALL pensioners in the old plan??? YES they did ... you are trying to twist it to make it seem that the employees in the old plan had their pension contributions go to the General Revenue Fund and got NOTHING out of it! Nonsense! In most years, more was paid out of the GRF to old plan pensioners then was paid in!
This is an INVENTED financial crisis - it is a risky political ploy by Wall and he is going to get his ass spanked for it.
Back in 1979, it would have been simple to have FORCED all civil servants to move to the new plan. At that time, the Conservative opposition AND the Sask Gov't Employees Union fought hard to allow the pre-1979 employees to have the OPTION of going into the new plan or staying with the old plan. Many did what you advocate they should have, they moved to the new plan. But many did not want to go to the new plan and opted to stay in the old plan.
Posted by
leftdog |
10:42 am, November 29, 2007
No where did I say pensioners weren't paid.
They're payments though, comes out of GR though and that makes it a liability. Funny how it isn't listed as such on the books, though, eh?
Like I said, most languages call that debt.
If in fact, this is the 'stark' in Brad's address, good on him for having a gov't that finally realizes that it owes the pensioners and will ensure Saskatchewan can afford to pay them their due.
Cheers,
lance
Posted by
lance |
10:57 am, November 29, 2007
lance ... see my update ... looks like Wall's whole phony and contrived financial 'crisis' is an excuse to engage in massive government cutbacks! Should I be surprised? I trust Mr. Wall as far as I could pick him up and throw him.
Posted by
leftdog |
11:01 am, November 29, 2007