Federal Budget 2014 Includes Pension Changes For Public Sector Employees

Yesterday's federal budget demonstrates that, like many of its provincial counterparts, the federal government is looking for cost savings in its employees' compensation arrangements.

Federal Budget

In an effort to ensure that "public service employee compensation is reasonable and affordable, as well as aligned with that offered by other public and private employers", the federal government announced the following proposed changes to its employees' compensation and benefits:

• implementing a new disability and sick leave management system, including the introduction of a formal short-term disability plan;
• transitioning from currently paying 75% of retiree benefit costs under the Public Service Health Care Plan (PSHCP) to equal cost sharing for retired federal employees; and