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Canada Post pensions at risk?

Canada Post pensions at riskOur last post about Canada post summarize the changes that they are planning to make. Canada Post pensions at risk in an effort to reduce their debt load and to reduce their operating loss. In summary they will be reducing 8008 positions and increasing the cost of the postage stamp to one dollar. They also plan on introducing community mailboxes in urban areas which previously had door-to-door service. All of this is aimed at a eliminating the operations loss or at the minimum reducing it significantly so that there is less burden on taxpayers.

This post is questioning the pension commitment by Canada Post to its pensioners. Whether they will be able to fund the Canada Post pension into the future? Will pensioners from Canada Post have to take a haircut in order to keep the pension system solvent?

Canada Post pensions at Risk – Precedents

While there is no precedent for post office system reducing their pensions to their pensioners at this time, there is a precedent for city and state governments in the United States having taken this action to reduce the pension payouts to their pensioners. This specifically has occurred in states or cities that have had to declare bankruptcy.

It will be many years before Canada post reaches this position. This will be a question of the Canadian government deciding not to prop up the Canada Post pension system. There will be a lot of discussion in the next 5 to 10 years about Canada post pensions how much they are and whether they should be sustained.

If you are a pensioner with Canada post and expect to collect your pension over the next 5 to 10 years we suggest that you plan for a decrease in your pension and funding. Do this to ensure the quality of life that you would prefer to have during your retirement years. If it does not happen then it’s a bonus and you’re way ahead of the game. If it does happen you’re prepared!

Many people might feel that this will never happen. It is better to be prepared and planning for such a pension calamity versus not to be ready for such a disruptive pension issue. For more posts about future trends, click here.

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