The Public-Sector Pension Bubble: Time to Confront the Unmeasured Cost of Ottawa's Pensions
AbstractFair-value accounting reveals Ottawa’s employee pension obligations to be larger and more volatile than official figures, a problem shared by European and US state governments. This exposes taxpayers to an unmeasured $65 billion funding shortfall. To keep pace with benefit accruals and stop the gap from growing, contributions in the latest fiscal year would have had to be almost double what was actually paid in. Taxpayers risk finding that the responsibility to back-fill the funding hole falls to them – and potentially finding that fears of sovereign defaults by governments with opaque balance sheets and big exposure to public employee pensions will drive up the cost of borrowing.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.D. Howe Institute in its series e-briefs with number 108.
Length: 6 pages
Date of creation: Nov 2010
Date of revision:
Publication status: Published on the C.D. Howe Institute website, November 2010
Pension Papers; fair-value accounting; Canadian public-sector pensions; defined-benefit (DB) plans;
Find related papers by JEL classification:
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
This paper has been announced in the following NEP Reports:
- NEP-ACC-2010-12-11 (Accounting & Auditing)
- NEP-AGE-2010-12-11 (Economics of Ageing)
- NEP-ALL-2010-12-11 (All new papers)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Angelo Melino, 2011. "Moving Monetary Policy Forward: Why Small Steps - and a Lower Inflation Target - Make Sense for the Bank of Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 319, January.
- William B.P. Robson & Alexandre Laurin, 2012. "Federal Employee Pension Reforms: First Steps - on a Much Longer Journey," e-briefs 140, C.D. Howe Institute.
- Colin Busby & William B.P. Robson, 2011. "Impulse Spending: Canada's 2011 Fiscal Accountability Rankings," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 142, September.
- Alexandre Laurin & William B.P. Robson, 2011. "A Faster Track to Fiscal Balance: The 2011 Shadow Budget," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 320, February.
- James P. Bruce, 2011. "Protecting Groundwater: The Invisible and Vital Resource," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 136, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristine Gray).
If references are entirely missing, you can add them using this form.