Quote:
Originally Posted by whitev70r
Is that how pension works for unions/public sector jobs?
I'm used to company contribute 5% of your salary and you contribute 5%, as long as you work there. It goes into Pension plan like Canada Life and then whatever it accumulates to when you retire (hopefully, a consistent 8-10% return annually), that's your pot of gold to live off from.
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I think most public sector employees at the municipal and provincial level (in BC) are covered under
Municipal Pension Plan, or something equivalent to it. Generally speaking, MPP (and its equivalent plans) is considered to be the gold standard of all pension plans available in Canada because it is a
defined benefits pension plan, meaning you know how much your pension payments are gonna be when you retire.
Most plan members pay 8.x% into the pension funds while they are working, and the employer pays a little more than that to cover additional expenses for the pension plan company.
(More details can be
found here.)
It seems to me that the pension plan you are familiar with is a
defined contribution plan where the contribution amount is fixed, but the pension payout amount is not guaranteed.