Fed Budget Office estimate for proposed survivor benefit scheme

[The Bread Guy]

This, from this new report (also attached as PDF):

Upon the death of a contributing member of the Regular Canadian Forces (CF), certain members of the Reserve Forces, as well as members of the Royal Canadian Mounted Police (RCMP), who at the time of death were entitled to an annuity or an annual allowance, the survivor and children of these contributing members are eligible for an immediate annual allowance.

The purpose of this enactment is to increase the allowance given to the survivors and children of CF or RCMP contributors from 50% to 70% of the contributor’s annuity or allowance.

The changes proposed by Bill C-261 will results in an incremental increased pension liability of $5.046 billion for the regular CF pension plan, $7 million for the Reserves CF pension plan, and $1.32 billion for the RCMP pension plan. The annual servicing costs will increase by $112.55 million for the regular CF pension plan, $910,000 for the reserves CF pension plan, and $39 million for the RCMP pension plan.

This just covers how much more increased survivor benefits would be, not pensions for the wounded.

More from CBC.ca here.

 

[dapaterson]

This is part of the VAC minister's mandate letter, as well.

 

[Lightguns]

Paying those increased premiums will put a tidy little dent in the pay cheques of all future troops. 

 

[McG]

This is part of the VAC minister's mandate letter, as well.

But it is brought by an NDP private member's bill, so there is a good chance that it will go nowhere.
I believe the bit highlighted in yellow is a particularly relevant argument to this and many other family support programs that need improvement in the CAF.

Raising benefits for military, RCMP families would add $6B liability: PBO
The Canadian Press
Published at CTV News
Wednesday, August 17, 2016 3:51PM EDT

OTTAWA -- A new analysis says an NDP proposal to boost pension benefits for families of deceased Canadian Forces and RCMP veterans could hurt Ottawa's bottom line by more than $6 billion.

The NDP private member's bill calls for raising retirement benefit payments to surviving spouses and children to 70 per cent of a contributor's annual allowance from the current level of 50 per cent.

The federal budget watchdog estimates such a change could create an additional pension liability of nearly $6.4 billion for the government.

The budget office says that Treasury Board policy indicates the entire liability would hit Ottawa's books, net of any surplus in the account -- all in the year the change is approved.

The parliamentary budget office also estimates the proposed legislation would create an annual service cost of $152 million for the federal government.

The private member's bill was introduced in April by New Democrat MP Irene Mathyssen. It has passed the first-reading stage, but opposition proposals typically have little chance of being adopted.

"It is important that supports remain in place for the spouse and family after the veteran passes away," Mathyssen said in the House of Commons in April.

"Many veterans' spouses are forced to give up their own careers to support the veteran during the veteran's service when they are moved from city to city, making it difficult for the spouse to establish a career. Or a spouse may give up work to care for an injured veteran."

Taking a closer look at the numbers, the budget office says the proposed changes would increase pension liability by about $5 billion for the regular Canadian Forces pension plan and by about $1.3 billion for the Mounties' pension plan.   

http://www.ctvnews.ca/politics/raising-benefits-for-military-rcmp-families-would-add-6b-liability-pbo-1.3032802

 

[PuckChaser]

Paying those increased premiums will put a tidy little dent in the pay cheques of all future troops.

Already getting nice little dents every year to bring us up to a fair 50/50 split.

You're absolutely right though, best of intentions will always get the buck passed down to the rate payer.

 

[dapaterson]

According to PBO, the increase would be $150m per year, CA and RCMP combined, funded by the government (on top of the one time $6.3b cost).

One way to reduce the cost would be to go to a 66 2/3% rate instead to remain withing Income Tax act restrictions.  Unfortunately,  PBO did not cost that option.