Health premiums for retired civil servants to double under new agreement

OTTAWA – Retired federal public servants will be required to pay more toward their health benefits under a deal announced today in Ottawa.

Under an agreement with public sector unions, premiums paid by retirees for those benefits will double for all but those with the lowest incomes.

Treasurey Board President Tony Clement says both sides made compromises to reach the deal.

But at least one union says it has little choice to give into most of the federal government’s demands, which it says were made under threat of legislation.

Currently, retired civil servants pay 25 per cent of their health premiums while taxpayers pay 75 per cent.

Under the new agreement, premiums will be paid under a 50-50 formula.

Clement says the deal means savings for the federal government of $6.7 billion over six years.

The new cost-sharing formula will be phased in over a four-year period.

Clement says low-income pensioners will not be subject to the 50-50 funding formula, and the plan’s annual deductible is also being eliminated.

As well, civil servants will be required to obtain six years of pensionable service to be eligible for the benefits, up from the current two years.

Green party Leader Elizabeth May says the agreement is bad for seniors who are already struggling to survive on fixed incomes.