The Ontario government is working with the broader public sector to manage compensation growth by consulting on a new benefits pooling model for broader public sector (BPS) participants.
During recent consultations with the BPS about how to achieve reasonable public sector compensation growth, both employers and bargaining agents expressed an interest in exploring a centralized benefits pooling model. According to estimates, a fully-realized pooling of benefits model in the public sector could realize up to $115 million in savings by accessing economies of scale, driving cost savings and identifying administrative efficiencies, says the government.
“We have consulted with the broader public sector in good-faith and have considered all ideas that have been put on the table,” says Peter Bethlenfalvy, president of the Treasury Board. “With public sector compensation representing approximately half of all spending, the government is working collaboratively with employers and bargaining agents to protect front-line services, public sector jobs and make Ontario fiscally sustainable.”
Consultations will find common objectives, define participant parameters, and develop a viable governance framework and strategy for implementation. Participation in any arrangement would be voluntary, says the government.
Through benefits pooling, government can address inefficiencies and duplication and make it easier to leverage group buying power, says the government.
Public sector compensation represents roughly half of all government expenditures, totaling $72 billion annually, says the government.
The government consulted with public sector employers and bargaining agents in spring and summer 2019 to explore how compensation growth can be managed in a way that results in public sector wages that are reasonable and sustainable. Benefits pooling was one such idea that was identified during those consultations, says the government.
The government will begin benefits pooling consultations this year. More information on the consultation process will be made available to insured benefits plan sponsors in the coming months, says the government.
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