Ontario Launches Consultations on New Public Sector Benefits Pooling Model
Province responding to employer and bargaining agent feedback to explore new system, access economies of scale and save up to $115 million
The Ontario government is working with the broader public sector to manage compensation growth in a fair, reasonable and sustainable way 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.
"We are a government that listens," said Peter Bethlenfalvy, President of the Treasury Board. "We have consulted with the broader public sector in good-faith and have considered all ideas that have been put on the table. 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 explore stakeholders' needs, find common objectives, define participant parameters, and develop a viable governance framework and strategy for implementation. Participation in any arrangement would be voluntary.
Through benefits pooling, government can spend smarter, address inefficiencies and duplication and make it easier to leverage group buying power.
- Public sector compensation represents roughly half of all government expenditures, totaling $72 billion annually.
- 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.
- 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.
- The government has a track record of success in group buying/benefits pooling. It presently oversees an arrangement with over a dozen BPS employers.