Child Care Now: Nova Scotia’s approach to the child care pension plan raises concerns

This article was first published by Child Care Now’s national office on 21 June 2023. See the original post here.

The government of Nova Scotia has hired the consulting firm HUB International to develop options for putting in place extended benefits and pensions for the child care sector

In a presentation made to the sector on May 11 2023, provincial officials and HUB international representatives described various options for benefits administration and two broad pension options of 1) a Retirement Savings Plan (RSP) or 2) a pension plan. 

Following this presentation, HUB International distributed a survey to ECEs and operators to determine their pension and benefits priorities, and began collecting data from operators on their existing benefits plans. They will also be forming a sector working group of ECEs and operators to provide input to the consultant and provincial officials responsible for early learning and child care. 

However, Canadian Union of Public Employees (CUPE) has raised concerns about the design of the survey. CUPE says the consultation process is structured to produce results favouring group RSPs. Group RSPs do not offer financial security in retirement because the retirement benefit of each group member depends entirely on how the savings are invested. A defined benefit pension plan, on the other hand, provides employees with a retirement benefit based on the employee’s salary and the length of time the employee has contributed to the plan.

Child care staff are leaving the sector in droves because it is impossible to save for retirement given their low salaries. A 2019 survey by the Canadian Centre for Policy Alternatives – Nova Scotia found that only 16% of ECEs in non-profit child care centres and 12% of ECEs in for-profits centres had access to a pension, compared to 67% of ECE working in pre-primary. 

“For many ECEs, access to a decent pension plan would make it possible for them to stay in this sector, doing what they love,” said Margot Nickerson, President of CUPE 4745. “Group RRSPs provide no guaranteed income on retirement. That’s not a risk ECEs are willing to take. We deserve better than that.” 

A recent study released by Statistics Canada found that in 2016, 14.5% of early childhood educators and assistants who had no registered pension plan left the child care services industry, more than three times the rate of 4.5% observed among their counterparts who had such plans. 

Child Care Now also echoes CUPE’s concerns about the Nova Scotia consultation process and calls on the provincial government to move forward to develop options for introducing a defined benefit pension for everyone who works in licensed child care, not only ECEs, and one that provides comparable retirement security to those pension plans covering government and other public sector employees.