A Step Forward: Does Nova Scotia’s New Defined Pension and Benefits Plan for Child Care Workers Go Far Enough?

The Nova Scotia Government promised to announce a plan for pension and benefits for early childhood educators (ECEs) and other child care professionals before the years’ end. On December 20th, with ten days to spare before the new year, the Province delivered, announcing it will be providing a defined benefits and pension plan to all full- and part-time employees in the early learning and child care sector. The news came after a lengthy consultation process which included discussions with the sector, and the formation of a working group of educators, child-care operators, directors and family home providers. 

In a recent CUPE survey, 93% of ECEs and other child care workers said they feared the unpredictability of an RRSP–an option Nova Scotia and its hired consultant firm considered when deciding on retirement benefits for child care workers–and expected further financial insecurity upon retirement. Recognizing the value of a lifelong, guaranteed, and predictable income at the end of their careers, child care workers across the province sought a defined benefit pension that could support them through their entire retirement.

Though Nova Scotia’s chosen pension and benefits plan doesn’t necessarily provide lifelong, guaranteed income for all child care workers–as this blog post explores–it is a step in the right direction, and indicates the government did listen to the sector’s advocacy. 

Child Care Now’s Nova Scotia chapter commends the government for responding to the demands of child care advocates and workers, and congratulates child care advocates across the province for pushing for this outcome. 

What is the new plan?

Pension benefits will be provided through the Colleges of Applied Arts and Technology (CAAT), a large pan-Canadian multi-employer pension plan. Group health, dental, Long Term Disability, and Life Insurance benefit coverage will be offered through the Health Association of Nova Scotia (HANS). These will be made available to all child care workers, whether working full or part time; the government also promises funding towards health and retirement savings plans (RSPs) to family home child care providers. According to the Province, about 3,000 ECEs and other child care professionals working in licensed centres across Nova Scotia will benefit from this pension. 

Thanks to this new plan, up-and-coming ECEs in Nova Scotia will have a predictable retirement benefit based on their pre-retirement salary and years of service. Unlike many child care workers who came before them, many will not face retiring into poverty–but some still will.

Though this is a landmark plan, unprecedented in the child care sector in Canada, it is not perfect. 

What problems remain? 

Firstly, the years of pay inequities faced by child care workers presents challenges to realizing true financial security into retirement. 

Any pension is only as generous as the contributions made to it–and, in the case of the CAAT, it is low compared to that of many other sectors. Contribution rates for employees and employers alike (the latter of which, in the case of this public service, is the Government of Nova Scotia) are 5%. While the government will be increasing its ECE wage grid by roughly 15% in April 2024, presumably to offset the costs of employee’s pension contributions, this boost will still fail to bring most workers’ income up to a livable wage–which, according to the Canadian Centre for Policy Alternatives’ recent living wage calculations for Halifax, is $26.50 in 2023. 

Due to historically low wages, and a lack of health and dental benefits up to this point, most child care workers have not had the opportunity to put aside savings and cannot afford much more than a 5% contribution. Workers have not had the opportunity to pay into a pension for an extended duration, throughout their entire careers–and, facing still meager wages, their pension upon retirement will be perilously small, unable to support them through retirement. 

This is particularly critical considering the highly gendered child care workforce. As the life expectancy of women is typically longer than men, and the monthly pension amount received in retirement is often based on life expectancy, women retirees often receive less throughout their retirement, and face possibly running out of pension funds.

A higher employer contribution rate–and a greater payout at retirement–would mean greater income security for many ECEs when they conclude their careers.

The Province, however, wants to keep its contribution to the plan low, and is likely unwilling to finance an employer contribution of much more than 5%. However, they can, and indeed could, contribute more. This pension plan for child care workers–present and future–could be improved if the government committed to a higher employer contribution rate.

Ultimately, while this new pension plan is a strong recruitment measure to bring more desperately-needed ECEs into the sector, it is of less benefit to workers currently in the sector–and especially those nearing the end of their careers, who would have benefitted from this plan decades ago. Their experience and expertise will be critical to building a strong system of early learning and child care across the province. As new child care workers enter the sector in the months and years to come, experienced ECEs have a critical role to play, providing on-the-ground training and mentorship. 

Child Care Now Nova Scotia calls on the government to support these older child care workers as well, by recognizing their years of service so they will not face soon retiring into poverty. They have earned better.

What’s next?

Without a doubt, Nova Scotia’s defined pension benefits plan is a game-changer–and its impact is already being felt nationwide. Child care workers and advocates from coast to coast to coast are taking notice, pushing for their local governments to follow suit, by implementing a defined pension and benefits plan.

With comprehensive health benefits, and a pension to look forward to in retirement, child care workers at the beginning of their careers can, unlike generations of workers who came before them, envision a long, sustainable future for themselves in early childhood education. A Statistics Canada survey from 2016 found that ECEs without a pension plan are more likely to leave the sector in search of jobs with higher wages and better benefits, including a pension. Thanks to this new pension and benefits, this will no longer be the case for the child care sector in Nova Scotia. 

A decent pension and benefits plan will go a long way towards recruiting and retaining ECEs to promote the successful rollout of the Canada-wide Early Learning and Child Care plan in Nova Scotia–and families without access to child care, biding their time on lengthy waitlists, should soon see the benefits. Child care workers are desperately needed as the Province works to fulfill its targets for space creation–and stronger wages and working conditions (including pensions and benefits) means better access to child care spaces for families across the province, and higher quality care for the children who fill them. 

Yet, additional steps need to be taken. To create a strong child care system, Nova Scotia must recognize the workers who have dedicated their careers to the care and early learning of Nova Scotia’s children, laying the foundations upon which it will be built. Bringing the ECE wage grid up to a fair, livable wage for all workers, especially given the years of pay inequities faced by child care workers, would be a promising start, and serve to strengthen this new pension and contribute to sustained success of Nova Scotia’s burgeoning child care system in the years to come.