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Is Canada on the Right Pension Track?

Submitted by Leo Kolivakis on 10/16/2010 15:39 -0400

Bernard Dussault, former Chief Actuary of Canada, now Senior Researcher and Communications Officer at the National Association of Federal Retirees, sent me the latest from CUPE, Canadians support increase in Canada Pension Plan benefits:

More than three-quarters of Canadians support increasing Canada Pension Plan benefits,
according to a new national survey released today. Eighty percent of
Canadians also support increasing federal payments to senior citizens
and half of the survey respondents believe the government is moving too
slow in reforming Canada’s pension system.

Environics Research Group completed the Future of Pensions poll
in late August for CUPE and the Public Service Alliance of Canada
(PSAC). It surveyed 2,020 Canadians and has a margin of error of +/-2.2
per cent 19 times out of 20.

“From coast to coast, Canadians support higher CPP benefits," said CUPE National president Paul Moist. “They're sending a clear message to federal and provincial politicians who are currently studying ways to improve the CPP."

The survey asked Canadians their views on saving and their expectations
for retirement. While many Canadians have set up a Retirement Savings
Plan or a Tax-Free Savings Account, four in ten acknowledge that they
are not saving for retirement—mostly because they cannot afford to.

Only
one in four Canadians is fully confident that they will be able to
save enough to live comfortably in retirement, and three in ten believe
they won’t have enough to live comfortably, with lower income Canadians
being the most pessimistic.

“Canadians are concerned
with their capacity to retire in comfort,” said John Gordon, National
President of PSAC. “If action is not taken now, poverty will become a
dire reality for more and more elderly Canadians.”

Poll
respondents also overwhelmingly support increasing Old Age Security and
Guaranteed Income Supplements for those living below the poverty line.
OAS and GIS payments amount to only $11,000 per year.

The
survey also asked respondents for their preference on different types
of pension plans. Despite the economic downturn, those currently part
of workplace pension plans believe their pension benefits are safe. But
70 per cent prefer a defined benefit plan, which guarantees a fixed
amount of benefit when you retire, to a defined contribution plan,
where the benefits paid out depend on the performance of the investments
in the fund.

In Quebec, where retirees benefit from the Quebec Pension Plan, the support for an increase in benefits is equally strong. Three-quarters of Quebecers support increased pensions and 82 per cent back higher old age security payments.

Together, CUPE and PSAC represent more than 800,000 public sector
workers across Canada. Both organizations have been advocating for
retirement security for all Canadians.

David Denison, President & CEO of the Canada Pension Plan Investment Board (CPPIB), and Jim Leech, President & CEO of the Ontario Teachers' Pension Plan (OTPP),
are a few of the high profile pension executives who have come out to
defend defined-benefit pension plans. Mr. Denison also gave an excellent
presentation in June on Fixing the Future: how Canada Reformed Its National Pension Plan.

As
far as I'm concerned, Canada is in a unique position to take the lead
on global pension reform. We don't have a monopoly of wisdom on pensions
-- other countries like the Netherlands are arguably ahead of us -- but
we can start taking meaningful pension reforms to improve the
retirement safety net.

But we also have to improve our existing governance and clean up some pension issues here. Diane Urquhart sent me a link
which provides an update on Nortel's long-term disabled employees which
are still struggling to get what they rightly deserve. My personal
battle with MS has opened my eyes to discrimination against disabled
workers. It disgusts me to see how these employees are treated by
Nortel, and I hope you will all support them and fight to adopt Bill-216
(watch video below).

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Sun, 10/17/2010 - 12:17 | 656599 dark pools of soros

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Sat, 10/16/2010 - 21:22 | 655773 fxrxexexdxoxmx

When a majority of non governmental employees support contributing more, that will be news.

Sat, 10/16/2010 - 20:30 | 655725 exportbank

I hear CUPE and other unions singing their "give us the money" song and they always make it sound like that Dire Straights song "Money for nothing and the chicks are free"..

Look at OMERS - they're 10 billion shy right now and by their own admission the 30 / 70 formula is falling apart. Every private sector citizen of Ontario is looking at a $25,000.- per city employee pension shortfall today and it's growing. The Teachers Pension Plan has the same issue - Leo, where is all the money going to come from?

The over half of all Canadians are 90-days away from the Food-bank (cut off all cash-flow for 90-days). They can ask all the questions they want but they always fail to say "this will cost you a ton of money".

Sat, 10/16/2010 - 20:08 | 655701 Jake Lamotta

Θα πρ?πει να βρουν ?λλη εργασ?α

Sat, 10/16/2010 - 20:06 | 655698 Jake Lamotta

Leo i will say it in greek: π?ει σκατ?

Sat, 10/16/2010 - 20:01 | 655694 ILikeBoats

Gouvernment "wourkers" in favour of moure gouvernment and gouvernment spending - who'da thunk it? (Did I get the "u"s in the right places?)

Sat, 10/16/2010 - 20:59 | 655754 zen0

xenophobic hate crime!!!!

Sat, 10/16/2010 - 20:12 | 655706 Cpl Hicks

lol

youu did, duude

Sat, 10/16/2010 - 19:43 | 655668 Kreditanstalt

Dream on, CUPE. How would THEY feel if, like us, their eventual pension payout amounted only to their own employee contributions + 2%p.a....?

Sat, 10/16/2010 - 19:40 | 655660 Kayman

CUPE didn't ask if Canuckleheads would like to pay for it.

It's like asking children if they would like more ice cream.

What nonsense.

Sat, 10/16/2010 - 20:58 | 655752 idoubtit

I agree. Leo, you should conduct a poll to see who wants lower taxes, and complimentary foot massages.

Sat, 10/16/2010 - 19:05 | 655637 zen0

Why do Canadians think they have a right to retire in "comfort". Who defines "comfort".

Why should young generations pay for the excess expectations of the already well off?

Of course people think they should get more free money. Duh.

Old age is a marathon whose endgame is death. Deal already.

Dust to dust.

Sat, 10/16/2010 - 19:42 | 655666 Leo Kolivakis

Spoken like a young twit. I am a year away from 40, was once 20 and remember thinking like you. Fuck the old people! Problem is you're going to get old too, and if you don't have enough to retire in dignity, or worked all your life to see your savings wiped out by a bunch of arrogant Wall Street assholes, you too are going to be pissed off. DB plans are the solution, but we need realistic investment assumptions and we need contribution rates to keep up. Stop thinking it's unaffordable...that's a plain lie. A fully funded pension program is affordable. The alternative, pension poverty for the masses, is what's going to end up costing society a lot more.

Mon, 10/18/2010 - 08:52 | 657935 anarchitect

I don't care what direction CPP takes as long as (a) it's fully funded by contributions; (b) pay-outs are proportional to pay-ins; (c) there is a provision to opt out, beyond a modest contribution level, by those who want to manage their own retirement funds. The last thing I want is some groupthink committee, appointed by politicians no less, managing my retirement funds.

Sat, 10/16/2010 - 20:32 | 655727 zen0

I am 62 years old. I have seen a lot of people check out fast and slow. Well off, and poor. One common denominator, the Big Sleep.

My savings being wiped out by Wall Street and Government Street as we speak. Nothing I can do about it. All gaming the same system that is necessary to make pensions a reality.

Pension poverty will cost the Wall Pigs nothing. Government Pigs don't care, most probably got in the game for the government pensions and other perks.

Public servants indeed.They really do not care, as long as they are ok.

Sat, 10/16/2010 - 20:25 | 655721 Cpl Hicks

Well, I'm a year away from 60 and I remember what its like to be 40 and to get exercised over the arrogant assholes of life. But I got over it, realized that I better make some solid plans for the future, i.e.- not put my future well-being into the hands any politician, bureaucrat or nanny state.

BTW-the trope-"worked all your life to see your savings wiped out by a bunch of arrogant Wall Street assholes..." is a clear signal that the author is serving up a soggy, half-baked plate of baloney.

Sat, 10/16/2010 - 17:27 | 655539 ChopChop

As a Quebecer, I say NO!!!

We should have the obligation to save money but not to give it to the government. There should be a public program where suckers put their money to get 2%/year but an alternative option where I could put my money wherever I want according that I reach an equivalent target lets say every 5 years.

If I miss the target, that would prove I'm a noob and I would have the obligation to use the public option.

The idea is good but I just don't thrust the government on this!

Is Canada on the Right Pension Track?

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