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Public Option for Pension Security?
Susan
Eng, Vice-President, Advocacy at CARP shared an interesting article she
worked on with the help of Jean-aPierre Laporte, a pension specialist at Bennett Jones. It discusses the federal government's Pooled Registered Pension Plans (PRPPs) and advocates more stating, Public Option for Pension Security - PRPPs not enough:
Pension
reform – where are we now. The seesaw drama of getting the finance
ministers to finally acknowledge that Canada’s retirement system needed
fixing took nearly two years. When they emerged from their shells last
June, they offered a two-track solution: “modest” CPP enhancement and
a commitment to have the private sector devise a product to fill the
rest of the savings gap. By December, CPP-enhancement was dropped and
the 'Pooled Retirement Pension Plan' or PRPP was announced.
CARP
members were not impressed with a voluntary fund run by the private
sector and said so in our survey - which we dutifully conveyed to the
junior federal minister of finance and his officials. Such
multi-employer plans are already permitted by federal law and in Quebec
(they are called simplified pension plans), but there has been very
little uptake over the last decade. So now the industry wants the
government to do its marketing for it.
Skeptical?
One of the questions at the recent PRPP consultation was whether
employees should be automatically enrolled in a PRPP of the employer’s
choosing. Our answer was: only if there’s a public option along with
the private sector run offerings.
Why? You can already
invest your money in Canada Savings Bonds or in private bonds issued by
corporations or banks. It follows that Canadians should similarly
have a public option for their pension savings. The antipathy towards
the financial services industry shown in the polling was likely shaped
by news of financial frauds, overcharging on fees and unnecessary
foreclosures.
What part of “retirement security” did the
federal government not understand? Even provincial premiers are calling
for a CPP expansion along with federal opposition parties.
A
practical solution is staring all of us in the face – allow people to
buy into a separate fund run by the existing not-for-profit pension
funds like the CPP, OMERS, provincial Teachers Funds and the like. With
their size and experience, they can offer low-cost, reliable defined
benefit pensions – which, coincidentally, is what we’ve been asking for.
Monies contributed by individuals and their
employers, would be invested in a diversified fund but separated from
the fund managers’ other holdings. These contributions would be pooled
with those of millions of Canadians participating in such public funds
and would benefit from huge economies of scale – a scale that a myriad
of private sector funds would not be able to achieve. And with such
economies of scale comes the advantages of lower fees and access to
lucrative investment options (private equity, infrastructure etc.) that
retail private funds cannot and would not be expected to offer.
A large pool also allows the administrators to purchase annuities for
each beneficiary on a regular basis so that by the time of anticipated
retirement, the target or promised pension benefit would be available
(thanks that what insurance experts call 'risk pooling' a key ingredient
for insurance markets to exist). The existing CPP makes the same
promise but does not need to purchase annuities, relying instead on the
actuarial predictions and adjustments that a massive fund and long term
horizons offers to minimize risks.
In short, the key
advantages of a true defined benefit plan would be coupled with the key
advantages of knowing in advance what contributions are required.
Historically, private insurers used to provide defined pensions in this
manner in the 1950s and 1960s but ceased to do so because it required
them to maintain regulatory capital on account of the fact that
insurers were on the hook for pension promises. By transferring the
underwriting risk to a large enough entity (the public funds),
Canadians can have the certainty of a defined benefit promise without
putting pressure on insurance companies. The key to this approach is
thesetting of actuarial assumptions very conservatively, thereby
avoiding surprises.
B.C. and Quebec have adopted a similar
model for car insurance in their provinces. This model works and
Canadians in those provinces generally pay half the premiums Ontarians
pay. Ironically, allowing a public alternative will introduce a
healthy dose of competition for our pension dollars, something which is
surely bound to benefit everyone by keeping private providers honest.
CARP
isn't the only one wondering why PRPPS should only be the exclusive
domain of the private sector. Greg Hurst of Benefits Canada reports, A case for allowing pension funds to manage PRPPs:
Recently
OMERS CEO Michael Nobrega suggested that pension funds should also be
permitted to compete with banks and insurance companies when it comes
to pooled registered pension plans (PRPPs). Benefits Canada followed
up with an story and online poll
asking “Should large pension plans be permitted to administer the new
pooled retirement pension plans?” At the time of publication, 53% of
respondents say “Yes” (including me), 23% say “No” and 25% say “There’s
not enough information yet.”
If OMERS
or other large pension plan boards are interested in competing with
banks and insurers, I would like to suggest that perhaps they need not
wait for the provinces and the federal government to flesh out the PRPP
framework.
The trail that’s been blazed by the Saskatchewan
Pension Plan (SPP) might represent an opportunity for other large
pension funds to seek “specified pension plan” status from the federal
government under the Income Tax Act regulations, and thus allowing them to compete in the PRPP space.
Recent Income Tax Act amendments made for the SPP including these two changes:
- All
instances of the term “prescribed provincial pension plan” were
changed to “specified pension plan”. This could this be a hint that the
federal government might be open to also bestowing specified pension
plan status on plans without provincial government sponsorship.- The
$600 annual contribution limit was removed and RRSP limits now apply.
The $2,500 limit in the SPP is now only a function of that plan, not
the Income Tax Act.Any Canadian with employment income can apply to join the SPP.
Unlike PRPPs sponsored by banks and insurers, the SPP has a fiduciary
framework that is focused on the delivery of retirement plan services
and income to plan beneficiaries without the possibility of conflicts
with shareholder interests.
Other
large pension funds would offer similar fiduciary frameworks, and many
can deliver at costs even less than the SPP through economies of scale
already established. OMERS has demonstrated this already in very
competitive pricing for their new voluntary contribution account
services for their current plan members.
Even if specified
pension plan status for other large pension funds is not forthcoming
from the federal government, the current pension statutory framework
does not preclude a willing pension plan board and sponsor from
amending a pension plan to extend participation to unaffiliated
employers. In this regard, it is noted that although there is a
minimum employer contribution requirement for a defined contribution
provision (1% of earnings), this is subject to the administrative
discretion of the Minister of National Revenue. Further, such rule will
have to be modified in any event, in some fashion, to accommodate the
PRPP principle of voluntary employer contributions.
In
addition to the advantage of fiduciary independence from shareholder
interests, large pension funds as competitors to financial institution
PRPPs would also have the following attractive features:
- participating employers would be relieved of any direct fiduciary obligations in respect of the pension plan (like PRPPs);
- an immediately competitive pricing regime, based on already established economies of scale;
- an established track record of investment results; and
- investment
offerings that are appropriately limited for a pension plan,
particularly when compared to the plethora of investments offered by
financial insurers which are very confusing for most pension plan
members.Perhaps most importantly, competition from large
pension funds can set a tough standard towards ensuring a pension
policy objective for PRPPs of realizing benefits from economies of
scale and delivering most of those benefits to better the retirement
income security for Canadians covered under such plans. Utilizing OMERS
new voluntary contribution account fees as an example, fund investment
management fees could be as low as 0.50% per annum (and possibly
less), along with a fixed administration fee of $23 per member account.
The
only question large pension funds really need to ask of themselves
concerning this kind of pension innovation is, “Why wait?”
I
couldn't agree more, why wait? The problem is that the private sector
knows it can't compete with OMERS, CPPIB, and other large Canadian
public defined-benefit plans when it comes to delivering well governed, cost effective
retirement funds that invest in both the public and private markets
(you can add HOOPP in the mix even if
it's a large private DB plan). That's why you'll never see Canadian
public DB plans compete in the PRPP space. Politicians will never allow
it. It's a shame because it makes perfect economic sense and despite
what banks, mutual funds and insurers think, I'm sure other corporations
would love to offer their employees a public option for pension
security.
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Your articles are an insult to people working in the private sector. As you have called on Tyler to cut people off from posting here at ZH, I wish the same of you. George Washington may be a Liberal Progressive douchebag, but you by far take the cake, when it comes to actively trying to advance entitlement for those individuals who for some reason think society would crumble without their "service".
Life is a fucking gamble, you either make it or you do not. Attaching a fucking safety net to everything, and everyone only does one thing faster, and that is sink the fucking ship. You progressive idiots can't wrap your head around the fact that as the population explodes faster you will never be able to keep up fiscally. Your save the world attitude is only as well meaning as the generation being placed into indentured servitude to pay for it. Some of us still believe it's better to be free men/women then to be a slave to security.
I hope you get what you are looking for in life, and then I hope you go broke paying for it. I can honestly say this will be the last time I read or post to another one of your articles. I hope that makes your day complete.
I have come to consider the financial sector as a part of the public sector since they have the gov garantees. It is only my opinion, but I am sure that there would'nt be that much abuses otherwise. The risk in still on the taxpayer.
Leo your the clown. What a joke. Everything that is DB plan is a ponzi scheme. I am glad myself and my son will have to pay for this...........
Who cares if it even does outperform, it doesn<t change the fact that it is a fraud on the taxpayer's back. Not to mention the insane salary at the Canadian Gov which the pensions are based on. I have seen jobs were the canadian gov pays 3x what the private sector does.
There are abuses EVERYWHERE in the public sector. So what? Want me to remind you of abuses in the private sector too? Just look at the banksters on Wall Street...
Another moronic comment - so are you somehow suggesting that because there are abuses in the private sector then rampant abuse in the public sector is OK?
the abuses on Wall Street are precisely because they own the corrupt Govt... they can commit fraud and theft on a mass national scale, destroy competitors with regulators and nobody wil hold them to account... in fact the public sector will bail them out, so that they can rape and pillage again
Government IS the problem.. the public sector IS the problem of the economy ...public pensions HAVE failed because they were ponzi schemes from the outset and snivelling little crones like you have been hired to cover that failing stink in snake oil and add white noise while they transit to the next sack of political shit
Know your place in history Mr Kockupalotis... you're a hired crone of a stinking failing system
Leo:
Thanks for your comments, although it is obvious a lot of readers don't agree with you. I think you are correct in pointing out that "fees" are a big part of the problem. When the focus of advisers is more on fees than benefits to the customers the customers always have problems. The rake-off factor has a bad habit of turning some decent investments into crap.
Kockupalotis isn't worried about fees, it's merely a ruse, as he wants to INCREASE pay packets of the crones appointed to run the mega-funds
Kockup-alot simply wants to destroy small competitors and centralise the industry
Kockup wants "defined benefits" but hey, didn't public pensions have defined benefits from the outset of setting up these public ponzi schemes?????
Kock wants to 'redefine' because what was defined the politicians and industry has failed miserably to deliver (as always). In short he wants to sweep the incompetence, fraud and lying under the rug, cover it with snake oil, and 'redefine' the next stage in this ongoing disasterous ponzi scheme without anybody being held to account (as always).
The usual slippery incompetent dishonest public sector asshole (Madoff is a beginner compared to Govt and its crones)
Message to Tyler, can you PLEASE get rid of this clown, Zero Govt. He's embarrassing himself and more importantly, detracting from comments on your blog.
LOL
I read Leo's comment "Message to Tyler, can you PLEASE get rid of this clown," before I read who posted it
it's Leo's cry for help... these public sector crones can't handle cross-examination or competition before they throw their toys outta the pram, shit their nappies and cry for 'Mummy'
you're the most unpopular hired Govt trumpet at ZH you corrupt Canadian crone, edit yourself you fuking brain-dead cut-and-paste retard
The truth is I'm not for or against gvt. programs, but you're too stupid to engage in a serious policy discussion do you have to constantly insult me with petty attacks. Grow the fuck up already!
you've already laid your cards on the table dimwit... you're for centralising, you're for mega-pensions, you're for public pensions, your for defined benefits, your for covering over one failed political sham with another bigger bailed out sham
You don;t want a serious policy debate, you've already nailed your colours to the mast and are too fuking corrupt to address anybodies suggestions (as you've proved above)
You are the very definition of a knuckle headed blinkered public retard and your 'solutions' are covering the stink with another equally dumb new mega-stink. Why don't you fuk off back to your Canadian crony hole and stop posting your smarmy shite here???
Most of the pension problems, and the retirement dilemma in general, was caused by the declining bond yields of recent years. Everyone got sucked into the search for "yield" in the stock markets and the derivitives markets. Contributions waned when "everyone" knew they could have their cake and eat it too. Who needed a pension, we were all going to live off our home.
Public plans can be made to work. The other option is to let Goldman or JP manage our retirements for us.
A stable currency would help. It is hard to save without a "store of value" over the looooong run.
Change will come.
http://robertreich.org/post/3752615196
gh
And that alpha-seek was definitely "as planned" (pun originally unintended, but allowed to stand once recognized).
I'm somewhat amazed that the PBGC isn't more powerful an organization than it is. Over the past decade it has held enormous leverage over airlines and manufacturers alike. I would like to see if there is a study of any correlation between having the government owning preferred shares due to a pension covering move and the company being given preferential treatment within its sector.
Leo, you need to start being "honest". Typically, people don't value the judgement of those who carry water.
I'm linking to an article you posted on March 1st.
http://www.zerohedge.com/article/omers-earns-12-2010-deficit-swells
Take a good hard look at the image you embedded in your article. Better yet, here is the "blown up" version of that image:
http://4.bp.blogspot.com/-AWzdNIUomg8/TWxrXrFfdQI/AAAAAAAACQ8/TBUbp9fGdF...
Look at OMERS benchmark for private equity... 28.05%. They got a 22.21% return, missing their benchmark by a ton. The private equity return was a big piece of the overall return they obtained that let them "meet" their overall benchmark. They made their "numbers" in a very good year using "subprime" managerial skills. Going forward they will not be so lucky.
I would not let them manage moneys for people I care about.
I realize you have an interest in the pension industry, and judging by your enthusiasm, I think one would question whether that is healthy. I understand everyone needs to make a living but don't throw pensioners under the bus by recommending courses of action that clearly will be detrimental to their fiscal well being, in the long run.
@ Canucklehead,
I am honest and OMERS did underperform its benchmark in private equity in 2010. And in 2009, they took a drubbing in private equity, which I wrote about:
http://pensionpulse.blogspot.com/2009/02/omers-takes-drubbing-in-private-equity.html
But you have to understand these asset classes over a longer period of time, not just one or two years. OMERS has internal expertise in private markets that very few large DB plans have developed. They have repeatedly stated that they have aspirations to move their asset mix towards private markets. And it's not all about beating benchmarks, which I have criticized them in the past. Given the nonsense going on in the stock market, I am beginning to understand why these large DB plans want to go private. It's an ambitious goal, very difficult, but OMERS has the internal expertise to manage private assets internally and co-invest with other GPs and LPs externally.
Leo if you look at the chart you posted on March 1st, it shows that OMERS did "Not" take a drubbing in private equity in 2009. On the contrary, Private Equity made their "numbers".
http://4.bp.blogspot.com/-AWzdNIUomg8/TWxrXrFfdQI/AAAAAAAACQ8/TBUbp9fGdF...
Their benchmark was 6.7 and they obtained 13.9. Which leads to the next question...
If after a good year in 2009 where they beat their benchmark handily, they failed miserably in 2010 after they bet the house on the sector. What happened? Did some key personnel leave? Is OMERS simply a place where you learn the game and leave to make real money? Does OMERS have a revolving door when it comes to personnel and skills needed to properly manage key investments?
OMERS is an accident waiting to happen. They already are too big for their own good. Making them bigger simply to socialize the risk when they fail is not the course of action that all reasonable Canadians want.
Now getting back to being honest. How many swings at the ball do you want to take? It's strike two on this article alone...
I wonder what the world would look like if the DB had never existed. I a sure that "we" would be in a much more stable position than were are in. The promises behind the DBs simply can't be met.
I can't see a way to unwind this. The DB promises are in ink and will prove difficult to renege on. There will be financial casualties as a result.
But we ought to wake up to this and get all munis (Canada and USA) out of this by restricting DB's going forward. Why "we" don't recognize this is beyond me.
Bruce and Leo, I'm wiling to see some truth in both your points on the DB, while I lean most heavily towards Leos points in his reply. What is your definition of define benefits...union aggreements made with govt with no provisions to pay or DBs like Soc Security where a trust fund is set up and relied on to deliver promised benefits? I realixe Soc Sec is a bit of hybrid in that it includes insurance for some things that can be far in excess of an individuals contributions, like SDI, spousal benes etc. To me DBs like Soc Sec have some discipline in them because you have to ensure sufficient income is coming at current tax rates and returns to satisfy obligations. Soc Sec trust fund can and has been adjusted, its not like the DB are written in stone. Yes hard to change but not impossilbe in face of crisis. That's a bit different than promising to some one making below prevailing wages that you will its a good deal to still work for you because you will make their compensation competitive in the form of generous in retirment benes of X that you then make no current provision to pay for. Not paying the DB you promised is breaking an agreement, a bit different than adjusting a trust funds contributions/payouts to keep it solvent. Many local govts essential ran hidden deficits by running up unfunded retirement benefits, while others, I believe LA County is one example, went the trust fund route and actually contributed to cost of eventual retirement benes at the time they were paying employees and getting their services.
If your calcs of benes to contribuations get whacked in a trust fund, Soc Sec and you figure along the way that the trust fund is not going to last past 20 years when you had it good thru 35, you have time to find a democratic solution...just as can now be done, retirement age change, lift the cap 100k cap on FICA tax, shoot, put a minusluce tax on all earnings like dividends, I have plenty of friends that are sole proprietars who already have done enough to insure they max their FICA benes, so now they incorporated and show most of their income as dividend to avoid the 15 percent FICA self employment tax....most of these people are making very good money but paying less FICA taxes on thier earnings than a "wage" earner. Yes, I know that means they are paying into system more than they will take. But it is a combination of pooled risk insurances and retirement pensions related to contributions, so it is known you are not getting a direct return from your contrubutions as you would in 401k but you are also getting pooled risk. If you live to 100 you get whole bunch more than single guy who dies before he retires.
That last point and my concern about rip-off schemes/fees in many 401k systems had me also been thinking about the public option for retirment option to US employees using 401k 401bs whatever they are called for public employees....so I was delighted to see Leos post here (I really agree with his investment opinions tho :))....Here's the thing about 401k in mind, for someone that has a meager one, gets no contributions from employer, ans will have to rely on it and Soc Sec for retirment benes. I have several big problems with 401ks 1) while US workers foam at mouth about choice when discussin privatizing Soc Security, 401ks often offer very lmitied choices. I wanted to put some small portion of my 401k in precious metals and bear mutual funds in 2007, and there were no such options in my 401k. My employer their idiot 25 year old financial planners have chosen my limited options for me. So I just went safe, good enough and bought some bear stuff with the little after-tax investment stuff I have however, I have far less choices than professional pension fund managers do. 2) there are many and varied conflicts of interests involved in US 401k system, employers, the invesment guys they hire, the mutual fund guys and the stocks they buy. given the dispersed multitude of funds and systems, a different one for every employer! even a great govt regulator would have a hard time ensuring these non-arm length transactions and conflicts of interest all up and down the 401k food chain were not ripping people off. 3) Fees, fees and more fees...as everything in our society gets streamlined and outsourced somehow the middle man in financial investments is still doing awfully well, how's that? 'nuf said. 4) Individual investors suck 5) 401k are not pooled risk. So if I live to 100 what does a few hundred k in savings do for me? I know I can buy private life insurance etc and find other ways to pool my risk but again I'm going it alone up against a bunch of sharks whose full time job is to nickel dime my money away, spend money on marketing their product, spiffing the sales guys etc...I supsect there are many other issues with 401k vs prof managed pensions wwhich I'm sure Leo could school me on, I'm sure there are books on it, I'm just stating some of the things that seem obvious on the surface to someone who has not studied this.
So with this, I've been thing how much I'd love to buy into a public run pension system rather than my 401k. If there is a big trust fund run pension system for public employees that has a good clean record and I could get my fair say democratically, why can't I take my pre-tax money and buy into it? I would be willing to pay commensurate to what govt employees or their employees pay in, shoot depending on the situation, I likely would be willing to pay a bit of surcharge being an outsider coming in, I would be of course a slight bit more work accounting for. The public run pension would not, maybe should not recruit me or spend any money marketing to me but rather just have a modest information page and process to enroll and any small extra cost of my enrolling/associate legal issues should be born by me and others like me rather than main pension members. A public pension system offered me this it would likely be a very good buy for my. They would likely manage money better than me, less of my money would end up in fees, I would get insurance, defined income while I was alive, spousal benefits etc all in one stop shopping. Of course particiaption in such a public pension fund would have to protable, something that would follow me, not dependent on my employer. Instead of wading thru various insurance things marketed to me, going with variosu mutual funds that someone has already limited my choice, it would be one stop shopping. You pay x, you get y in beners, take it or leave it. Big pension fund admin costs would be muchl lower just as Medicare sdmin costs much lower than private medical insurance.
When I think about it, one big issue with US health care system was the lack of portability the need to stay with employment. Not very efficient with employment markets and seriously tamps down on people innovating by starting own business etc. A big problem with DB local town plans is also lack of portability. 401ks at least have portability. But why not both public and private employees have the OPTION of being members of a democratically run pension trust fund, one that is portable for all. The employee can make the pension fund contributtion directly or let emloyee pay, either way its pre-tax. Then some small town water works buy can move to another state when his ex-wife takes that children there, and still have a pension.
These pensions systems would not have to have iron clad DBs but rather pay out in a range based on general economic stats and contribuations, benes can be adjusted on performances. As longs as all the members have democratic controls.
I agree whenever private outside firms involved there is chance for corrupted, kick backs....better to have a publicly run pension system with democractic oversight.
Like it Leo, like it
Bruce: "I wonder what the world would look like if the DB had never existed"
Let me answer this. First, you would have a lot more pension poverty. Second, you would give the banks, mututal funds, and insurers enormous power to freely rape individuals on fees (which they already do). Third, you would have a problem attracting competent teachers, police officers, firemen, civil service and other public sector workers to their vocation. Let's stop deluding ourselves with the myth that the world is better off without DB plans. This is pure nonsense. What you need in the US is pension reforms to introduce investment projections that are realistic and other reforms to shore up underfunded plans. You also need to introduce better governance standards, with independent investment boards and proper compensation policies focused on risk-adjusted returns over a long period.
Leo we DO have pension poverty. The obligations of the SS and every State and local Muni are forcing the country into poverty.
We would have a problem attracting good teachers?? You're nuts. There are tons of good teachers that would love a job. But they are locked out so others can earn those big pensions! So the system is busted. The pension system is part of the problem. It is not part of the solution.
Bruce: " The obligations of the SS and every State and local Muni are forcing the country into poverty."
Wrong again! Entitlement programs are current spending, and are the result of political decisions. It makes no sense whatsoever to treat them as liabilities because those political decisions will change. I wish some of you would also admit that gvt spending can stimulate the economy and create tax revenues.
Leo SS is 6% of GDP and 20%+ of the budget. Of course it's stimulative.
What so many of us who read you worry about is that this is just more of the oxygen. We're not healthy if we are on life support. As we see with SS and every muni DB they just run deficits far larger than forecast. Not a day goes by without a reminder of this.
It's unsustainable. You don't get that. You think that "gas" is "good". The lines on this crossed in 2008. Get with the program.
What a fucking stupid comment from a govt lap dog. Any spending CAN stimulate the economy and create tax revenues the real question is which kind of spending does so in the most efficient manner with the greatest returns.
Keynes could never get around the fact that government would never pay off the debt connected with spending...so he left it out of his formula...and here we are.
http://www.youtube.com/watch?v=4wNknGIKkoA
"I wish some of you would also admit that gvt spending can stimulate the economy and create tax revenues."
OMG...there it is!
Are you some kinda Kaaahnesian boy!? Banzai™...LOL.
The-money-was-taken-out-of-the-private-sector-through-taxation-FIRST!
So by your logic, you could make a great argument for taking ALL the money out of the private sector through 100% taxation and all government budgets would then be in balance because of this magical "creation" of tax revenues!
But some of us here would call that system something completely different than free markets, free people & free societies Leo...so again we would not agree...can we at least agree on that? ;-)
Leo, there are problems with your inference that public sector workers have a vocation that is stunted because they are not paid enough...
It's not just about money, but the least you can do is offer them a decent DB pension.
Right on Leo, a 30 year career of gruelling 9-5 labor with six weeks vacation (unless you teach then its 14 weeks), overtime @ 1.5x except weekends @ 2x plus a month/year of sick days that can be accrued for a decade and premium health care for the rest of their days while collecting an indexed pension @ 80% of their three best years. These people not only deserve the right to retire at fifty something but to do so with a gold plated DB plan. (forty something if they choose the disability option you know teaching or endless days shuffling papers can send you over the edge)
you sound jealous but something tells me most people here would hate working in the public sector.
Come on Leo you were being sarcastic and so I built on that. Please don't tell me that when you wrote "the least you can do is offer them a decent DB pension" that you weren't being sarcastic. People have been banished from ZH for less.
The focus on new hires going forward is dangerous and misleading.
The pot will have been scooped thirty years before they retire by an aristocracy of sixty/seventies leaving their younger cohort holding the bag.
The sensible way to deal with this is to decide what portion of government spending should be dedicated to pensions, have an actuary see where the plan stands, preferably using a realistic yield projection, identifying the shortfall and cutting back all benefits by the percentage shortfall, kinda like bankruptcy court. This way equity is preserved between the various age cohorts.
Leo as a canadian taxpayer I can assure you I am working closely with MP's to ensure that all public sector pensions are changed to DC so that I can feed my kids and pay my bills in the coming decades.
I, the little taxpayer, have told my MP's that if they want my vote they must have a formal plan as a party to dissovle public pensions. I want a Wisconsin. Dammit I'm gonna get one. Cause you know what? I fucking tired of feeding deadwood.
DB pensions are half the cause of the soveriegn crisis, the squid and their cronies are the other half.
What does that say about the public sector? Flip a coin, scum or scum. same shit.
And to add that nationalizing our private pensions is great strategy? Holy fuck man, what happened to ya. Can you imagine Jack Layton's dipshit party running pensions? Or Harpo and Flap Flap Flaherty? Or iggy?
As a maritimer, I'm fucking stunned as it is. You just stunned me even more.
mogul rider,
As a Canadian who has testified in Ottawa twice, I will advance pension policies that are in the best interests of all Canadians. What stuns me is how ignorant you are on how well the large Canadian DB plans have performed relative to their counterparts in other countries and relative to private Canadian DC plans. Organizations such as CARP are advocating a public option for pensions precisely because they,re trying to combat the trend towards pension poverty. And DB pensions "are half the cause of the sovereign crisis"? Really? Where did you pull that statement out from??? I suggest you stop lobbying MPs for policies that make no sense whatsoever for the greater good of Canadians (and MPs' own interests) and start thinking about what does make sense and how we can fund it properly so that there are no generational inequalities.
Uh Leo, let's work the math here for a sec
I said I am sick and tired of paying for people's pensions? What partof that is wrong? ZERO my friend. I am sick and tired of paying for your pension.
Second, let's follow th cash here.
You make 50K as a public serpent. I pay your salary with my taxes.
You pay income tax with the money I pay you which is not really yours since I paid it in the first place. Whatever is left is your to live on. I also pay all the MERCS on that 50K you make. Thusw after taxes you take 30K or so. I also pay for your pension minus the small amount you contribute through payroll deductions.
I do pay you because I pay well over a 100K in taxes a year. So in fact I pay for two of you.
My point is Leo that after the PONZI money is tossed around my dollars are what make the world go around. Yours specifically.
I am moving my assets and businesses to Jersey. Since I pay you and all your benefits and deductions out of my taxes whoi is gonna pay now?
The canadian version of the chairsatan - Carney's printer.
You can put all the PHD spin you want to on it. I have operated numerous businesses for 50 years very successfully and I know money and how it works.This is a money grab on the part of the elites to take away private pensions and blow it. Just like Argentina. Tell me how that one is going.
The game of public serpant ponzi in my godammned businesses and finance is over.
That is all that matters. Most importantly, your idea of taking over my RRSP for the good of me - is with all due respect a joke.
It's the law of unintended Argentinian consequences.
Nationalize pensions and screw the people.
You won't get mine that is for sure
good luck to you
mogul,
I'm a 39 year old man with progressive multiple sclerosis who is lucky enough to be able to work full-time at 2 contract jobs. As a self-employed contractor, I have no pension and no benefits whatsoever. As for public sector workers, your argument is way off. Yes, we pay taxes to cover their salaries but so what? Their pension contributions come straight off those paychecks. You also pay taxes to pay teachers, nurses, cops, firemen and doctors here in Canada. You have every right to demand transparency and accountability, but your stance is ridiculous, akin to throwing the baby out with the bathwater. Take a step back and think about why public DB plans are better.
Leo, as a contractor you have a pension program and benefits program if you choose to contribute. I suspect your accountant has you making your maximum RRSP contributions to purchase solar stocks. Regarding benefits, we have universal health care. I thought that was a panacea. Granted, you may not have dental, but those medical expenses not covered by public health care are deducted from your income.
Don't be so deceiving.
...Obligatory condolences on the progressive multiple sclerosis...
why are defined benefits better?
They were defined from the outset, when the politicians erected these ponzi schemes.
So the previous 'defined benefits' have been reneged on have they not? Who has been held to account for this incompetence of this ponzi scheme??
Regards you being a private contractor, who is hiring you, the State? ...your non-stop drivel/cronism has you down as one of those hired 'consultants' that provide 'independent' advise. Bollocks of course, they're hired to cover politicians lies and incompetence in snake oil, and come up with new BS to 'transit' from one lie to another (the easy, politically expedient option as always for the slippery criminal political scum).
And you've "testified" in Canada... no doubt hired to provide 'expert' advise the nodding politicians wanted to hear right?
Mogul
You're wasting your time (and breath) with this public retard, your intelligent words ping like peas off knuckleheads skull. He is committed to bailing out previous crap with yet more botched together pension crapology, in particular trying to rob (pool) private pensions and centralising the industry into mega-funds (a recipe for mega-disaster for everyone involved). A shell game to paper over the stink of pensions with snake oil going on right across the Western world... this tit-brained Titanic won't change course so let the drowning Canadian crone sink into the icy depths which is a certainty in the next 2 years
Why is the following storyline is always promoted by industry lobbyists...
... An organization/lobby claims to be doing "God's work"...
... The end result is anything but...
So much promises of fat pensions to keep the Soviets away... now the day of reckoning arrives.
Delicious tears are delicious.
Eh. Defined payout pensions make sense to me. Like social security kinda. Government should provide a floor but not a ceiling for income. Starving people aren't really cheaper, and if the government steals the money the problem is more that the government is a thief than that defined benefit plans are nonviable.
blake, don't why you were junk, agree, good points
Leo, you should just retire; perhaps to a quiet out of the way Greek Island.
so what your are suggesting is that working folks (non public service) should be given a chance to take their 401k $$ and throw it in with the public service $$ to reap the benefits of their investment prowess.
Fact remains that the public service unions have gold plated benefits courtesy of the tax paying working folks - to wit: my dog enjoys crumbs that fall from the table
In Canada, large public DB plans have outperformed private DC plans. I suspect the same is true in the US, so given the option, you are better off to have your retirement money with them.
If only we could all have a publicly funded pension plan, we could all retire as milionaires. Oh that's right, we have social security and it's going bankrupt in 20 years.