Need more proof conservative solutions to Canada’s retirement crisis (encourage people to save more in private savings; block the expansion of the Canada Pension Plan; and get rid of defined benefit pensions) make no sense? Here are the latest examples: 1. Winning the lottery is not a retirement plan A new survey of BMO Financial Group found […]
Need more proof conservative solutions to Canada’s retirement crisis (encourage people to save more in private savings; block the expansion of the Canada Pension Plan; and get rid of defined benefit pensions) make no sense?
Here are the latest examples:
1. Winning the lottery is not a retirement plan
A new survey of BMO Financial Group found that 34% are relying on winning the lottery so they can pay their bills in their retirement years, including 14% who said they’re relying “heavily” on a lottery win. And 89% said they’re relying on CPP or the Quebec Pension Plan to cover their costs, including 31% saying they’re relying “heavily” on their public pensions. Yet, the average monthly CPP payout is less than $600, BMO notes.
We could double CPP pension benefits by saving less than 3% more of our salaries because the CPP structure is cost-efficient. The Conservative government, though, is fighting the expansion of the CPP. Instead, they’re encouraging Canadians to save money in private retirement options, even though people don’t have the cash at the end of the month.
2. Rolling the dice on the market is a bad idea
Here’s some advice that appeared recently in the Globe and Mail’s investor section:
“Secure a job with a defined benefit pension, ideally one with a union that protects you from the wiles of a topsy-turvy job market. Union fees are negligible compared to retiring without a healthy pension. If possible, get a job as a public servant, which can be anything from working directly for a government ministry to teaching. Public service is the only environment where defined benefit pensions will remain fully funded. My pension plan allowed me to retire at 62. Without it, I would have worked full time until I turned 67 and left work without the peace of mind of knowing exactly what will be deposited in my bank account every month by the pension plan,” wrote Joyce Wayne.
The problem? The Conservative government is working hard to weaken unions so they can’t fight for fair wages and benefits like defined benefit pensions.
3. Attacking pensions (with breathtaking hypocrisy) from Canada’s corporate elite
Gwyn Morgan retired as a top executive of Encana Corp. with a defined benefit pension worth $26.5 million, paying out $1.7 million annually. There’s no such pension for employees of the company. And yet, there he was in the Globe and Mail recently, arguing that “gold-plated” defined benefit pensions in the public sector are too generous (the average is $24,000) and unaffordable. He’s calling for the conversion of such plans to “defined contribution” to match the growing trend in the private sector (for employees, not bosses like him).
The Canadian Union of Public Employees’ Toby Sanger sums up the breathtaking hypocrisy: “Does this guy ever look in the mirror to do anything more than admire his own magnificence – and perhaps maybe consider the contradictions in his columns or his own hypocrisy?,” Sanger asked about Morgan, who boosted his Encana pension as chair of the board of SNC-Lavalin. During his time there, senior execs got into trouble over allegations of bribery and corruption around the globe.
“I could go on and on, but if there were a Petulant (and hypocritical) Plutocrat of the Week award for Canada, Gwyn Morgan would surely drive, walk and run away with a lifetime achievement award,” writes Sanger.