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Archive for 'pensions'

The relentlessly hypocritical Gwyn Morgan

Another column by Gwyn Morgan in the Globe and Mail and another case of a 0.1 percenter telling the rest of us to “Do as I say, not as I do.” This time, it’s Gwyn recycling trash from the CFIB and Fraser Institute to claim defined benefit pensions for public sector workers are too generous […]

Canada Post’s vow to ‘protect taxpayers’ needs a reality check

This piece was first published in the Globe & Mail. In a move that caught everyone off-guard, Canada Post announced a five point “action plan” last week that included phasing-out home delivery of the mail over the next five years, making Canada the only G7 nation to do so. Why? To “protect taxpayers.” Of all the reasons that merit […]

Global carbon budget is a harsh reality check for Canadian investors

The recent report of the Intergovernmental Panel on Climate Change (IPCC) should be a wake-up call for Canada. With a development model based on ever more fossil fuel extraction, Canada’s economy and financial markets are on a collision course with the urgent need for global climate action. The IPCC, for the first time, stated an […]

Are Canadian investors headed for a carbon cliff?

An oped based on my and Brock Ellis’ recent report, Canada’s Carbon Liabilities, was published in iPolitics (alas, behind a pay wall): Canada’s economic development model is on a collision course with the urgent need for global climate action. Worldwide, extreme weather events from drought to floods to powerful storms and record-breaking temperatures are making […]

Carbon bubbles and fossil fuel divestment

Divestment from fossil fuels is an idea whose time has come. Sparked by Bill McKibben’s Rolling Stone article last summer, “Global Warming’s Terrifying New Math”, divestment campaigns are now up and running on over 300 university campuses in the US, with 4 early victories already notched. Students in Canada have declared tomorrow (March 27) Fossil Fools Day, a national day […]

Later Retirement: A Win – Win Solution?

The C D Howe Institute have put out a study on later retirement by Peter Hicks, a former senior official with HRSDC and the OECD who has written a lot on the policy implications of ageing societies. I find this to be one of his less convincing efforts. The argument – with parenthetical comments – […]

How Much Will YOU Lose from OAS Deferral??

Announcing a bad policy 10 years in advance doesn’t make it a good policy. So the fact that the Harper government is giving people at least 10 years to prepare for 2 years of life without an important source of income, hardly makes it OK — as so many media commentators have tritely implied.  In […]

OAS, the Budget and the Baby Boomers

The Budget justifies raising the age of eligibility for OAS and GIS on the grounds that  the long-term fiscal sustainability of the program is being undermined by rising life expectancy. No estimates of savings are provided. They will be very modest. Given that average life expectancy at age 65 is 20 years, raising the eligibility […]

Budget 2012: Pennywise But Pound Foolish

Marc, Andrew and Toby have posted substantial analyses of yesterday’s federal budget and I have some comments in today’s Hamilton Spectator. My two cents about the budget’s economic forecasts follow. Table 2.1 envisions a 7.5% unemployment rate this year, slightly above last year’s rate of 7.4%. That seems like an admission of failure from a […]

The Illusory Savings of Hiking the Age of Eligibility for OAS

Former Assistant Chief Statistician Michael Wolfson shows that governments collectively stand to save very little from hiking the age of eligibility for the OAS/GIS, a measure that is widely expected to be in Thursday’s Budget. The math (based on the SPSDM): In 2011, cutting OAS/GIS from seniors age 65 and 66 would save the federal […]

Pooled Registered Pension Plans

PRPPs – or what I prefer to call Mr. Flaherty’s Inferior Pension Plan or FLIP- are a poor alternative to the option of expanding the Canada Pension Plan. Unlike the CPP, PRPPs will not provide a defined pension benefit  in retirement; there is no required employer contribution; there is no inflation indexing; costs will be […]

Stapleton on Harper’s Proposed OAS/GIS Changes

John Stapleton has an opinion piece out on Prime Minister Harper’s proposed changes to Old Age Security (OAS) and the Guaranteed Income Supplement (GIS). I find the following quote from Stapleton to be particularly troubling: By providing OAS and GIS at age 65, Canada has greatly reduced the incidence of poverty among seniors. By moving the […]

Old Age (In)Security

Here is an overview of today’s timely Canadian Centre for Policy Alternatives paper on Old Age Security: Old Age Security (OAS) is the basic building block of Canada’s retirement income system. Canadians build on that foundation, saving for their retirement with benefits from the Canada or Quebec Pension Plan, a workplace pension if they’re lucky […]

Diane Finley’s Demographics

On CTV yesterday, human resources minister Diane Finley said (45 seconds into this interview): “As we go forward, we’re going to have three times the expense in Old Age Security as we do now, but we’re only going to have half the population to pay for it.” That sounds pretty scary. If the total cost […]

The OAS Eligibility Age and Employment

It is argued that eligibility for OAS/GIS discourages older Canadians from remaining in the workforce, and that we need to keep them working to avoid labour shortages and a sharp rise in the so-called dependency ratio. But the fact of the matter is that 65 is not the trigger for retirement that it used to […]

Is The OAS/GIS Program Unaffordable?

No. Of course not. Even if the government waves around scary large increases in nominal dollar terms. As has been widely reported, the most recent OAS actuarial report shows that total program expenditures will rise from $38.8 billion in 2011 to $107.9 billion in 2030. However, the dollar figure reflects, not just an increase in […]

Raising The OAS Eligibility Age Would Raise Poverty in Old Age

Canadian Press have put out a story based on a research paper by Richard Shillington which was commissioned by HRSDC from Informetrica, and obtained by the CLC through an Access to Information request. Receiving OAS is required to makes seniors eligible for the GIS top up, which provides one in three seniors with a supplement […]

Low Income and the Age of Eligibility for OAS

To reprise a now topical earlier blog,  hiking the age of eligibility for OAS will have the biggest impact by far on future seniors who are in low income. Many if not most of this group are unable to work due to disability or ill health. If the age of eligibility for OAS and GIS […]

Hiking the Retirement Age is the Wrong Answer to the Retirement Crisis

Raising the age of eligibility for Old Age Security/Guaranteed Income Supplement (OAS/GIS) benefits is the worst possible way to deal with the retirement income security crisis facing Canadians. Experts such as former Assistant Chief Statistician Michael Wolfson project that one half of all middle income baby boomers face a severe cut to their living standards […]

When Will The Baby Boomers Retire?

Canada’s population, we are frequently told, is rapidly aging. The big baby boomer cohort is headed out of the workforce, meaning  that we face a future of very slow labour force growth and even possible shortages of workers. CIBC Economics has just gone so far as to argue that the Bank of Canada can afford […]

Investors Gouged by High Fees

Good coverage in the Globe for the CLC’s calculations on the huge negative impact of high management fees on investment returns from RRSPs and the like, as opposed to the low cost CPP. Does anybody out there find the investment fund industry response (we are providing good advice) convincing? If so, you will just love […]

The financial wealth of Canada’s top 1%

Following up on my post on wealth and income of the top 1%, Eric Pineault wrote to add some data on financial wealth distribution for Canada. He had a research assistant comb through microdata from Statcan’s Survey of Financial Security from 2005, and notes: “the 1% richest (all households are classed according to net worth rather […]

About those “unfunded liabilities”

When it comes to the Canada Pension Plan, a major talking point from the right is that the CPP has “unfunded liabilities”, with the implication that is not affordable and financially unsustainable. This is nonsense, a scare tactic based on an accounting fiction that counts only future expenditures but does not count future revenues. For […]

Expanding the Canada Pension Plan

The case for expanding benefits under the CPP as a needed response to the crisis of private pensions continues to win expert support – even as the financial industry and small business lobbies continue to fight real pension reform tooth and nail. The centre-right Institute for Research on Public Policy (IRPP) have published interesting and useful […]

Who Holds the Family Purse-Strings?

Statscan have released an interesting paper, “The Income Management Strategies of Older Couples in Canada.” It looks at who controls the family finances in couples with one partner aged 45 and over. (They used the age cut off because a special question was added to the General Social Survey which is restricted to that age […]

Defined Benefit and Defined Contribution: More Voices

How coincidental that the current number of the Canadian Investment Review arrived in my in-box today, just hours after CAW members at Air Canada hit the bricks to reject the company’s demand to abolish the defined benefit pension plan for new hires (and impose major cuts in pensions for the existing workforce).  The demand to […]

False Consciousness, Part I: On Elections and the Middle Class

The following appeared in the National Post today. We’re in the last week of a federal election campaign, and every party wants you to believe they’re there for the hardworking families of a middle class under enormous pressure. That’s you, right? The idea of the middle class resonates, because it is a notion we all […]

Dismal Income Prospects For Gen X Retirees

There is an interesting new piece on incomes of future retirees, “The Canadian National Retirement Index”,  by MacDonald, Moore, Chen and Brown in Canadian Public Policy. It uses the Statistics Canada Life Paths Model to forecast the incomes of future retirees. This greatly amplifies, to my mind, the case for expansion of the Canada Pension […]

Cut CPP to Cut the Deficit?

Jeremy Leonard, research director of IRPP, suggests in today’s Globe that CPP retirement benefits be cut to balance the federal books, or at least he is cited to that effect by Barrie McKenna. “That doesn’t mean there aren’t major savings to be wrung out of spending. Mr. Leonard, for example, suggested that reforms to the […]

The Pensions Debate

My new colleague Chris Roberts has prepared an analysis of the pros and cons of the Canada Pension Plan and  the proposed Pooled Registered Pension Plans. The following is taken from the introduction: “Pooled Registered Pension Plans are privately administered workplace pension plans similar in many respects to a defined contribution (DC) workplace pension plan, […]