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 example, John Robson writes in […]
Read moreThe 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 papers by Michael Wolfson – former […]
Read moreStatscan 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 group.) This is important because […]
Read moreHow 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 eliminate DB plans is a […]
Read moreThe 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 share. Time and again, opinion […]
Read moreThere 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 Plan and public pensions generally […]
Read moreJeremy 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 Canada Pension Plan could achieve […]
Read moreMy 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, or group Registered Retirement Savings […]
Read more(Ben and Nick Rowe correctly pointed out that I goofed in the calculations in the earlier version of this post, which I have deleted and replaced.) How much money do I need for a secure retirement? That is the question many baby boomers are asking themselves. The short answer is, a lot, at least so long as we have to […]
Read moreJeffrey Simpson seems to favour the sensible option of CPP expansion, but also wants to raise the CPP retirement age. “Curiously, there seems to be an aversion among governments to easing future retirement costs by raising the age of retirement. Australia, France and the United States have already done so, lifting the age for future receipt of public pensions. Other […]
Read moreFlaherty’s proposed new pension vehicle bears a remarkably close resemblance to that put forward by Frank Swedlove of the Canadian Life and Health Insurance Association to the IRPP pensions conference. (I guess he wins the prize for most influential presentation. I put the case for CPP expansion, while Bill Robson argued for not doing very much at all.) I gather […]
Read moreHere are the CLC’s Q and As re proposed Pooled Registered Pension Plans. Basically they are like group RRSPs, but sponsored by a financial institution with a fiduciary responsibility as opposed to an employer. They may be somewhat lower cost than individual RRSPs, as with current group RRSPs. However, there will be a lot of such plans, with different investment […]
Read moreIn a carefully timed intervention coming shortly before Finance Ministers meet to discuss retirement income reform, the Canadian Federation of Independent Business today released an econometric study by Peter Dungan of the University of Toronto on the economic impacts of the CLC proposal to double the Canada Pension Plan replacement rate, The CFIB regards CPP premiums as job-killing payroll taxes. […]
Read moreFrom time to time, I check out the The Real News Network. I’ve just finished watching a video clip they’ve featured on labour protests in France over the government’s attempt to raise the “pension age” from 60 to 62. The coverage includes a brief look at the impact of the blockades of French oil refineries. I’m struck by how powerful the French […]
Read moreI could not make head nor tail of the unsourced numbers in last week’s National Post editorial on the Canada Pension Plan (CPP): If workers were able to take the more than $3,000 they and their employers pay into CPP on their behalf each year and invest it in a conservative private fund, at the end of their working lives […]
Read moreOn Monday, Catherine Swift of the Canadian Federation of Independent Business (CFIB) was on TV expressing outrage that doubling the Canada Pension Plan (CPP) would entail mandatory contributions equal to 20% of earnings. Her logic is that a self-employed person currently contributes 9.9% of pensionable earnings. That figure doubles to 19.8%. This argument misses a couple of points: Employees Pay Half […]
Read moreFurther to my earlier post on the IRPP pensions conference http://www.progressive-economics.ca/2010/05/12/still-more-on-the-pensions-debate/#comments an excellent (albeit highly complex) power point presentation by Michael Wolfson has recently been posted. It can be found in two parts on the IRPP web site at http://www.irpp.org/indexe.htm Wolfson, who now teaches at the University of Ottawa, recently retired from the position of Assistant Chief Statistician at Statistics […]
Read moreLast week I attended what turned out to be an excellent pensions conference organized by the Institute for Research on Public Policy (IRPP). It was a behind closed doors, Chatham House rules event which stops me from blogging too freely, but several of the presentations have now been posted to the IRPP web site. The audience was mainly policy wonks, […]
Read moreThe Canadian Bankers Association are deeply opposed to meddling with a pension system which they say is working just fine. Which is understandable, albeit self-serving, given their dominance of the high fee mutual fund industry and the significant profits earned on spreads between low interest GICs and bank lending. The banks do just fine out of leaving individuals without decent […]
Read moreI have just returned from Calgary and the pension forum organized by Jack Mintz through the University of Calgary. Mintz was, of course, the author of a recent research report to the federal and provincial finance ministers which concluded that the status quo was basically working well, except for a modest proportion of middle income earners who may not be […]
Read moreYesterday, the C. D. Howe Institute released a brief estimating how much Canadians at various income levels would need to save, through pension plans or individually, to provide various levels of retirement income. Since the Canada Pension Plan tops out around the average industrial wage and Old Age Security is clawed back from higher incomes, those who make more money […]
Read moreSTEERING COMMITTEE OF PROVINCIAL/TERRITORIAL MINISTERS ON PENSION COVERAGE AND RETIREMENT INCOME ADEQUACY OPTIONS FOR INCREASING PENSION COVERAGE AMONG PRIVATE SECTOR WORKERS IN CANADA EXECUTIVE SUMMARY This paper released by BC Finance Minister Colin Hansen for the provincial/territorial ministers indicates much more fundamental problems with our pension system than those identified in the Mintz Report and gives serious consideration to the […]
Read moreOn the eve of the Whitehorse meeting of Finance Ministers in December, the Howe released a report co-authored by Bill Robson which charged that the federal government’s pension plan liabilities on behalf of its own employees are greatly under-stated – to the tune of $58 billion. This sum should, he argued, be added to the federal public debt. http://www.cdhowe.org/pdf/backgrounder_122.pdf As […]
Read moreFurther to my earlier post on the Mintz report on pensions http://www.progressive-economics.ca/2009/12/20/the-mintz-report-and-the-pensions-debate/ Statistics Canada have released the major study on income replacement rates in retirement by Yuri Ostrovsky and Grant Schellenberg which was cited at some length by Mintz. http://cansim2.statcan.gc.ca/cgi-win/cnsmcgi.pgm?Lang=E&AS_Abst=11F0019M2009321&ResultTemplate=/Stu-Etu/Anal_RchAbst The study looks at the incomes of retirees in their early 70s in 2006 in relation to their earnings some […]
Read moreI blogged back in August to express some concern about the implications of Jack Mintz’s appointment as research director for the federal and provincial finance minister’s review of the Canadian pension system. http://www.progressive-economics.ca/2009/08/06/jack-mintz-research-and-pensions/#comment-20646 .  Suffice to say now that the general thrust of his report, tabled this week, http://www.fin.gc.ca/activty/pubs/pension/riar-narr-eng.asp , did not come as a great surprise to me. (The […]
Read moreMy recent post on doubling the CPP - http://www.progressive-economics.ca/2009/10/26/double-the-canada-pension-plan-benefit/ – prompted some commentary in defence of voluntary as opposed to compulsory savings vehicles. I guess it is reasonable to debate if we should force people – especially those above very low income levels – to save in their own best long term interests. That is, of course, exactly what happens […]
Read moreKonrad Yakabuski wrote a good final piece on Saturday to cap the interesting and informative Globe series on the pensions crisis. In it he touches on several possible policy solutions, including a universal pension plan. http://www.theglobeandmail.com/report-on-business/retirement/canadas-gathering-pension-storm/article1323513/ Unfortunately, he does not cite the Canadian Labour Congress proposal to double the CPP as part of a three pronged effort to fix pensions, […]
Read moreIt is a bit stunning to discover that Jack Mintz – former head of the CD Howe Institute and now at the University of Calgary – has been appointed research director of the federal – provincial review of pensions. http://www.vancouversun.com/business/fp/Jack+Mintz+research+director+pension+reform+task+force/1794203/story.html Even Finance Minister Flaherty should be a bit embarassed to appoint as a “researcher” someone who is so strongly on […]
Read moreThe Economist has recently launched a major attack on public sector pensions, joining the likes of the CFIB and the Howe in Canada who similarly draw invidious contrasts between suuposedly gold-plated public sector pensions and those on offer in the private sector. http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=987105&story_id=13988606 It is true that in Canada, as elsewhere, defined benefit pension plans (which pay out a defined […]
Read moreSome newspapers have paid some well-deserved attention to the multi-million dollar bonuses recently handed to the executives of the Canada Pension Plan Investment Board (CPPIB) after they lost $24 billion of Canadian workers’ pension savings with their investments last year. What has received less attention are the low long-term rates of return that the CPPIB has earned in the ten […]
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