Monday, June 20, 2011

Goodale Speaks Out For Canadian Pensioners

A point that Ralph and other Liberals have been pointing out to Canadians for quite some time now: our growing pension crisis... If anyone thinks lower taxes are more important to Canadians seniors than decent pensions, they are really drinking the wrong kool-aid.

Here's Ralph's take:


In the early days of this new Parliament, some of the most contentious public issues have resulted from collective bargaining disputes between management and labour.

The disruptions at Air Canada and Canada Post are probably the most prominent so far, but there are more brewing.

In each case, the Harper government has been quick – some say hasty – in introducing “back-to-work” legislation. Such an approach provides a short-term political “fix”, but it’s crucial to search behind these disputes to find the real causes.

Pension inadequacy and insecurity lie at the root of much of labour’s anxiety.

Many employers have large unfunded pension liabilities which they have not properly financed over the years. Some, like Nortel, have gone bankrupt, leaving thousands of former employees with only a fraction of what they were promised – or nothing at all.

While preserving elaborate retirement plans for senior executives, there is a trend in some companies to try to lower the boom on employees – like shifting from “defined benefit” pensions to “defined contribution” plans with lower payouts and no certainty.

Worse still, some two-thirds of all employees in the private sector have no company pension plan at all.

These folks will have to rely on government-administered plans – like Old Age Security (OAS), the Guaranteed Income Supplement (GIS) and the Canada Pension Plan (CPP). And that simply won’t be enough for retirement security.

Yes, they can set aside their own individual savings through tax-assisted instruments like RRSPs and TFSAs. But only a small fraction of Canadians do so.

With the retirement of post-war baby boomers now occurring at an accelerating pace, Canada’s pension predicament is only going to get worse. We’re about to have the biggest generation of senior citizens in history.

Time, demographics and costs are all working against us. It’s time to put pensions at the top of the national agenda

post signatureVICTORY FUND

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