Pension Reform

WHEREAS Canadians need to better plan and provide for their post-retirement financial security; and

WHEREAS the current Canadian government unilaterally raised the eligibility age for OAS from 65 to 67 without consultation based on its claim that the O.A.S. program was no longer financially sustainable even though subsequent analysis by the Parliamentary Budget Officer and the Auditor General does not agree with this conclusion; and

WHEREAS many kinds of work and work situations (physically demanding work) challenge and undermine the health of the person, such that even 65 is too late for some; and

WHEREAS CPP is a well-run and financially viable pension fund; and

WHEREAS mandatory increases in CPP will increase the financial burden on employers; therefore

BE IT RESOLVED that the Liberal Party of Canada recommend to the next Liberal government that it reinstate the OAS eligibility age to 65; and

BE IT FURTHER RESOLVED that a Liberal government create a Canada Pension Plan Supplement (CPPS) to which all Canadians can elect to make independent supplemental contributions on their own behalf thus more effectively providing for their retirement.

Senior Liberals’ Commission

15 Responses to “Pension Reform”

  1. Maureen Riddle 01. Feb, 2014 at 12:41 am #

    Some circumstances like a vehicle accident or trauma necessitates a pre-retirement person bring unable to work permanently and you then have to take your CPP early because of physical or mental disabilities. No one addresses Canada Disability Pensions.

    CPP disability fund means the full amount you have to live on is $12,300 per annum.

    To qualify for provincial assistance you need to loose your home and have no assets to get any further aid.

    You must prove to the go’vt that you are permanently disabled which is a long arduous process.

  2. Norma Hunt 11. Feb, 2014 at 5:17 pm #

    CPPS – don’t get this. It appears to say it is voluntary. Are we advocating going into competition with banks or other financial organizations offering purchasing retirement products? How would interest rates work, competitive? Just not sure about this. Who implements and maintains the CPPS, The same place that does the CPP?

  3. Patrick Slinn 11. Feb, 2014 at 6:08 pm #

    This comment concerns the last resolution (“…create a Canada Pension Plan Supplement…”).

    Changing the CPP would involve an increase in the very large CPP financial liability of the federal government – even a Liberal finance minister would not want to do this.

    A further problem with creating a supplemental CPP is that the monthly premium is 8% higher than it need be to pay for the current amount of benefits that are being paid out. This “excess” of premium is needed to build up a CPP reserve fund. In simplistic terms, the CPP is not at present fully funded – and a long way from it.

    Independent contributions can be made under recent federal (2012) and Quebec (2014) legislation that enables the creation of Pooled Registered Pension Plans (PRPP). In Quebec the name is Voluntary Retirement Savings Plan. Alberta and Saskatchewan are working on theirs. The CPP is not involved.

    The PRPP enables even small organizations to develop their own pension plan and to pool it with others for economy of scale. The legislation seems to offer such pension structures to self-employed people, commissioned sales agents, partnerships and any other form of corporation. Many such people were not able to have a pension plan before. There is a possibility that premiums will be 8% less than the corresponding CPP premiums because each individual member would be providing only for his own retirement.

  4. Henry Shewfelt 11. Feb, 2014 at 7:04 pm #

    Strong support for the second “be it further resolved” could be eroded by less than complete agreement with the first “be it resolved” which appears somewhat opportunistic and self serving. A supplement to the CPP is so strong that it should stand on its own.

  5. Lois McGrattan 11. Feb, 2014 at 10:09 pm #

    Yes – return the retirement age to 65.

    Yes – offer employees the right to pay more for their retirement….and the fact that this would be of benefit to their taxes might encourage more people to join and contribute more.

  6. Robert Reid 12. Feb, 2014 at 11:09 am #

    You can add to the CCP, so why do we need another?

  7. Christene Daub 12. Feb, 2014 at 12:24 pm #

    Canadians are living longer and need more options to provide for their retirement. Being able to contribute supplements to the CPP is a great way to build one’s pension. The arbitrary change to age 67 to be eligible for OAS definitely hurts seniors who need that income to live in dignity.

  8. Susan Muma 12. Feb, 2014 at 2:26 pm #

    I don’t think making the increase optional is wise. Look a how many save now. An increase has to be mandatory. Perhaps it can happen in stages, but if we want to be able to pay the seniors of the future a decent amount, you have to make any increase mandatory. Is there any other employer tax that might be decreased to enable the increase to CPP?

  9. Sheila Hurley 12. Feb, 2014 at 3:45 pm #

    The option to take OAS at age sixty five should still be available. If seniors are able to continue to 67 or older that choice should also be available to them. There is no way that the government can know that everyone at 65 is well enough to work or able to find employment at that age.

  10. Lois Cooper 12. Feb, 2014 at 7:34 pm #

    Return OAS to 65 years of age.

  11. Dorothy Cruickshank 12. Feb, 2014 at 8:36 pm #

    Be it resolved that the Liberal Party repay the billions of dollars taken from the OAS pension fund, raise the monthly stipend to give those who worked so hard for years the respect they deserve. Words are so cheap. Action is what this Liberal Party should strive for.

  12. Jay Merrin 14. Feb, 2014 at 2:48 am #

    I am writing to state my disagreement with this resolution.

    The CPP should be enhanced to increase pension incomes.

    I entered the financial services industry in 1968. Since that time, the industry has spent billions on advertising, hiring salespeople and advisors, who are/have been highly motivated to help people save for retirement. As well, a press that has attempted to discuss and educate about the subject. Yet, we still have many folks without sufficient funds in retirement.

    I have sat at thousands of kitchen tables and in the offices of small business people talking about retirement savings programs for either themselves or their employees, only to here that old refrain, ” now is not the right time” or “its the employees responsibility to establish their own plans not mine”.

    In talking with many retirees, who were fortunate to have pension plans at work, they often admit, that without the “forced saving”, often when young and when they had children/mortgages, or divorced, that they would not have voluntarily contributed to a pension plan.

    For the majority of people “MANDATORY” savings, money taken off the paycheque provides for the most consistent and successful retirement regime. If voluntary worked, we wouldn’t be having this discussion.

    The CPP provides very low cost professional management. It comes off the paycheque. It continues with the employee from job to job. People who change jobs, don’t end up with a multitude of plans. This is particularly important for the low income earner, where fees can eat up a significant amount of return. The employer is not administering two pension plans, which can be important for the employer with high turnover and perhaps lower paying jobs.

    I would suggest that the amount of pensionable earnings be increased, as well as the percentage of income at retirement.

    The plan should be reviewed to allow greater payouts on death, much like any defined plan.

    If we are really serious about the problem of additional costs to employers and this being an inhibiter —why not get serious about the big “no value” costs to employers like our convoluted/complex tax regulations, or the ridiculous interprovincial trade barriers, that costs the economy billions.

    Is enhancing the CPP a perfect solution, no, but for the majority of Canadians, suggesting another voluntary solution will not work.

    The amount required by people to save is the same, whether that be shared by the employer or funded entirely by the individual, so it comes out of the “economy” , one way or another. If someone needs to save $10 a week and saves it entirely themselves or it is split i.e. 75/25–the $10 still is taken out of the economy today for immediate spending.

    If saving and investing successfully over a working lifetime and then during retirement years was easy, we wouldn’t need this discussion or the others about providing tax relief to keep seniors in their homes.

    A MANDATORY program that forces SAVINGS and generates a reasonable level of income as a base, will insure that our citizens can have a secure income in retirement.

  13. Michael Graham 07. Jul, 2015 at 6:41 pm #

    Of course the Neocon driven PC decision to increase the eligible to 67 must be reversed.

    I just completed an estimate of the monthly benefits I would receive in American Social Security and the figure was $2200 a month (the maximum in Canada is $1850 which is fully exposed to taxes)!

    Also, the first $25,000 of my reported income would not be taxed at all in America… and we are called the “Socialist” country?

    Clearly our entire retirement system is in need of review and revision… how can we tax benefits of retired Canadians with barely poverty level incomes?

    How can we call ourselves a socially responsible country when even the country that demonizes any form of social support as evil is light years ahead of us?

  14. Roland DeLorme 21. Jul, 2015 at 9:44 am #

    Pension income splitting introduced by our present government has been very helpful in easing my tax burden. I hope that it will be protected by a Liberal government.

  15. CLAIRENCE PLOURDE 06. Nov, 2015 at 5:47 am #

    I lost 35 % of my pension with fraser papers in Edmundston NB. Only in Ontario they pay 1000.00 dollars of your lost we need a federal law in the federal pension benefit act pay by the financial institution why they are the problems of ours pension lost, they help company to take ours pension how to do it etc.

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