OhGreatGuru wrote:Oh Dear. Let the scare tactics begin.
A universal pension plan is social policy, so there's nothing nefarious about appointing someone with a strong social justice background to spearhead the project. In fact you need someone to defend the long-term societal benefits against all the inevitable opposition that will come from short-term thinkers who don't care that Canadians aren't saving enough for retirement, nor that future taxpayers will have the problem of how to support them in their old age as a consequence. (The same bunch who have obstructed expanding CPP)
Scare tactics? There is when a) you're using it as leverage for an expanded CPP; b) it will not provide a full benefit until 40 years after its planned 2017 inception; c) when it seems like a reponse to a grandstanding lobby of about-to-retire types who will get no benefit (but who have Moses Znaimer, late of Much Music, as their patron).
Under our current system, OAS/GIS does a pretty good job. Not a fantastic one. If we want to increase the wages of poverty, we can do it through taxes for more OAS/GIS, and set the OAS clawback lower for affluent retirees, to share the wealth. In our Hobbesian society, we durst not request of the seniors lobby that entitled seniors give up rights wrested from the Sovereign at Runnymede.
But that issue never came up.
Another issue that never came up is workless youth. They are likely to have spotty employment records 40 years hence. So the new benefit will likely force them to reliance on whatever form of GIS exists in the future.
The Sons and Daughters of the Greatest Generation Ever were never frugal, unlike their Great Depression parents, and so racked up bills to pass onto their children, and their children's children, in the form of deficits and free lunches for education and health care. And now they still want to foist the bill on their children, and their children's children.
But that issue never came up.
This whole scheme is a silly dodge that plays to middle-class anxieties -- but won't resolve them, not now, not in 40 years.
But that issue never came up.
Boomers were stuck in the Hotel California.
We don't, repeat, we don't have a pension crisis in Canada. What we have is a bunch of people who spent too much buying houses and not saving. It doesn't matter for the poor: they rent. It doesn't matter for the rich (those making over $64K) because they either have corporate/government pensions or were smart enough to use the RRSP alternative.
It matters for the 40% of the Ontario population who make more than $30k but less than $64k. Will it help them? In 40 years time, yes, if they have a continuous job history.
Will it help them now? No. Not at all.
This is an entirely spurious initiative. Yes, sure, we need to reform workplace pensions, because increasingly only civil servants are getting them. Yes, certainly, we need to reform contribution rates, so that civil servants are equal payers. Yes certainly we need to look at target benefit plans, so that employers and employees share the investment risk -- to avoid another Nortel pension mess.
An Ontario CPP doesn't do this.
Even an improved CPP doesn't do this.
This is going to be a long and painful process whereby workers come to understand that deferred compensation is just that -- not a company freebie but a tax on current wages.
It's quite simple math. But it's going to make for a quite controversial change in the discourse of collective bargaining and, indeed, of politics. Honesty might intrude, at very long last.
In the interim, what we can best do to prevent near-retirees from losing their houses, their cars, their snowmobiles and their travel plans is not to go through the legerdemain of promising them something they will never get, but to get them to face the facts. Absent a pension/lifetime savings, you're going to have to cut your debt, liquidate assets, freeze your spending.
Because this is the reality of OAS/CPP/GIS, which will replace roughly 40% of your salary up to the average wage of $52,000.
That's your fate: $21,000 a year. Live with it.
The politicians can't fix it, certainly not right now.