Cue the CPP coun­ter­ar­gu­ments

The Compass - - EDITORIAL - Rus­sell Wanger­sky Rus­sell Wanger­sky is TC Me­dia’s At­lantic re­gional colum­nist. He can be reached at rus­sell.wanger­sky@tc.tc — Twit­ter: @ Wanger­sky.

When the prov­inces and the fed­eral gov­ern­ment an­nounced they had reached a deal to ex­pand the Canada Pen­sion Plan, I knew there would be cor­po­rate push­back.

And it didn’t take long in com­ing.

Per­rin Beatty, pres­i­dent of the Cana­dian Cham­ber of Com­merce, was out of the gate pretty darned quickly.

“The an­nounced agree­ment to ex­pand the CPP will ba­si­cally be a form of pay­roll tax which, when it is in full force, will put fur­ther fi­nan­cial strain on Canada’s al­ready strug­gling busi­nesses and on the mid­dle class,” Beatty said.

Blah, blah, blah — shut your cake hole. (That the com­plaint is com­ing from Beatty, of course, is un­in­ten­tion­ally hi­lar­i­ous. He was elected to the House of Com­mons at 22 years of age, de­feated at 43, and now can draw a pen­sion of $70,000 a year for his en­tire life. He prob­a­bly won’t be need­ing CPP sup­port, es­pe­cially be­cause, as Daphne Jen­nings of the Re­form Party pointed out in 1994, “Beatty will col­lect more than $5 mil­lion in pen­sion pay­ments if he lives till 75.” At 60, his yearly take will even be in­creased to off­set in­fla­tion. Ho, ho, ho.)

But get away from the in­di­vid­ual per­son­al­i­ties, be­cause Beatty’s not the only one com­plain­ing — here’s the Cana­dian Fed­er­a­tion for In­de­pen­dent Busi­ness pres­i­dent Dan Kelly, talk­ing to the Globe and Mail: “It is tremen­dously dis­ap­point­ing to see that fi­nance min­is­ters are putting Cana­dian wages, hours and jobs in jeop­ardy and wil­fully mov­ing to make an al­ready shaky econ­omy even worse.”

The pro­posed change, of course, is a whop­ping one per cent pre­mium in­crease, phased in over five years, mean­ing a worker earn­ing $50,000 will pay $25 a month more in pre­mi­ums. Em­ploy­ers would do the same.

The changes also mean that, some time in the fu­ture, newly re­tired work­ers would end up get­ting a few thou­sand dol­lars more a year.

But back to the shut­ting of cake-holes.

If the CPP is chang­ing to make it pos­si­ble for re­tirees to have a lit­tle more money ev­ery month, good. One of the rea­sons they need it is be­cause busi­nesses in this coun­try have spent the last two decades weasel­ing out of their in­volve­ment in work­ers’ re­tire­ment sav­ings to im­prove cor­po­rate bot­tom lines.

Fewer and fewer com­pa­nies are in­volved in re­tire­ment plans for their em­ploy­ees — those that do have plans, spend much of their time mov­ing to de­fined con­tri­bu­tion plans to limit the com­pa­nies’ own fi­nan­cial li­a­bil­i­ties. That means the com­pa­nies pay money into re­tire­ment funds di­rected by their em­ploy­ees, em­ploy­ees who of­ten have lit­tle or no knowl­edge of their re­tire­ment funds and in­vest­ment risk, and who, upon re­tire­ment, get out what­ever’s left after the lat­est mar­ket shift, wig­gle or col­lapse.

Those same em­ploy­ees are sup­posed to take their own sav­ings and plow them into regis- tered re­tire­ment plans. Some do all right — oth­ers don’t. The main win­ners, of course, are fund man­agers and their nev­erend­ing fees.

The new CPP, like the old CPP, may be a de­fined ben­e­fit pen­sion fund, al­beit a small pen­sion. For em­ploy­ers, though, it works like the de­fined con­tri­bu­tions they love so very much: their ex­po­sure is lim­ited to putting money in, not mak­ing sure that any­one ac­tu­ally gets paid. Sim­ply put, busi­ness de­ci­sions helped dig the hole that many re­tirees are fac­ing — and would face even more with­out CPP changes.

Peo­ple have to live, even if they don’t have a gold-plated tax­payer-funded pen­sion.

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