Time to work to­gether on re­tire­ment se­cu­rity

The Guardian (Charlottetown) - - OPINION - BY DEB­BIE BOVYER Deb­bie Bovyer is Pres­i­dent, P.E.I. UPSE

Our se­niors are be­gin­ning to fall through the cracks. Many are re­tir­ing while still in debt, and an in­creas­ing num­ber are go­ing bank­rupt, and spend­ing the golden years in poverty.

As Cana­di­ans, we take great pride in our coun­try and our way of life. We value our in­sti­tu­tions be­cause they em­body val­ues such as fair­ness and equal­ity. Much of our iden­tity is tied to the fact that we have uni­ver­sal health care, public ed­u­ca­tion, old-age se­cu­rity and one of the best public pen­sion plans in the world. These in­sti­tu­tions of fair­ness were cre­ated be­cause our par­ents and grand­par­ents de­manded, and worked to­ward, a bet­ter na­tion for all.

The last 30 years have shown us that things are chang­ing in Canada and abroad. Wealth is con­cen­trat­ing in the hands of the few, our cher­ished in­sti­tu­tions are erod­ing, and the credo of “fair­ness for all” has in­creas­ingly been re­placed with “you’re on your own” (YOYO).

Iron­i­cally, it’s our par­ents and grand­par­ents who are now suf­fer­ing at the hands of YOYO eco­nom­ics. The fed­eral gov­ern­ment has con­sis­tently re­fused to ex­pand the Canada Pen­sion Plan (CPP) over the past decade de­spite sup­port from the ma­jor­ity of Cana­di­ans. Our se­niors are be­gin­ning to fall through the cracks. Many are re­tir­ing while still in debt, and an in­creas­ing num­ber are go­ing bank­rupt, and spend­ing the golden years in poverty.

The CPP was cre­ated to en­sure that our se­nior cit­i­zens could re­tire with se­cu­rity and dig­nity. How­ever, the plan should have been ex­panded years ago to keep pace with eco­nomic re­al­ity. The CPP was orig­i­nally de­signed to pro­vide re­tire­ment in­come along with in­come from a sep­a­rate work­place pen­sion and in­vest­ments. How­ever, to­day more than 60 per cent of Cana­di­ans do not have a work­place pen­sion plan, over 50% have not opened a TaxFree Sav­ings Ac­count, and un­used RRSP con­tri­bu­tions are pre­dicted to grow to $1 tril­lion by 2018. Clearly, the YOYO phi­los­o­phy is not work­ing.

What will work, and what Cana­di­ans are sup­port­ing, is an ex­pan­sion of the CPP. One of the rea­sons the CPP is such a suc­cess­ful plan is be­cause both work­ers and em­ploy­ers make con­tri­bu­tions. This is fair­ness, and this is how ev­ery­one works to­gether to build a se­cure fu­ture for all. The CPP is cost ef­fec­tive, and pro­vides more Cana­di­ans with more re­tire­ment in­come than do other re­tire­ment ve­hi­cles. It has lower ad­min­is­tra­tion costs and man­age­ment fees than pri­vate plans, and pro­vides a greater range of ben­e­fits.

The CPP is also por­ta­ble, which means you are cov­ered re­gard­less of whether you change jobs or move to another province. It is a de­fined ben­e­fit pen­sion plan that pro­vides vir­tu­ally all work­ing Cana­di­ans with a se­cure re­tire­ment in­come un­til death. The plan is low risk, se­cure, and in­dexed to in­fla­tion.

Let’s work to­gether to bring back “fair­ness for all” and say good­bye to think­ing that says, “you’re on your own.” Let’s en­sure that the in­sti­tu­tions our par­ents and grand­par­ents cre­ated are not only main­tained, but also im­proved. We owe it to them, to our­selves, and to our chil­dren.

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