Pen­sion plan must be com­pul­sory

Toronto Star - - TORONTO STAR -

Re Your vote: A bet­ter CPP or big­ger TFSA, not both, Sept. 29 Adam May­ers is right on the money with his com­ments that “the CPP works be­cause it is not vol­un­tary” and vol­un­tary sav­ings plans like the RRSP and the TFSA usu­ally don’t work be­cause we do “not have the dis­ci­pline to con­trib­ute.”

In my lengthy ca­reer as a char­tered ac­coun­tant and cer­ti­fied fi­nan­cial plan­ner, I have met with many peo­ple who in­di­cated that they sim­ply can­not af­ford to con­trib­ute to a long-term sav­ings plan such as the RRSP or TFSA. Cu­ri­ously, I have never met a sin­gle per­son who in­di­cated that they could not af­ford to pay their CPP premi­ums. Why do you sup­pose that is?

I sus­pect it is be­cause they have no choice in the mat­ter. CPP premi­ums are ei­ther col­lected sight un­seen by the em­ployer, or buried in the com­plex in­come tax forms of the self-em­ployed. Ig­no­rance is bliss. All of the suc­cess­ful pen­sion plans — CPP, OMERS, teach­ers, po­lice, fire­fight­ers, civil ser­vants — all have a com­mon thread: par­tic­i­pa­tion is com­pul­sory, and premi­ums are hid­den.

If Cana­di­ans need a bet­ter pen­sion plan, the best bet is an en­hanced CPP or a pro­vin­cial plan as pro­posed by Kath­leen Wynne. There is no need to add another vol­un­tary plan to the ex­ist­ing RRSP and TFSA op­tions. Vol­un­tary plans as pro­posed by the fed­eral Con­ser­va­tives are doomed be­cause of the weak­ness of hu­man na­ture.

To be as suc­cess­ful as the ex­ist­ing CPP, any new plan must be com­pul­sory.

Are you lis­ten­ing, Stephen Harper?

H. Paul Ras­tas, Oril­lia, Ont.

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