Looking after ourselves

Re: Expand CPP, letter to the editor, Jan. 13. CUPE president Mark Hancock writes that we should expand the CPP on the basis of the lack of voluntary savings from private individuals. Surely he’s aware of the substitution effect, whereby the presence of governmentmandated savings schemes operate to the detriment of any private, voluntary savings? With money being funnelled out of our pockets into mandated savings, surely it’s no surprise that many of us don’t have much left for our TFSAs and RRSPs?

Perhaps most telling is his dismissal of the Fraser Institute’s focus on individualized, voluntary savings as “a fools’ errand,” demonstrating the unflattering opinion held by many biggovernment advocates about Canadians and our ability to look after ourselves.

Granted, mistakes will be made, but these are a vital part of the learning process. Safety nets should be available to rescue people who make mistakes — not to protect people from making mistakes (and learning from them).

Johan Lee, Toronto.

The main reason to expand the CPP is that we get tremendous efficiency gains from the CPP. The key challenge is protecting yourself from the risk that you’ll outlive your retirement savings, because you don’t know how long you’ll live. Will you live to 75? 95? Longer?

Defined- benefit pensions have become far less common over the last two or three decades, shifting this risk from employers to individuals. The CPP is one of the few remaining sources of guaranteed retirement income. It’s simply more efficient to expand the CPP, instead of having everyone try to save a million dollars or more in their RRSP and TFSA accounts. On our own, we each end up either saving too much ( most of us aren’t going to live to 95!) or too little.

Russil Wvong, Vancouver, B. C.