Public sector the CPP winner
Re: Saving CPP From Ontario, editorial, June 20; CPP Deal Punishes Those Who Need It, Kevin Libin, June 22; Casting Doubt On CPP Reform Rationale, Andrew Coyne, June 23.
As the dust settles from the commotion over the forthcoming changes to the Canada Pension Plan, it becomes clear the winner again in the “pension reform” is the public- sector worker. Taxpayers will now be making higher CPP payments and will continue to contribute generously to the public-sector defined- benefit pension plan. Private- sector employees and their employers will also contribute more to the CPP for higher payments in retirement, but the disparity between the two sectors and the guarantee for public-sector pensions continue. Like the privatization of Hydro One, Ontario’s proposed pension plan made no economic or business sense. In large part, both were designed to provide funds for Premier Kathleen Wynne’s pet spending projects. Now the federal government has stepped in, we are stuck with an expensive CPP plan few employees and no businesses actually want. Ontario’s ambitions for a slush fund have been thwarted and the main beneficiary will be the federal government. The revised CPP will reduce the funds Ottawa needs to pay for the actuarially unsound pension plan it provides for its employees. Those of us in the private sector will again foot the bill for really bad governance. Kevin Libin argues that only a person who “require( s) someone to force ( them) to save adequately for retirement” would support enhanced CPP. He has missed the point. The question is not whether you can trust yourself to save, but whether you can trust 30 million of your fellow Canadians to save enough for their retirement. Canadians who do not save enough for retirement during their working years will need to be supported by the welfare system or charity.
Though it may disappoint some, we do not live in a country where old people are allowed to starve to death on the cold streets. Does Libin trust his neighbour to save enough? Even that one with the maxed- out credit cards? Would he prefer to pay more taxes to keep that neighbour alive throughout an impoverished retirement, or have that neighbour pay adequate mandatory pension contributions during his working years?