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Fair Pensions For All



OUR VISION: A SUSTAINABLE PENSION SYSTEM THAT IS FAIR TO ALL CANADIANS

Brief to Finance Committee on Income Inequality

We were asked to participate in the current study at the House of Commons Finance Committee into income inequality. Here are some excerpts from our submission...
I want to focus today on the government-created inequality of retirement income. We think this inequality should be the primary focus of any Committee effort to correct income inequality in Canada. This inequality has been created by the federal governments, the provincial government and municipal governments across the country. Let’s consider the difference between two accountants. Both started work at the age of 25 and both spent their life doing similar work as accountants. They are now age 60 and would like to retire. One is in the private sector, the other in the public sector. The private sector accountant can’t afford to retire. Her CPP entitlement is $800 a month. She would have to suffer a 30% plus penalty for retiring before age 65. Her net CPP would be less than $560 a month. In addition, she would have a combined OAS and GIS of $956 for a total of $1,500 a month or $18,000 a year. She will have to work at least another 5 years and probably longer to retire. Public pensions are all she will have because her employer doesn’t have a pension plan. There are eleven and a half million Canadians like her – 66% have no employer pension.

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The public sector accountant is going to retire. His employer has a pension plan. It’s a so-called ‘gold-plated’ plan with all the ‘bells and whistles’. His total retirement income is targeted to replace 70% of his final 5 years working salary. A recent report from the PBO office in Ottawa shows federal government expenses supported a workforce of 375,500 employees and provided approximately $114,100 on average in total compensation per employee. He doesn’t have to worry about the CPP penalty. His pension plan has a so-called ‘bridge benefit’. This means he won’t have to apply for CPP until he is 65 because his pension plan will pay him his full CPP entitlement till then so he can dodge the penalty. He’ll apply at age 65 and the bridge benefit will stop. The public sector accountant’s retirement income is about 240% larger than the private sector accountant’s and he is able to retire at least five years earlier! There are 3,000,000 Canadian workers like him – 16% of all Canadian workers. 16% of Canadians, almost all workers in the public sector, are a government-created, ‘rich in retirement’, upper class compared to the 66% of Canadians who have no employer pension at all These private sector Canadians do the same work but get no pension. And, what is even more scandalous and outrageous, these private sector workers are forced to finance these rich public sector pensions every time they pay property taxes, income taxes, sales taxes and the many other government fees and taxes. This is man-made inequality. It was created by you, your predecessors in Parliament and your colleagues in the provincial legislatures and City Halls across this Country. And all political parties are implicated.


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Bill Tufts -- Bio and Archives

Bill Tufts, Fair Pensions For All, founded in January 2009, our goal is to promote an honest and fair analysis of our pension system; to expose abuse and waste within the system; to develops and promote new ideas and concepts on pensions based on fairness for all.

We maintain that it is every Canadian’s right to receive sufficient income in retirement to afford an acceptable quality of life.


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