WhatFinger


Last year Canadians contributed $31 billion into public sector pension plans, $34 B into RRSP’s and another $37 Billion into the CPP plan.

CIBC provides startling commentary on pensions



The announcement from a summit on pensions in New Brunswick today on recommendations for the Canada Pension Plan from the head of the CIBC was very shocking.
It is surprising that a bank that counts on Canadian investors to fund its profits would suggest that Canadians need to find an alternative to the services that it offers. Especially an alternative managed by the government that will direct cash flows away from its business. The CEO was correct to point out that the country has a urgent pension crisis; one that is accelerating since the baby boomers started turning age 65 two years ago. This demographic tsunami is very dangerous and its effects could leave Canada with very slow growth for years to come. We could potentially see our stock markets dive into an extended period of very low growth or even deflation. The big risk is that we end up like Japan where the stock market has collapsed by over 75% during the past two decades. Now spending to support its aging population means that the debt to GDP ratio is over 230%, and in this year alone, almost 50% of all government spending was financed by debt.

Support Canada Free Press


Traditionally, over the past few decades, Canadians could count on defined benefit pensions to provide them with income security in their retirement years. These plans have collapsed in the private sector and the remaining growth in the public sector is no longer sustainable. The number of private sector employees in defined benefits plan has dropped to 1.5 million in 2011 from 2.1 million in 2006. On the other hand, the public sector pensions have seen increased membership rising to just short of 3 million from 2.5 million in 2007.(i) Major companies including RBC(ii) have wound up their plans or closed them to new employees, as they have seen the risk of future funding increases. A recent survey of the Canadian Financial Executives Research Foundation(iii) found a majority of companies saw these pensions to be substantial risks and they are closing them down to new employees. Governments have the same risk and costs associated with their pension plans but they have been able to count on funding from taxpayers to support them. There is a large gap that exists between those Canadians who will have a secure retirement funded by defined benefit pensions and those who will count on the stock markets to provide their retirement income. Last year Canadians contributed $31 billion into public sector pension plans, $34 B into RRSP’s and another $37 Billion into the CPP plan. Bill Tufts - Founder and Executive Director, Fair Pensions For All (i) Statscan – Cansim Table 280-0014 (ii) globalnews.ca/ (iii) hrreporter.com/


View Comments

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.


Sponsored