The president of the Canadian Labour Congress Ken Georgetti writes that, “It is time that we undertake a serious dialogue about pension reform in Canada.”
-“The current reality is that 62 per cent of working Canadians don’t have a workplace pension, and more than a third of working Canadians have no retirement savings at all.”
-“CPP covers about 93 percent of workers, but pays a maximum of about $11,000 a year (or $908 a month).”
-“The median amount in RRSPs for those taxpayers nearing retirement is about $60,000. That’s enough to by an annuity of about $3,000 a year in retirement.”
-“Unionized workers …receive an average pension of about $25,000 a year, a figure which includes both their workplace pension and the Canada Pension Plan.”
-On the other hand, “Canada’s top 100 employers dole out an average pension of $930,000 to their former top executives.”
THE SOLUTION?
“The best way forward is a defined benefit plan where retirees know in advance how much they will receive in benefits. One of the easiest and most efficient way to reach that goal is to improve the CPP. That would provide financial security for people and at a lower administrative cost than RRSPs.”
“Here are some options the CLC is proposing that the government of Canada consider:
1-Phase in a doubling of CPP retirement pensions over a period of 17 years.
2-Increase the Guaranteed Income Supplement of Old Age Security pensions by 15 per cent so that no senior lives in poverty.
3-Create a national system of defined benefit pension insurance, modeled on what exists through the Canada Deposit Insurance Corporation for bank and Credit Union deposit accounts.”
“The Canadian Labour Congress is calling for a national summit on pensions by this fall. So has Ontario’s Premier Dalton McGuinty. The summit should include our federal, provincial and territorial governments and other stakeholders, including the labour movement.”
Ken Georgetti’s opinion piece is at http://www.straightgoods.ca/2009/ViewFeature.cfm?Ref=353.
