Election Issue: Pensions

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Week One is done, good readers,

Now on to week two. If you've noticed, I've posted a poll on the right hand side of my blog. If you like, please consider voting (It's good practice for doing your democratic duty on May 2nd). I'll probably change the poll next week to keep things fresh. As well, of there's a topic you'd like me to cover, leave a comment and I'll try to get to it. I want to know what you're interested in knowing about.

So, what's our topic today? Pensions! Of all the topics I'll talk about on this blog, "pensions" is probably the one I'm least interested in. While it's important for me to start thinking about my retirement and my retirement savings, that time of my life just seems so far away. Nonetheless, if the parties are going to continue to talk "family," pensions definitely fit into the conversation. So, let's get to it!

Liberal Party of Canada: CPP and SRO

      The Liberal Party has called for an expansion of the Canada Pension Plan (CPP) by gradually increasing the defined benefits of the core CPP. As well, they are proposing a Secured Retirement Option (SRO) that is a voluntary supplement to the CPP and can allow individuals to save an additional 5-10% of their pay in a fund backed by the CPP. It would be fully portable between jobs.

      Pros: Works with a current system so as to decrease the costs of creating new programs. The SRO allows workers to contribute to a plan that follows them throughout their careers from employer to employer. It also provides an alternate way for small to medium businesses to provide pension plans that aren't prohibitively expensive for employers. 

     Cons: Criticisms of the SRO are that these new "options" do little to help those who don't already open Registered Retirement Savings Plans (RRSP) seeing as the SRO is basically just a government-run RRSP.

New Democratic Party: Double-Double

      The NDP have proposed to double the Canada Pension Plan and the Quebec Pension Plan (CPP/QPP). As well, they want to change federal bankruptcy laws to make pensioners (and those on long-term disability) the priority creditors if a company goes bankrupt.

      Pros: It enhances the CPP and QPP to an extent that tangible changes could 

actually be seen. As well, it safeguards the most vulnerable if a company collapses.

      Cons: It's expensive. And will only get more expensive as the baby boomers retire and the population gets older. By protecting pensioners and those on disablity through bankruptcy laws, it does little to protect current employees who are still contributing to a pension plan. What happens to those workers who lose their jobs and their pension?

Conservative Party of Canada: Budget 2011

      So the Conservatives have not said a lot about pensions. Most of what I found from the party was included in Budget 2011, which would have failed if the government hadn't fallen on contempt. The budget calls for an elimination of the mandatory retirement age. It also indicates that more meetings are need to look at how the Canada Pension Plan (CPP) could be enhanced. It implies modest enhancements to the CPP, but really only entails further discussion. As well, it promotes a Pooled Registered Pension Plan (PRPP) which is a voluntary plan employers and employees can contribute to.

      Pros: To be honest, it's hard for me to determine pros and cons on a topic that I know so little about. This plan allows workers who want to work longer, and are able to work longer, do so. As well, if offers more options for individuals to choose from in order to secure their retirement. It also provides a method by which the CPP could be enhanced to help more people.

      Cons: From what I gather, PRPPs aren't guarenteed, aren't transferable between jobs, and are not indexed to inflation and cost of living. As well, modest enhancements to the CPP may not be enough to address inherent problems with senior poverty rates and preparing Canadians for retirement.

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