Speak up on pensions now or give up

Heather Mallick, The Toronto Star:

Here’s a tip. When Prime Minister Stephen Harper, Finance Minister Jim Flaherty, the government of Alberta and insurance giant Sun Life all agree that a national privatized pension plan is a great idea for your retirement, be very afraid. Feel your fear and let your anger flower.

Because George W. Bush now says his greatest regret is that he didn’t do it. Privatize Social Security, that is. If he had, of course, Americans would today be so poor they’d be boiling twigs for their morning coffee. It’s a terrible idea born of motives Flaherty doesn’t have the courage to make clear to you. So I’ll do it for him.

Your Canada Pension Plan contributions come out of your pay cheque, which is relatively painless because you don’t miss what you never had. Fortunate people have a pension plan to fatten their meagre cat-food level CPP. For the rest of us, it makes sense for Ottawa to hike CPP premiums and benefits, which are rock solid and also provide another gift: You know how much you will have to live on in old age.

But employers don’t want to fork out more money, and big banks and insurers are hungry for the red meat — the cash Flaherty will extract from you via his hanky-spanky PRPP (Pooled Registered Pension Plan) and give to the private sector for investing (for a management fee). In the guise of compassion for Canadians without pension plans and RRSPs (the RRSP holding of the median quintile of Canadians in 2005 was all of $12,000) he’s offering a deal where small firms, employees and the self-employed make RRSP contributions for pooled investments. The contributions are defined, the ultimate pension isn’t. It could be zero. Remember Nortel?

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