Thinking of retiring early? CPP changes may make you think again.

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M. Spector M. Spector's picture

If anybody needs to be convinced how ridiculous it is to mention "greed" and the Canada Pension Plan in the same breath, they only need to contemplate the following facts:

• If you turned 65 in December and applied to start receiving CPP this month, the maximum annual amount you could possibly receive in 2011 is $11,520; but the average amount is about 55% of that.

• If you turned 60 in December and applied to start receiving CPP this month, the maximum annual amount you could possibly receive in 2011 is $8,064. 

M. Spector M. Spector's picture

Meanwhile, the workers' and peasants' government in Bolivia has [url=https://nacla.org/node/6858]other plans[/url]:

Quote:
On December 10, surrounded by union leaders and foreign dignitaries, President Evo Morales promulgated Bolivia's new pension law at the headquarters of the Bolivian Workers Central (COB), the country's militant national trade union federation. The unprecedented and highly symbolic event culminated a four-year negotiating process, during which the COB agreed to suspend its mobilization for higher wages in exchange for comprehensive pension reform.

The new law nationalizes Bolivia's private pension funds, guarantees universal retirement benefits for participants, and makes it easier for workers to access them. Both the COB and the government have called it "revolutionary" and "historic." "We are fulfilling a promise to the Bolivian people," said Morales at the signing ceremony. "We are creating a pension system that includes everyone."

To be sure, Bolivia's new pension plan defies current neoliberal orthodoxy in important respects – for example, by lowering the pension retirement age when at least 47 countries (including France, Japan, and even Cuba), have moved to increase it. "Unlike other governments," says Morales, "Bolivians are developing our own laws without international 'experts,' for the benefit of the Bolivian people."...

Since 1996, Bolivia has operated under a pension scheme based on compulsory worker savings with no guaranteed benefits – a hallmark of the neoliberal structural adjustment policies imposed by the World Bank and International Monetary Fund. Funded entirely by individual worker contributions (at 12.2% of earnings), the system has featured low benefits with long and stable working lives required to achieve even the most minimal pension.

While some 1.3 million of Bolivia's 4 million workers have established pension accounts, only 600,000 (15% of the workforce) have sufficient job stability to contribute on a regular basis. Fewer than 30,000 workers have succeeded in retiring with a pension over the past 13 years.

Informal sector workers – a broad category encompassing merchants, domestic workers, taxi drivers, and other independents, who constitute 60% of Bolivia's economically active population – are largely excluded from the present system. With their irregular and typically low earnings, and private fund managers' avoidance of unprofitable small accounts, few have managed to qualify.

The new pension law will provide guaranteed benefits and allow workers to retire sooner: men at 58 (instead of 60), and most women (those who have three or more living children) at 55. Miners will be able to retire at 56, or as early as 51 with longevity. With an average life expectancy of 62 for Bolivian men and 65 for women, the government notes, the current age criterion virtually guarantees no retirement, especially for workers performing arduous manual labor.

Retirement benefits will increase in most cases, based on the average of a worker's last two years of monthly salaries. After 20 years of contributions, the average worker will receive 60% of this amount, increasing to 70% after 30 years. Anyone who has made contributions for at least ten years is entitled to a pension.

The new system seeks to extend pension benefits to all workers, including those working in the informal sector. Independent workers can contribute on a voluntary basis, with a minimum monthly payment of $14 (around 14.4% of the $97 minimum monthly wage). After 10 years, a worker contributing at this rate would be guaranteed a monthly pension of $68, equal to 70% of the minimum wage. With pension offices slated to open in cities and rural areas throughout each department, the government hopes to enroll 100,000 informal sector workers in 2011.

The key to expanding coverage to workers with no prior savings is the Solidarity Fund, to be financed largely by a 0.5% contribution paid by workers on their earnings and a 3% payroll tax paid by employers. Higher income workers, along with mine operators, will pay an extra surcharge.

 

Roscoe

M. Spector wrote:

Roscoe wants to scrap the Canada Pension Plan and replace it with a system of Welfare for Old People. Instead of people being entitled to receive defined benefits from the fund according to certain rules defined in advance and based on the amounts each individual has contributed, he would like to see a system where you have to beg the Harper government for benefits and prove you're not just "greedy".

• Living with a working spouse under age 60? Sorry, you get a reduced benefit.
• Got an adult child living in your home and helping to pay the rent or mortgage? Sorry, reduced benefit.
• Working at a part-time job for $10.25 an hour? Sorry, you're too greedy. No pension for you unless you quit your job.
• Do you own rather than rent? Sorry, reduced pension.
• Got an RRSP? Sorry, reduced pension.
• Are you entitled to a private pension at 65? Sorry, you're greedy. No CPP for you.

 

I had considered that you are deliberately obtuse but your posts indicate you really believe the fantasies you try to attribute to me. Angry little person needing to find an antagonist - how pathetic.

Yeah, if you are entitled to a well-heeled defined benefits pension like public sector workers, you are greedy to demand OAS and CPP. I deduce your outrage stems from the fact that YOU are likely a greedy double dipper yourself.

I personally have a six figure income in retirement but no pension other than OAS and CPP. I am grappling with public pension options. I can claim full CPP but have not done so. I think I'll donate the OAS to the Sally Ann on a monthly basis and maybe a scholarship with the CPP. I have no need for a few bucks a month from OAS and CPP and I do believe that the pension clawback should be strengthened to make it possible to pay low income pensioners more.

 

George Victor

Musta sold the farm, eh?  Can't imagine a landlord with such altruistic leanings. Anyways, we should all be working from six figures. :) 

M. Spector M. Spector's picture

Roscoe wrote:

I personally have a six figure income in retirement but no pension other than OAS and CPP. I am grappling with public pension options. I can claim full CPP but have not done so. I think I'll donate the OAS to the Sally Ann on a monthly basis and maybe a scholarship with the CPP. I have no need for a few bucks a month from OAS and CPP and I do believe that the pension clawback should be strengthened to make it possible to pay low income pensioners more.

Yeah, I kind of figured that's where you were coming from. Having amassed enough capital to give you a comfortable retirement income from the sweat of others you wish to be admired as the benevolent philanthropist who wouldn't be caught dead taking a public pension. Far better to berate others who need the CPP and OAS as "greedy" in order to make yourself feel all the more virtuous for being independently wealthy without needing a pension and without even having to work. How very noble of you.

Roscoe

George Victor wrote:

Musta sold the farm, eh?  Can't imagine a landlord with such altruistic leanings. Anyways, we should all be working from six figures. :) 

No farm, no landlord either. I still manage the business end of the firm while my son incrementally takes over. My income is mostly dividends from my shares of the firm.

I agree, we all should be earning six figures. Canada need to address its lack of productivity issues. My steady employees all earn over $100k/year and they work for it. We invested hugely in training and a stressless work environment. It has paid off very well.

George Victor

And since you can't possibly expect that all Canadians can match those figures, your appearance here has to be a result of the workings of a mind seeking the applause it cannot expect to find in conventional business circles, that seeks out the more easily impressed.

As M. Spector said:  "Far better to berate others who need the CPP and OAS as "greedy" in order to make yourself feel all the more virtuous for being independently wealthy without needing a pension and without even having to work. How very noble of you. "

Laughing 

Actually, I've known children who pull the wings off flies who graduate to your level of stability.

Fidel

People like Roscoe tend to believe that if they can do it, everyone can. I think they actually have fairly high opinions of people and their potential in general. In their minds they think that if people don't do what they've done, well they just haven't tried or worked hard enough.

As for myself I really do think that being "successful" in a capitalist system - make that semi-capitalist setup of sorts - has more to do with life chances. Perhaps life chances are not as much the factors as they were during Dickensian era England or even Canada in the 1930s or whatever. But even today, life chances have a lot to do with rising above mediocrity and poverty as socialists sometimes say about it. From each according to his ability, to each according to his need. We need a system designed around people's needs and mankind in general.

josh

A chilling proposal (however unlikely) for state public employees in the U.S.:

"Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.

Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.

. . . .

Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.

Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state's bonds could suffer, possibly ending up at the back of the line as unsecured creditors."

 

 

http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html?_r=1

Roscoe

I partly agree with you, Fidel. With respect, unless you have walked the walk rather than conjure what "people like Roscoe tend to believe", you have no idea what makes or breaks 'people like Roscoe'. I believe your statemment that: "In their minds they think that if people don't do what they've done, well they just haven't tried or worked hard enough" is the default position for those who have never tried at all.

What does "people like Roscoe" mean?

 I do agree with you about 'life chances', however. Its more about luck than good management to be in the right place at the right time to seize an opportunity but after the initial opportunity, luck, or life chances have little to do with success or failure.

Roscoe

George Victor wrote:

And since you can't possibly expect that all Canadians can match those figures, your appearance here has to be a result of the workings of a mind seeking the applause it cannot expect to find in conventional business circles, that seeks out the more easily impressed.

As M. Spector said:  "Far better to berate others who need the CPP and OAS as "greedy" in order to make yourself feel all the more virtuous for being independently wealthy without needing a pension and without even having to work. How very noble of you. "

Laughing 

Actually, I've known children who pull the wings off flies who graduate to your level of stability.

 

Why can I not expect all Canadians to at least aspire to a more productive future? Investing in future generations by removing barriers to higher education, immigrant credentials and interprovincial trade will pay off in a higher standard of living, economic growth and public revenues to support social programs.

 My appearance here is due to an interest in progressive discussion regarding a better Canada for all. I'm rather surprised by the rancour displayed by M Spector and yourself. Babble has its own share of angry old white men belittling anyone outside their comfort bubble.

 People in my position are not insecure but I do think I've hit a nerve with the self righteous among you who mouth pieties regarding the disadvantaged whilst simultaniously grasping every entitlement they can for themselves. Chardonnay socialists is the term is it not?

 I am quite content to be an anonymous donor and have no need for public approval. Quite by accident while chatting with the local Sally Ann captain, I began anonymously providing airplane tickets for cancer victims who couldn't afford the cost of travel to cancer treatment centers. No one knows but the SA and my wife and I. We prefer it that way but we do feel good for being able to help.

M. Spector M. Spector's picture

Thanks for sharing your "secret" with us. You truly are a saint.

George Victor

Meanwhile, back in the working world, Ontario Municipal Employees Retirement System is trying to shift much of its Retirement System investments from public to private investments...into the much prized (less dangerous) infrastructure, real estate and private equity areas. It also wants control when it invests its money. In NOvember, its "infrastructure arm" , Borealis Infrastructure, temed with the Ontario Teachers' Pension Plan to buy the rights to run High Speed One, Britain's only high-speed rail line (for $3.4 billion)  . OMERS is setting up offices outside Canada to increase its assets outside the country (now about 65 per cent).

Oh, and Michael Nobrega, CEO of the retirement system is "very bullish on Alberta," according to the Globe's Friday story. "The West is getting very strong, and people in Central Canada have to recognize the fact that the power is shifting to the West, because their finances are much better."   He didn't mention that the PM concurs with that sentiment, aiding and abetting oil ventures, pipelines and anti-environmental lobbies. 

Amazing what shifting market fortunes can do to the value systems of collectives.  Or to individuals, eh Roscoe?  America's first billionaire, Carnegie, said in his final days that in fact it would be sinful NOT to give it all away before passing on into the Great Somewhere Else. I'm sure you agree.

Roscoe

What "secret"? In our culture, sharing is the norm. So is investing in young people to assist them in life's adventures. I'm not a saint but I am truly thankful that life's adversities have not turned me into a bitter, angry, resentful person.

 

George Victor

Your sentiments in this line: "My appearance here is due to an interest in progressive discussion regarding a better Canada for all. I'm rather surprised by the rancour displayed by M Spector and yourself. Babble has its own share of angry old white men belittling anyone outside their comfort bubble," and in this: "I'm not a saint but I am truly thankful that life's adversities have not turned me into a bitter, angry, resentful person," demonstrate that you chose just the right family/social group/geographic area to be born into, enabling you to turn those "adventures" (facing youth) into an adversity-conquering demonstration of Godliness.

Such silly people run from exposure to the reality of the majority hereabouts. And I'll bet your exit from any discussion of Earth's environmental degradation would see you posting a record speed.  

Roscoe

George Victor wrote:

Meanwhile, back in the working world 

Our normal workday is 7am to 7 pm plus travel time if required. What is the norm "in the working world"?, George? Your ideological bias is getting rather mouldy. New dogma should freshen it up a bit.Laughing There is no "free lunch".

George Victor wrote:

Amazing what shifting market fortunes can do to the value systems of collectives.  Or to individuals, eh Roscoe?  America's first billionaire, Carnegie, said in his final days that in fact it would be sinful NOT to give it all away before passing on into the Great Somewhere Else. I'm sure you agree.

I would be very leary of shifting market fortunes, George. I note that the CPP had a return of 10.4% last year but the transition to a more agressive strategy by the big PP administrators is fraught with danger for the beneficiaries. An article about Sweden's public pensions points out how pensioners are increasingly on the hook for "shifting market fortunes".

 

Quote:
Swedes contribute 18.5 per cent of their pay to the system: 16 per cent to the NDC and 2.5 per cent to a private account where money is invested in mutual funds of their choice. The public pension is a significant portion of retirement income - responsible for 75 per cent of the average monthly benefit for men at 17,000 Swedish kronor ($2,562 U.S.) and women at 12,000 kronor. The rest comes from occupational pensions negotiated between companies and unions.....

 

.....Perhaps the most controversial aspect of the plan is that it shifts the burden of fund shortfalls onto pensioners - though there is a basement for how low benefits can fall, at 7,000 kroner a month. And as the crisis proved, that burden can be significant.

 

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/in-sweden-pension-problems-are-so-1989/article1878540

 

As I've mentioned before, incrementally raising the CPP contribution rate is the optimal solution. I also believe that increasing employer contribution levels from the present 1/1 ratio will be attractive as a perk, if you will to employees.

I do agree about giving away wealth, rather than inheritance with the caveat that it is not always simple to break up wealth attached to an active business. Strategic partnerships with lenders, insurers and bonding entities are predicated on certain equity participation protocols.

 

George Victor

Roscoe: "Our normal workday is 7am to 7 pm plus travel time if required. What is the norm "in the working world"?, George? Your ideological bias is getting rather mouldy. New dogma should freshen it up a bit.Laughing There is no "free lunch". "

 

Oh I know all about the Protestant work ethic, Roscoe. And I know you have to compete like hell to keep the head above water in the business world you inhabit.

But you refuse to acknowledge the existence of people who can only aspire to work if you folks provide it. And there are vast areas of Canada where capital is just never going to go to provide employment...Oh, I know, the lazy beggars could migrate, but even you will admit - in your more sensitive moments - that that is not possible for very many. And you do not even attempt to incorporate them in your world view (yes, it's all there in the Globe and Mail). And you never will do more than relate to the world that gave you a six-figure retirement income.

When you can even begin to relate to the lives of those other people, and begin to discuss a way out for them - and us - in an ever-more-hungry world, there'll be those on a progressive board who try not to write you off as just a self-satisfied Christian who conspicuosly consumes AND does the feel-good work for a few.

But perhaps you take M'lord Black's old National Post and all of this is just a game?

Roscoe

Relate, George? How do you presume lecture me "the existence of people who can only aspire to work" or anything else based simply on my income? You know nothing of the adversities I've overcome to earn that income.

How does a smug, condescending life-long recipient of priviledge become so secure in their biases that they can so easily condemn others who do not fit into their narrow ideal.

Rather than lecture me, why don't you provide some details of the contributions you make to a better society - contributions other than the benefit of your opinions, of course.

Roscoe

George Victor wrote:

But perhaps you take M'lord Black's old National Post and all of this is just a game?

Since your presumptions know no bounds, why don't you simply tell me what my opinion is, George?

Or, you could attempt critical analysis, review my posts on the CPP and deduce what I may think of a person who pillage a failing company's pension plan to fund his own extravagances.

Somehow, I think the latter option will run against the grain and not provide fuel for your prejudices.

George Victor

Post #67: "But you refuse to acknowledge the existence of people who can only aspire to work if you folks provide it."

 

For many months and threads, now, I've argued that it will first be necessary to make sure that the Guaranteed Income Supplement is sufficient to meet the needs of those who have little or nothing in the CPP kitty. That was not even mentioned by labour or Jimmy when he got Alberta and Quebec onside. We have to talk structural change, Roscoe, even as the uber-conservatives begin again to talk Guaranteed Annual Income. And all of this is discussed against a background of growth of production and consumption which promises to leave bugger all for the grandkids...and this has been discussed in various threads over the years here.

Oh I know, it's just talk for a fella who has actually wrested it all from a competitive world... but some of us did that too, and concluded that it's not doing anything but surviving in the face of an obvious need for change...change in our relations to Earth, and with each other. Most here would agree that the objective should be sustainability. The task is to develop the means to achieve that. But go back over some of the threads and see for yourself, before you take up the lecture again. Please. It's not only my "presumptions (that) know no bounds," .(..a marvelous takeoff of Lady Barbara ). :)

Roscoe

Uber-Coservatives are no different than uber-socialists, George. You must know that. George Orwell - 'all animals are equal but some animals are more equal than others'.

It matters not whether the rightists or the leftists control the levers of power other than the fact that 'their' followers will prosper on the backs of the general populace.

In the flurry of populist semantics, I didn't notice any declaration of support for the great unwashed by you. Other than your greatly valued opinions,of course. Could you be more specific in your contributions to humanity?

All you do is complain. Very generic complaints but still complaints without any effort to address solutions.

Thank you for your conversation  and good day.

George Victor

quote:" In the flurry of populist semantics, I didn't notice any declaration of support for the great unwashed by you."

 

 

That's probably because you are a very selective reader, and overlook, i.e. in post #70 : "For many months and threads, now, I've argued that it will first be necessary to make sure that the Guaranteed Income Supplement is sufficient to meet the needs of those who have little or nothing in the CPP kitty."

 

You are turning into a tiresome troll, Roscoe.

Maysie Maysie's picture

Roscoe and George, dial it back the both of you.

And if everyone could refrain from using despicably classist terms such as "the great unwashed" that would be great. This is a warning.

George Victor

Great Gaia, Maysie, I thought that post #70 - a week ago - was a model of temperance and eruditionWink...I even complimented old/young Roscoe on his posting.  (The "average masses" was agreed to be an acceptable term for the social lacuna in PC vocabulary.)

Roscoe

Hm. I have a habit of sardonic references to Victorianisms that highlight the contemptuous attitude of modern elites to the plight of the, may I say 'hoi poloi'.

I must now add 'despicably classist terms' to my collection of more contemporary phrases that highlight the love of pedantry by the more literal among the politically correct.

George Victor

quote: "...may I say 'hoi poloi'.

I must now add 'despicably classist terms' to my collection of more contemporary phrases that highlight the love of pedantry by the more literal among the politically correct."

 

Double "l" in polloi, Rosc... whatever you aspire to. Your vocabulary obviously isn't up to working up a fair summary of the needs of those folk in their retirement.

 

 

Boom Boom Boom Boom's picture

Off-topic (sorry):  my employer* advised me last week that my life insurance - paid by the employer and worth a very tidy sum to my beneficiaries - is coming to an end when I turn 65 in a few years. I was shocked - I didn't know it was 'term' insurance instead of 'whole life'. I did some digging, and discovered this is common practice for term insurance to be offered in employee's benefits packages. I'm trying to find out if 'term insurance' can be converted to 'whole life' but I suspect there may considerable cost to me involved if I go that route.

Anyone have experience converting from 'term' to'whole life'?  I was sort of hoping I could borrow against the policy in the inevitable health crisis, especially as I get older.

 

 

 

*yes, Virginia, the Mob does insure its personnel. Innocent

George Victor

It is one of the many reasons why 89 per cent of life insurance policies are never paid out, Boomer.  I hope "the Mob" does provide you something in the way of pension at age 65. 

Boom Boom Boom Boom's picture

Yes, indeedy - disability pension until 65, then "company"Innocent pension afterwards.

 

George Victor

You have it made in the shade, Boomer. Now let's all work like hell to preserve Tommy's concept of public medicine - the NDP, like rabble, can use donations at this time to get some air time this spring.

Boom Boom Boom Boom's picture

Not so, George.  I'm barely getting by on my disability allowance, and one medical crisis will totally do me in.  I'm wondering how to repond to that note I got - I'm worth almost a quarter of a million dollars to my beneficiaries if I die before age 65, and not much afterwards (just my home).

Once I turn 65 in just a couple of years, what happens to that money (almost a quarter million) in my term insurance? Does it revert to the insurance company or to my bosses who took out the policy?  I'm totally flummoxed by all this.

George Victor

Let's PM this Boomer.

Maysie Maysie's picture

Roscoe wrote:
 I must now add 'despicably classist terms' to my collection of more contemporary phrases that highlight the love of pedantry by the more literal among the politically correct.

Wow I haven't been called politically correct for a few weeks now. Thanks for keeping up the tradition, Roscoe. Whatev.

Yeah, as shocking as it might be to you Roscoe, calling people "the great unwashed" is offensive. It's not allowed on babble, and if you read the babble policy you would at least be aware of that.

And it's called classism when you do it. Don't do it anymore. That's warning #2. 

........

If this thread could get back on topic my heart will overflow with joy.

ygtbk

Almost on topic: Flaherty hints at raising GIS. See:

http://www.ottawacitizen.com/news/Flaherty+hints+raising/4207520/story.html

Note that the feds can do this unilaterally (given support in Parliament by one other party, for instance the NDP), unlike CPP/QPP changes which require agreement of 2/3 of the provinces with 2/3 of the population.

George Victor

Must be election time, eh?   Of course, it's most likely to appear as part of an odiferous  package of proposals,

George Victor

"Most Canadian pension funds are rallying behind the proposed merger between TMX Group Inc. and London Stock Exchange Group PLC," writes the Globe's financial services reporter, Tara Perkins, today. LSE would wind up owning 55 per cent of the merged company.

The Ontario Municipal Employees Retirement System, the Ontario Teachers' Pension PLan,and the Canada Pension Plan Investment Board would find lower trading costs and corporate access to capital.

"While they are concerned about national interests, sources say it would be hypocritical to have a nationalistic attitude when they are actively doing takeovers abroad. In recent years, Canadian pension funds have become a major force on the global deal-making stage. (my emphasis) Some Canadian banks are opposed to the merger, "highlighting the divide that is growing within the financial community," according to Perkins.

Boom Boom Boom Boom's picture

Our Golden Age/50+ club just joined the FADOQ network. They're petitioning the gov't right now to make the OAS automatic on reaching 65 (or 67?). Right now, you have to ask for it.

On the "About us" page:
Since it was founded in 1970, the Réseau FADOQ has won countless battles to defend the rights of seniors and come to the assistance of the less fortunate. The Réseau has also implemented a broad range of services, programs and sporting and recreational activities to make aging a healthy and fulfilling part of life. Our organization has also established a basket of discounts and privileges over the years to help members make ends meet and make the most of the little things in life.

ps: why no "seniors" forum on babble???

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