Harper Conservatives bailed out banks, but is letting your pension die

Harper government bailed out the banks, but they're about to let your pension die.

The following is from the Occupy Canada movement and was posted on August 29th 


"Canada is taking a different tack than Washington on the thorny issue of helping companies fund their widening pension gaps, shrugging off corporate pleas for relief even as the United States lets businesses slash their contributions.

A frightening prospect for workers, retirees and companies, yawning pension deficits have gone from arcane accounting entries to front page news on fears that massive shortfalls could even cause some corporations to fail.

As a growing number of employers look to roll back benefits to the alarm of unions, others are pouring cash into their pensions funds only to see the hole get deeper.

Canada is not unique, and as in the United States, generous public sector pensions are a hot-button issue. But the federal government is taking a more hands-off stance than U.S. President Barack Obama, who signed a bill last month that changes how companies calculate what they must contribute to their pension funds, effectively allowing them to pay less.[..]

Softening the rules implies letting plans stay underfunded for longer, a risk financially prudent Ottawa may be reluctant to accept. After all, the country’s conservative banking culture helped it survive the global financial crisis better than most.

As in other countries, the scope of the Canadian problem is huge. 90% of the roughly 400 defined-benefit pension plans overseen by Canada’s federal regulator are underfunded, meaning they cannot meet their liabilities should their plans be wound up today, as is required by law." - Louise Egan and Susan Taylor, Reuters. -b

The Global Demise Of Pension Plans:
http://www.businessinsider.com/the-global-pension-ponzi-scheme-is-collapsing-2012-8

Canada takes tough stance on pension fund relief:
http://www.torontosun.com/2012/08/03/canada-takes-tough-stance-on-pension-fund-relief

Canada's bank bailout concealed by government:
http://digitaljournal.com/article/323997

More OAS debate

The Illusory Savings of Hiking the Age of Eligibility for OAS, Posted by Andrew Jackson on March 27th, 2012

Former Assistant Chief Statistician Michael Wolfson shows that governments collectively stand to save very little from hiking the age of eligibility for the OAS/GIS.

The math (based on the SPSDM):

In 2011, cutting OAS/GIS from seniors age 65 and 66 would save the federal government $4 Billion.

However, the feds lose $500 million and the provinces $300 million in personal income tax revenues  (since benefits are taxable.)

Plus there is a $300 Million loss in sales and similar indirect tax revenues due to reduced purchasing power,  $200 Million of which would be at the provincial level.

Plus – assuming no increase in employment income and no accelerated draw down on savings – poverty rates for the age group would double, forcing many on to social assistance and increasing other provincial program expenditures.

If the feds cushioned that blow to low income seniors and the provinces by preserving access to the GIS for the most vulnerable seniors “the net effect on the fiscal balances of both levels of government combined – what ultimately matters to taxpayers and the economy – would be essentially nil.”

Re-Engineering the three pillars of Canadian retirement income system

The following is from Workplace Wire and written by the  Heenan Blaikie's Labour, Employment and Pension Practice Group published March 30, 2012 and it makes for interesting reading for those interested in pension issues

 You can read the entire post here: Re-Engineering the Three Pillars

The government has subtly re-engineered the Canadian retirement income system. For the past 45 years, the Canadian system has been described as having three pillars:

(i) Government-sponsored plans. The first pillar has been comprised of the broad-based government run, supposedly universal pension schemes, including Old Age Security, the Guaranteed Income Supplement (“GIS”) and other provincial supplements, and the Canada/Quebec Pension Plans (“Q/CPP”).

(ii) Employer-sponsored plans. The second pillar has been comprised of the employer-provided pension plans, whether defined benefit or defined contribution.

(iii) Individual savings. The third pillar has been comprised of individual tax-assisted retirement savings, primarily through registered retirement savings plans.

More recently, including in its budget papers yesterday, the federal government has conveniently shifted the pillars, because of a glaring weakness in the second pillar. I pointed this out in our March 25, 2010, edition of the Pension Pulse (“Three Pillars: Ten Questions”)

This is not insignificant and should not go unnoticed. Just like the Olympic stadium in Montreal, cracks have begun to appear in our retirement income system and pieces are crashing down. By changing the pillars, somehow our system is made to look stronger and more sustainable.

The three pillars, as described by our federal government, now are:

(i) the OAS, GIS and other provincial supplements;

(i) the Q/CPP; and

(i) all other forms of accumulating retirement savings, including employer pension plans, savings plans, RRSPs and tax-free savings accounts.

I believe part of the reason for the re-jigging is because the old pillar number two, traditionally employer sponsored defined benefit pension plans, are largely defunct, at least in the private sector. By lumping all employer-sponsored plans and private savings into the third pillar, this pillar does not look as weak, relative to the other two. Plus, the new first pillar, being comprised only of the OAS and other non-contributory programs funded exclusively from government revenues, can be treated separately

How Much Will YOU Lose from OAS Deferral?

The following is from the Progessive Economics Forum website and it was posted by Jim Stanford on March 30th, 2012. I have included it here because I was talking to my brother who is not quite 54 and he was not sure how much he would lose in OAS payment when he turned 67.

Announcing a bad policy 10 years in advance doesn’t make it a good policy.

So the fact that the Harper government is giving people at least 10 years to prepare for 2 years of life without an important source of income, hardly makes it OK — as so many media commentators have tritely implied. In fact, in this case it makes the policy even more unfair.

Likewise, the fact that many young Canadians seem to have (wrongly) resigned themselves to the fact that public pensions won’t be there for them when they retire, hardly eases the pain of this unnecessary, destructive measure. Consider this quote from a Gen X-er (a self-employed marketer … sigh) in today’s Hamilton Spectator: ““I was pretty sure any government-funded retirement will not exist for my generation.” That’s a tragic sentiment, both because of its defeatism, and its misplaced lack of confidence in public pensions. Because the clear reality is that it’s private individual retirement plans that will not be there for him. Compared to those Ponzi schemes, public pensions are like the Rock of Gibraltor — especially for precarious workers like our self-employed marketer. If the Conservatives are counting on fatalistic attitudes like that one to allow this policy to sneak through, I hope they’re proven wrong, for two reasons: I want the policy to be defeated, but I want young people today to have more faith and hope in the solidarity and cohesiveness of future society.
Initially, when the OAS/GIS trial balloon was floated by Mr. Harper in Davos, many seemed to think this policy would somehow betray their core constituency among older voters. In reality, of course, the reverse is true. It is precisely the older voters who are protected by this move (anyone over 54 right now will not have their OAS/GIS benefits affected at all). Young people will continue to pay taxes to support those boomers’ pensions, but then will have two years of their own golden age ripped away from them. The most bitter irony of all is that the cost of OAS/GIS (measured appropriately as a share of GDP) will start to decline in 2030 (according to the most recent actuarial review of the program). 

A.     Assumptions and Methods
The monthly GIS and Allowance top-up benefit increases the benefits of lower-income GIS and Allowance recipients. The top-up benefit is reduced by 25 cents for every dollar of income in excess of $2,000 for single individuals and $4,000 of combined income for couples. Based on data provided by Service Canada and the Canada Revenue Agency, the proportions of beneficiaries who would receive the top-up benefit and their average top-up as a percentage of the maximum top-up have been estimated.

The estimated number of beneficiaries who would receive the top-up benefit is split into two groups: those receiving a partial top-up and those receiving a full top-up. This process was done by type of GIS and Allowance recipients, age, and sex. The estimated proportions are assumed to apply for years 2011 and thereafter.

On average, about 38% of all GIS beneficiaries are estimated to be entitled to either a full or partial top-up. The average top-up for GIS beneficiaries is estimated at $40 per month for single individuals and $55 per month for couples in 2011.Actuarial Opinion

In our opinion, considering that this 10th Actuarial Report was prepared pursuant to the Public Pensions Reporting Act:
- the data on which this report is based are sufficient and reliable;

- the assumptions used are, individually and in aggregate, reasonable and appropriate; and,

- the methodology employed is appropriate and consistent with sound actuarial principles.

This report has been prepared, and our opinions given, in accordance with both accepted actuarial practice in Canada, in particular, the General Standards of Practice of the Canadian Institute of Actuaries, and internationally accepted actuarial practice as provided by the Guidelines of Actuarial Practice for Social Security Programs of the International Actuarial Association.

Table 2 Financial Status of Amended Program Number of Beneficiaries (thousands)

Number of Beneficiaries (thousands)				Expenditures ($ million)						Expenditures as a Percentage of GDP
Year	OAS	GIS	Allowance	OAS	GIS	Allowance	Admin Exp	Total	GDP ($ billion)
2011	4,889	1,752	93	29,468	8,729	582	138	38,917	1,641	2.37
2012	5,091	1,820	89	31,290	9,367	577	143	41,377	1,705	2.43
2013	5,289	1,886	86	33,141	9,857	570	151	43,719	1,770	2.47
2014	5,482	1,957	84	35,022	10,391	568	160	46,141	1,834	2.52
2015	5,679	2,028	82	36,987	10,939	571	168	48,665	1,900	2.56
2020	6,782	2,431	79	49,018	14,388	611	222	64,239	2,322	2.77
2025	8,043	2,849	76	64,967	18,703	655	293	84,618	2,820	3.00
2030	9,302	3,260	61	83,981	23,748	589	376	108,694	3,442	3.16
2040	10,507	3,576	52	118,525	32,232	615	526	151,898	5,191	2.93
2050	11,282	3,580	50	159,723	40,202	731	698	201,354	7,702	2.61
2060	12,159	3,573	41	216,118	50,013	741	929	267,801	11,412	2.35

 The following is also taken from the review

So anyone born after 1965 will have their own access to this important program restricted just as the whole program becomes less expensive! The Conservative plan thus exacerbates any so-called generational inequity in the current system, rather than ameliorating it. (I don’t buy that old intergenerational complaint in any event: the equalizing impact of a generous universal pension system far outweighs any niggling concerns about intergenerational transfers.) This cynical calculation by the Tories was probably intended to short-circuit any repeat of the “Good Bye Charlie Brown” protests that derailed Brian Mulroney’s aborted effort to undermine the public pension system in the 1980s.

Thanks to the appendix tables in that same actuarial review, we can perform an interesting exercise. Table 5 of the review projects average OAS benefits in each year until 2060. From that table, anyone who is under 54 right now can calculate how much OAS benefits they would lose, as a result of having up to their first 2 years of benefits eliminated. The following table reports (in undiscounted dollars) the approximate lost OAS income for people in each age cohort. (For the first few rows in the table, the loss depends on the month of your birth, so these estimates are an average for the full year. People who are 54 right now don’t lose anything; but people who turn 54 later this year will lose partial benefits, and the first row is an average of these effects. For the detailed phase-in schedule see the Service Canada web site.)
 
 Personally I would lose around $14,000. That’s bad enough. But someone who is 20 today would lose over $34,000.

Another painful irony for those near the bottom of the above table: As those above them start to work longer in life to foot the bill of the OAS cutback, their own chances of finding a job will be reduced at the same time. Making old people keep their jobs longer, in a world where youth unemployment is a recognized crisis, has got to be one of the most counter-productive policy prescriptions ever devised. Those trumpeting the measure as a way of fostering higher labour force participation and hence faster GDP growth are still living under the misapprehension that employment is determined by the number of available workers; in fact, of course, employment is determined by the number of jobs.

In sum, it is clearly today’s young people who would be the real losers from this move. So instead of a Good-Bye Charlie Brown repeat, I think we need a more youthful cartoon anaology: perhaps a gang of anime crusaders with enough foresight to be furious that they will be denied access to a system that they themselves paid for. They will storm the Harperite ramparts to defend a system that is strong, affordable, and fair. This government is many things, but it is not stupid. A forceful pushback against this hurried, ill-considered retrenchment of a crucial public program could actually win.

Harper, Britain and Elder Abuse

I have often wondered why Harper wanted to strengthen Canada’ ties to Great Britain, and now I am beginning to see why. It has nothing to do with love of Queen and country, but everything to do with love of Power. It appears to me that Harper loves the idea that the British people are among the most watched and spied upon people in the world. I think he is trying to move  Canadians along the path to accepting the idea that government surveillance is needed and that government can be trusted with the information it keeps on its citizens.

The Following articles from Britain, could be where we are heading in Canada

First Take away Canadians privacy

Pamela Owen wrote a very interesting article on the problem  people in Britain are faced with when going online. She says that details about text messages, phone calls, emails and every website visited by members of the public will be kept on record in a bid to combat terrorism.

The Government will order broadband providers, land line and mobile phone companies to save the information for up to a year under a new security scheme.

So we can see why Harper wants to have closer ties to Great Britain, so he can copy their security protocols  and make Canada the most spied upon country in the world.

But we still have a way to go to beat Britain but under Harper's agenda we may soon get this honour. of being the most spied upon people in the world.

"Nick Pickles, director of privacy and civil liberties campaign group Big Brother Watch, said: 'Britain is already one of the most spied on countries off-line and this is a shameful attempt to watch everything we do online in the same way."

According to the Telegraph, the Communications Capabilities Development Programme (CCDP) is already being attacked by privacy advocates as offering a license for abuse and as raising the “Big Brother” potential for universal surveillance. The British government, however, views it as a “vital” tool against terrorism and serious crime, and the legislation to put it into effect is expected to be proposed in May.

The information to be stored would not include the content of calls or emails but would consist of phone numbers and email addresses. These would would who was communicating with whom on what occasions and could also make it easy for police to track the movements of cellphone and computer users.

The British government is in the process of developing a scheme whereby all phone companies and broadband Internet providers will be required to store customer transaction data for a year and hand it over to security services upon request.

The databases would also include Facebook communications, Twitter posts — including direct messages between subscribers — and even communications between players in online video games.

Second start attacking the elderly and disabled

Disabled people face unlimited unpaid work or cuts in benefit according to this story in the Guardian.

Some long-term sick and disabled people face being forced to work unpaid for an unlimited amount of time or have their benefits cut under plans being drawn up by the Department for Work and Pensions.

Mental health professionals and charities have said they fear those deemed fit to undertake limited amounts of work under a controversial assessment process could suffer further harm to their health if the plans go ahead.

The new policy, outlined by DWP officials in meetings with disabilities groups, is due to be announced after legal changes contained in clause 54 of the welfare reform bill have made their way through parliament.

According to the Daily Mail, 'The Government in England has been clear that because we are living longer, public service workers must work a bit longer and pay a little more for their pensions,' 'But in return we have also made an important commitment - that at retirement, those on low and middle incomes will get at least as good a pension as they do now.

Harper is also planning on committing financial abuse against elderly Canadians and to frame and sell his position, he will be pitting younger Canadians against older Canadians. Canadians who need their rightly earned pensions to live with some dignity. Harper assumes that people in my generation will not care that younger Canadians will be worse off because of his changing the rules. He assumes that the older Boomers will have an "I'm all right Jack"  attitude and will not care about what happens to younger Canadians. Well I think he is wrong, I have younger brothers, cousins and friends, who are going to be affected by his change of rules. I care and find it objectionable that Harper is pitting one group of Canadians against another.

Conservative government plans to broaden its case for changing Old Age Security by emphasizing the higher price younger Canadians will pay to support government programs unless Ottawa moves now to bring down costs.

In her first extensive speech on the topic of demographics since the furor over pensions erupted last month, Human Resources Minister Diane Finley is expected to confirm on Tuesday that the details of proposed changes to OAS – which could include delaying qualification for benefits until the age of 67 – will be revealed in the forthcoming 2012 budget