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

Criminalizing Abortion--Motion 312 Action Alert!

While the F35 debate takes up the small minds of the main stream media, the cons continue to move Canadians back to a different time. The cons talk abot Canadian values being important, while at the same time, they distort and continue to try and destroy and reshape our values to fit their image of Canada. One of the core Canadian values is the right of a person to choose.

So while the main stream media dance around the F35 debate as the press fight to stay one step ahead in the fight to win the 24 hour news cycle, the cons and their supporters have opened the abortion debate and try to reframe this issue.

Some progressives believe that it is ok to engage in the discussion about abortion, the cons are proposing,  they are wrong. Those who think that by having this conversation they are being open minded and supporting the right of free speech, don't be fooled, this is part of a long term strategy to outlaw abortion in Canada. Having the convesation allows the right to start to re-frame the discussion in the way they want to frame it, and that reframing cannot be allowed.

We have laws that limit free speech for a reason and we are not allowed to yell fire in a theater or a closed space if there is not a fire. There are times in a democratic society when we limit free speech, this is one of those times.

Others have written on this topic and I urge you to read them (links are included here. First start by reading the following which is from the abortion rights coalition of Canada website. Their message is important for all of us to listen to and to act upon.

The Woodshed, Dammit Janet, Creative Revoluton, Dr. Dawg along with many others, all have great posts on the issue of choice and abortion, which I found interesting and useful. .  

A dangerous motion has been accepted for debate in Parliament. Motion 312 (see full wording on Conservative MP Stephen Woodworth's website) calls for a Parliamentary Committee to examine whether the Criminal Code definition of "human being" should be expanded to include fetuses. This threatens to give legal personhood to fetuses and allow the re-criminalization of abortion, as well as deny the constitutional rights of all pregnant women.

The motion is scheduled for one hour of debate on April 26, with a further debate and vote in June or possibly the fall. We must ensure this motion is defeated! Please sign our petition, send a letter to your MP, knit a uterus or vulva for your MP, or start or join an action.

• Petition, Sample Letters, Postcards
• Counter Arguments and Commentary
• Actions
• The Anti-choice Agenda

The bloggers at Creative Revolution and Dammit Janet present compelling reasons for us to take action. Their words are from the heart, please read them and once you have take action to stop this insanity.
Creative Revolution said on April 5th:
Harper has sworn, up and down. Sideways. That the abortion debate will not be opened again in Canada.

But his MP's, members of his party that he has such control over in everything else have other ideas.

It's time to pay up the debt to the religious right, the fanatics who have helped them get into power.

And part of that would be criminalizing abortion.

Dammit Janet said on April 4th:
Wanna fight back?

Here is ARCC's action page opposing Woodworth's Wank, aka Motion to Strip Women of Hard-Won Rights, with everything you need to fight back.

There's a link to the petition, which has just zoomed past 6900 signatures.

Link to downloadable and printable postcards to send to MPs, complete with link to an MP finder.

And there's a link to a Facebook page called 'Wombswarm Parliament' (that I can't get into because I hate Facebook), based on this US website that we blogged about here.

I also agree with Cathie from Canada  and Orwell's Bastard who said on April 5th:
I am not going to "debate" about the notion of fetal rights or when life begins or whether or not women have the right to control their own bodies. That's done. Anything that purports to "reopen" such a question needs to be seen for exactly what it is: a transparent attempt to reassert patriarchal control over women's sexuality and reproductive autonomy.

Anyone who wants to have that "conversation" can go fuck themselves.

The Woodshed said on April 7th:
As my esteemed colleague Dr. Dawg has put it, there are can be nuances in the abortion debate - things like the role of public funding in a private health care system and parental notification for underage girls come to mind - , but there are no grey areas in a woman's right to choose. Not to get all philosophical on you dear reader, but She either has it or She doesn't, and I defy you to prove any human does not have the right to make a choice, even, or perhaps especially, if the choice is between life and death.

Forget about abortion for a moment and consider the principle of choice more generally. We may not have a legal right to choose what we choose, whether it is the choice to drive over the speed limit, smoke marijuana or machine-gun a bus load of nuns, but we can make a choice to break the law. Some people make a choice to give up their own lives to save others (we call them heroes), others make the choice to defy or obey the law for all sorts of reasons.

We know that women will make a choice about abortion whether the law allows it or not. When it comes to abortion, other than providing an iron-clad absolute legal recognition of this right to make a choice (and thereby rendering the consequences of the choice legally valid), the only possible role any law can take is to restrict the innate right of choice.

In the case of abortion, we know that choice will be made - one way or another - by women every day. So to recognize reality and mitigate possible harm and generally promote the common good, I would argue that the progressive position should be that the state must support the right to choose -- and recognize that it is an absolute right.

Simply put if you have a moral objection to abortion - and I recognize that many do - then by all means don't have an abortion. That is your choice.

The spin on pensions continues

The Globe and Mail, believes that "it’s not a given the Conservatives will lose on this issue as the debate matures." The editorial goes on to state, "they are at least now sticking to their main point: Unchanged, the current system will eventually eat up an unprecedented amount of tax money." and that the OAS policy announced this week might be the single best thing the Harper government will ever do for younger Canadians.

The readers comment about this article have some interesting ideas, I found very few of them support this legislation. So no matter how the mains stream media tries to to spin the changing of the OAS rules, most Canadains are not buying the line and the spin is not working . Here are a few of the readers comments from the Globe story:

These statements are false according to many trustworthy sources
Spin, Spin, Spin ....... Harper has the best spinmeisters in the world. Tell a lie often enough and people believe it to be the truth

People in their 40s and younger are double-hosed by this policy. First, their tax dollars pay for two years of benefits for people over 55 that they won't receive. Second, as the younger ones get towards the end of their careers, they won't be able to move into the highest echelons because of the large numbers of boomers staying in those high end jobs longer

Raising the OAS eligibility age will hurt the most vulnerable--low-income seniors and low-income workers who are not able to save during their work lives. Denying them a pension for an extra two years will force many to choose between necessary medications, food, and keeping a roof over their heads.

As to actuarial "necessity", we are only talking about a temporary bump in increased demand on tax revenue to pay for OAS. According to government figures, the OAS as a percentage of GDP for 2011 was 2.4%. That figure is projected to jump to 3.2% in 2030 before dipping below 3% in subsequent decades—2.9% in 2040, 2.6% in 2050, and 2.4% in 2060.

Using a temporary situation as an excuse to permanently cut government support for citizens may be acceptable to conservative ideologues--even if it does inflict severe hardship on the most vulnerable seniors--but it is not good government.

We had a friends and family party last evening with this as a big topic. All 163 of us, who voted PC last May said we will never trust them again. We will all be voting the NDP come next election.

The CON paid trolls try to make anyone who disagrees with the Harpercrite Regime as leftards and libtards etc.. Many of us are Progressive Conservatives who have no Party or are just Canadians who don't believe that a Party in CONTEMPT of Parliament has a right to govern... Democracy is being threatened by election fraud and voter suppresion by the Reformers. Harper certainly isn't a PC. Fascism best describes him and his CULT.

Let's get this clear. This has nothing to do with sustainability. An approach for sustainability would have hit the boomers. That's the biggest burden on OAS. They could have solved this problem by immediately decreasing the income above which OAS is clawed back. Instead, they went with vote buying by leaving out the boomers and punishing the poorest seniors. There was little impact on sustainability when we still have to carry all of the boomers. Standard operating procedure for this government.

So who wants my vote. Whatever party promises to reinstate retirement at 65 I will vote for you.

Pension reform tales from the front.

The following letters were published in the Star.com on March 31, 2012, they speak for themselves Seniors are not happy nor are we Boomers.

Re: Tories add years to working lives, March 30
I “planned” for my retirement. I have been working since I was 17. That was until I became permanently disabled and unable to work five years ago. I receive a Canada Pension Plan Disability pension, which makes up 1/3 of my income, and long-term disability, which makes up 2/3 of my income. As a result of my disability, my income and benefits decreased to about 40 per cent of my pre-disability income.

I now spend thousands of dollars a year on medication and health-care providers delisted by the provincial Liberal government. I can no longer afford to live independently; I had to move in with my parents.

Tell me Mr. Harper, since my long-term disability benefits cease in 13 years at age 65 and my CPP-D decreases, how will I financially survive until the age of 67 when you are taking away OAS and GIS benefits for those two years?
Dawn Wylie, Mississauga

Increasing the eligibility for old age benefits from 65 to 67 is cruel at best. Most Canadians are living on low-wage jobs with no pension plans and struggle to pay the bills, let alone being able to contribute to RRSPs. Making Canadians work longer when some may be in dangerous jobs or have health issues is unfair.

As NDP Leader Thomas Mulcair said, Stephen Harper informed Canadians last June that the Conservatives would not touch the pensions of Canadians and they misled us all. Although CPP was not touched, most Canadians rely on the OAS to top up the measly $12,000 a year the CPP pays out.

Jim Flaherty should have tackled the MPPs’ platinum-plated pension plan first and then looked at the OAS. Better yet, MPPs should live on the equivalent of CPP for a month to better understand the struggles of average Canadians.
Avery Thurman, Oshawa
Many Canadians do not understand what the change to the OAS means. It does not affect me now as I am too old but I understand what it means to people on a low income. Many single women and other Canadians who have no company pension to supplement the old age pension depend on the OAS. To take money away from this group of seniors is like taking from the poor. Stephen Harper and Jim Flaherty should be ashamed. This change is despicable and an eye-opener. It shows me finally what Harper stands for and who he really is.
Elizabeth Richardson, Toronto