Later Retirement: The Win-Win Solution
Over the coming two decades, people are likely to stay in the workforce much longer – by about five years – according to a report from the C.D. Howe Institute. In “Later Retirement: The Win-Win Solution,” author Peter Hicks finds there will be a strong trend towards later retirement by babyboomers as a result of […] What to do About Seniors’ Benefits in Canada: The Case for Letting Recipients Take Richer Payments Later
Ottawa should move to reform seniors’ benefits in the upcoming budget by letting recipients choose richer payments, later, from the Old Age Security and Guaranteed Income Supplement programs if they wish, according to a report from the C.D. Howe Institute. In “What to do About Seniors’ Benefits in Canada: The Case for Letting Recipients Take […] La retraite à deux vitesses : comment s’en sortir?
Les gouvernements devraient supprimer toutes les limites fiscales de cotisations aux régimes de retraite et les remplacer par une marge d’accumulation à vie indexée de 2 millions $, laquelle s’appliquerait à la valeur globale de l’actif de retraite amassée dans tout régime dont un individu est bénéficiaire, selon un rapport récent de l’Institut C.D. Howe. […]Before reforming pensions, MPs must tackle their own: Globe and Mail Op-Ed
Published in the Globe and Mail on January 19, 2012
By William Robson
Debate over retirement income is hot. It’s partly that Canadians are getting older. But it’s mainly the growing realization that the next generation of retirees may live less comfortably than their parents have done. People are living longer, and returns on investment are lower. So hitting the targets their parents achieved means today’s workers must retire later and save more.
Further raising the temperature is Canadians’ learning that the stresses affecting their own retirements do not affect the government employees whose pensions they backstop – federal employees heading that list.
Ottawa’s pension plans provide benefits far richer and…
It’s Time To Act On Pension Reform: Globe And Mail Op-ed
Published in the Globe and Mail on Dec. 21, 2011
By Keith Ambachtsheer and Edward Waitzer
Canada’s federal and provincial finance ministers are gathering on Monday in Victoria, B.C., to determine the fate of pension reform in Canada. The most constructive thing they could do is to make the current federal Pooled Registered Pension Plan proposal work better for Canadian workers who do not have a workplace pension plan.
PRPP success hinges on an agreement to do three things: First, require employer participation; second, specify a well-designed default option; and third, create a fit-for-purpose fiduciary oversight mechanism.
The federal government’s Bill C-25, tabled last month, and accompanying draft…
Saving Pooled Registered Pension Plans: It’s Up To the Provinces
The federal government’s design for Pooled Registered Pension Plans (PRPPs), as proposed in Bill C-25, has flaws that need fixing to meet the needs of Canadians without a workplace pension plan, according to a report released today by the C.D. Howe Institute. In “Saving Pooled Registered Pension Plans: It’s Up To the Provinces,” authors Keith […] Ottawa’s Pension Gap: The Growing and Under-reported Cost of Federal Employee Pensions
The federal government’s unfunded liabilities for its employee pension plans total $227 billion, far more than reported, according to a report released today by the C.D. Howe Institute. In “Ottawa’s Pension Gap: The Growing and Under-reported Cost of Federal Employee Pensions,” authors Alexandre Laurin and William Robson find that, using fair-value accounting like private-sector plans […] Ottawa’s $285-billion Pension Promises: Financial Post Op-ed
Published in the Financial Post on Dec. 13, 2011
By Alexandre Laurin and William Robson
Suppose a Canadian not employed by the federal government wanted to set aside a nest egg that would provide retirement income like that promised to a federal employee. He or she would invest in a security that is backed by taxpayers and indexed to inflation. Such a security exists: the federal government’s real return bond (RRB). The amount this person would need to put aside to achieve his or her goal — leaving aside retail costs and ignoring for the moment the tax limits on individual saving that would obstruct the project — would be a function of the yield on the RRB.
On March 31, 2011, the RRB yield was not the 4.2%…
Legal for Life: Why Canadians Need a Lifetime Retirement Saving Limit
Federal tax rules are preventing many Canadians – especially in the private sector – from saving enough for retirement, according to a report released today by the C.D. Howe Institute. Workers relying on RRSPs cannot accumulate even half the retirement wealth of career members of defined-benefit (DB) pension plans, says the report, “Legal for Life: […] CPP is a Gamble, Not a Guarantee: Financial Post Op-Ed
Published in the Financial Post on June 11, 2011
By William B.P. Robson
The recent economic crisis highlighted the weak foundations of defined-benefit (DB) pension and social-security schemes around the world. The Canada Pension Plan appears to have weathered that storm well, and some are advocating an expanded CPP to alleviate risks of low incomes in retirement. Proposals for a bigger CPP that talk of guaranteed or “fully funded” benefits may mislead distressed savers, however, since the CPP offers target benefits, not guarantees, and proposed increases would not be fully funded as most people understand the term.
Treat the CPP as a DB plan making firm promises, and it would need investment returns materially…
Don’t Double Down on the CPP: Expansion Advocates Understate the Plan’s Risks
Expanding the Canada Pension Plan (CPP) is a risky route to addressing Canadian concerns about low incomes in retirement, according to a report released today by the C.D. Howe Institute. In “Don’t Double Down on the CPP: Expansion Advocates Understate the Plan’s Risks,” author William B.P. Robson says advocates of an expanded CPP as a […]TFSAs Beat RRSPs for the Less Wealthy: Financial Post Op-Ed
Published in the Financial Post on April 8, 2011
By Finn Poschmann
When Jon Kesselman of Simon Fraser University and I published “A New Option for Retirement Savings: Tax-Prepaid Savings Plans,” the roadmap for what was to become TFSAs, we had high hopes for tax free savings accounts. I doubt we would have believed anyone who told us that in less than 10 years’ time nearly five million Canadians would hold these accounts, but we would have agreed that if you built it, they would come -and Canadian savers did. For folks in the tax policy business, TFSAs are a grand slam.
TFSAs, of course, are the arithmetic nearequivalent mirror image of registered retirement savings plans, and appeared in their current form courtesy…