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…
Fix Pensions with Screwdrivers, not Sledgehammers: Globe and Mail Op-Ed
Published in the Globe and Mail on December 17, 2010
By William Robson
Canada’s finance ministers will gather in Kananaskis, Alta., on Monday with Canadians’ retirement prospects high on their agenda. Post-crisis anxiety has fed expectations that the ministers will announce something big – mandatory accounts, perhaps, or the supersized Canada Pension Plan being pushed by some provinces and unions. Federal Finance Minister Jim Flaherty was right to dampen expectations on that front on Thursday. Different Canadians – modest or middle-income, large-business employees or self-employed, young or old – have different needs. Upgrading our retirement prospects requires adjusting with screwdrivers, not sledgehammers.
…
Canada’s Looming Retirement Challenge: Will Future Retirees Be Able to Maintain Their Living Standards upon Retirement?
The Public-Sector Pension Bubble: Time to Confront the Unmeasured Cost of Ottawa’s Pensions
Seeking Certainty in Uncertain Times
MP Pensions – Plans Canadians Can Do Without: Globe and Mail Op-Ed
Published in the Globe and Mail on April 19, 2010
By William Robson
MPs’ pensions are again in the news. No wonder: A recent report on their plans over the year to March 31, 2009 – a period when interest rates fell to unprecedented lows, the stock market lost a third of its value, and most Canadians’ retirement dreams took a body blow – showed an 8 per cent increase in their accounts. The truth, however, is weirder, and worse. These accounts are a fiction. Extraordinarily rich and completely unfunded, MPs’ plans are instructive examples of the worst in Canadian pension arrangements.
The spectacular performance suggested in the annual report tabled in Parliament would have been welcome if it had been real.…