Canada’s Pension Problem

Updated : Nov 18, 2019 in Articles

Canada’s Pension Problem


All right Canadian taxpayers, all that talk about government pension
plans can be really confusing. So I’m gonna show it to you how it works in
plain english. The typical person working outside of
government has no workplace pension plan whatsoever. according to Statistics Canada three-quarters of people working outside
government have no workplace pension plan. Typically what they do is each paycheck they’ll put some money
into an RRSP and then of course those funds earn interest over time. Now as we all know, recession could come
along and take some of those dollars. That means the employee then has to
either work longer, put more money into the fund or they have to make do with what’s
there. The next option is something that four
percent of government employees have, and that’s known as a defined contribution
pension plan. What happens is each paycheck they’ll put money into
the plan and the government will match it. In other words, taxpayers like that guy will have to
contribute to that plan. And then of course, those dollars earn interest. And this fund is also susceptible
to a recession. So if there’s a dip in the economy then some of the money might be lost. What remains is the amount of money
that’s available for those employees to draw on. The third type of plan out there is the
richest and eighty two percent of government employees have this plan. It’s
called the defined benefit plan. And the way it works is that each paycheck the government employee puts money into the plan and so does the government. In other words, taxpayers like that guy
are having to put money into these funds. Then what happens is the plan will earn interest and of course it can also lose money if a recession comes along. But here’s the big catch with this plan: these employees are guaranteed monthly
payments no matter how long they live, for the
rest of their life, regardless of how much money is in the plan. So for example if the plan only has
this much money and yet employees have been promised
this much taxpayers like this guy will be forced
to contribute more money to the fund. The shortfall for the federal government
employees pension plan is over two hundred billion dollars. The Ontario Teachers’ pension plan has a
ten billion dollar shortfall. The City of Regina employees pension plan has a two hundred and ninety three
million dollar shortfall. These types of pension plans are in big
trouble across the country. So if you’re tired of putting more money
into someone else’s pension plan then you need to speak out. Tell your local politician to convert
these costly and unsustainable government employee pension plans into something more sustainable, a defined
contribution pension plan. That move will have you seening a whole lot
less red. Why do I support the Canadian Taxpayers Federation Because families deserve a break. Because someone has to keep our politicians honest. Because honesty and hard work should be rewarded, not punished. Alone my voice might not be heard, but together our voices cannot be ignored.

31 Comments

  • simple but effective way of informing the viewer … of course with the defined benefit plan you also have to have a small army of administrators, actuairies and accountants on hand to tell you what the situation of the plan is estimated to be (in other words the shortfall (or in rare cases surpluses)). The shortful/surplus under defined benefit is an educated guess as to how much money is owed / (or remains as excess)

  • Ya but that is much better than having the rest of our pension plans being emptied to fill up the other one that is guaranteed. Its not fair that the small amount of people who recieve the rich pension plan should reap the rewards of their "hard work" by taking away the peoples' pension plans for those who actually HAVE worked hard to put it up there.
    If you are happy paying 200 billion dollars into a few peoples pension plans on top of the federal Governments spiraling debt problem be my guest

  • Wanna know what sucks more? Taxpayers paying approx $170 MILLION in compounded interest per day ! ( per Christopher Porter March by-election Toronto Danforth 2012 ) check out oh canada movie website or canadian awareness website or Canadian Action Party website

  • Well, I base a lot of what I say on what I see. When I see way too many public sector jobs employee's literally standing around doing nothing (Such as road workers, etc).. Or those who won't go out of their way to do a job right (Waste truck drivers who won't pick up garbage etc if the bin isn't EXACTLY where it should be etc). When I saw a staggering figure that each public sector employee costing each tax payer 114k, I was flabbergasted to see such laziness get such rewards for doing nothing.

  • Yeah. I'm quite disgusted with this governments spending habits.
    While Harper and Flaherty gloat about how we are "the lowest debt ridden country in the G8".. But they forget that the G8 is by far the worst in debt out of all countries. Why Canada should withdraw from the G8/G20 because it's only screwing us.

  • to put it simply, this guy should be taking out more than half of the water when he counts in 'recession'. Then he should clearly define what a recession is, how it happens, and how the banking system as it currently operates is the only truly unsustainable part of this equation.

  • Yeah but if we wanna attract the best talent available ( and Canadians expect and deserve the best), then we have to pay for it. …. Sarcasm of course.. But that' s the best argument our government can come up with

  • Why aren't Canadians stopping this? We pay their wages… We employ government to waste our Tax dollars for their "well being" nothing for us! More work, more taxes… THEN more cut backs… And scams for programs … i.e CPP disability denies 9 out of 10 applicants, disability tax credit possible for those that need to qualify, WCB denies legitimate claims, employment insurance denies sick benefits n claims, I heard even welfare is denying people! Where are the Taxes and money that WE Canadian

  • Sickle**
    And I work just like everyone else. I just have a sense of belief that I choose to believe in. If you are a pure Capitalist, then you can believe what you want to believe in and I can believe what I believe in.
    I'm not a full blown Communist.. I recognise that Some sort of Capitalism is needed because people need to feel rewarded for their hard work. I just think that Socialist Ideologies are better than Capitalist ones overall.

  • All ideologies have flaws, a mix of all of them is better. For example, "right wing" in terms of fiscal responsibility (don't spend money you don't have, as in don't create debts) is better, unfortunately not many of these right wingers follow that one.

    While "left wing" in terms of everyone should have access to health care and education without debt is better.

    Both have imperical historical evidence in these fields showing it.

  • Oh I know.
    I recognize that there needs to be a system that is more centered than either just left or right. But.. I think if it had Socialist ways of life and had Capitalism to pay for it then we'd definitely be living the life.
    But, people would rather be greedy I think, and risk everything to gain something etc.
    I recognize that Capitalism is needed otherwise people just simply will not do something, because there is nothing to gain from it.
    Communism, of course does work best on paper.

  • I doubt politicians will do that because politicians themselves are getting lavish defined pension plans paid for by society, indexed against inflation and guaranteed for life.

    And they get that all for only 6 years of work.

    Anyone working in the private sector or anyone working to setup a small business in this country is a fool.

  • It can lose money when Justin Trudeau gives 2 billion dollars of your pension away to Mumbai and where ever else he decides to give away your pensions. Here we are in 2017 and that's what he did, He robbed the tax payers pension fund. Yes Trudeau's pension fund is quite safe but now 2 Billion of the poor mans pension is given away by Trudeau

  • Trudeau should be brought up on charges for stealing from the pension fund. People go to jail for that shit if it isn't an investment. That us a UN bribe and nothing more.

  • can anyone exlplain how pension are calculated my dad came in canada as an immigrant yr 2007 and now he is retire but he cannot get full amount of pension?

  • AND Trudeau just gave 2 billion dollars of your pension fund to Mumbai, to help there housing, YET MUMBI HAS MORE MILLIONAIRES THAN NEWYORK OR LOSANGELES , WAY TO GO TRUDEAU.ROB YOUR PEOPLE .

  • The answer is simple, phase out the defined benefit plans. Make them all defined contribution plans. Until then, hold the companies that invest these plans responsible. These investment companies earn tens of millions of dollars off managing these plans -MAKE THEM RESPONSIBLE. On top of the company that invests the plan, the executives of that company are also making millions off being an executive that sits on a board meeting every so often choosing how the pension plans are to be managed and invested -HOLD THEM RESPONSIBLE. Executives across the country are fat cats, raking in millions of dollars, primarily due to not just greed, but excessive greed. This puts the cost of everything up because it becomes more important for them to get excessive with compensation packages than to put out a good product. When executive pay has increase 150 to 200 times over 50 years or so, and the average wage has increased only a fraction of that, something is wrong with the formula.

    Next, teach people how earn more, and receive better pension plans, through getting trained at skilled work. The minimum wage types of jobs do not generally earn pensions. Due to the nature of such jobs, generally their employer cannot afford to contribute. Wealthier companies, such as large corporations, can afford to have employee pension plans, and they should have employee pension plans. This is one way employers attract better qualified employees, but there are other ways too. For example, larger corporation employers provide benefit plans too -medical, dental, disability, etc. types of coverage. Again, to attract better qualified employees, trained employees.

    So the answer isn't going against the people or the recipients of these plans by taking away what is promised, it is better to go after the excessively greedy fat cats that rake in millions and don't, in the end, accomplish their purpose of properly managing the pension funds they are hired to prosperously manage. Executives earn far too much, and governments spend recklessly. For example, take a look at the amount of money going outside of Canada based on the Trudeau Liberal government supporting various 'people in need' causes around the world.

    WHY NOT FOCUS ON THE CANADIAN PEOPLE? Why not get a lucrative pension plan for each and every Canadian so they can retire financially supported -a plan that they themselves invest in and no one in any way can touch (even in divorce)? Why not ensure our seniors are well taken care of? Why not teach the homeless people how not to be homeless, even if their lifestyle would not be considered middle class, at least they wouldn't be freezing to death in the harsh Canadian winters, on the streets? Why not eliminate the distorted delusional government spending on the wrong choices and set matters on the correct path, and so, as functionally required for Canadians?

  • Injured Soldier Told "He's asking for too much", my CPP pension is getting cut, and he's giving more money to the riches economy in the world. What more to we have to give this always empty begging bowl.

  • Well explained but you are missing another huge issue. If an employee works for a private company that has a "defined "benefit pension plan they generally contribute 50% of the cost of the pension plan by payroll deductions.Yet let's take 2 public service unionized companies and look at how their defined pension plans work.Hydro One Ontario employees contribute 14% to the cost of their defined benefit pension plan.Ontario Power Generation employees 24%. Plus they also have a lifetime plan for, drug, dental eyeglass etc. So who pays for this great plan?Ratepayers of course.

  • Stop this " OH NO Someone is getting something and I'm not" American style greed baiting. The CPP fund was fully funded to 2060. Most company pension plans also have the company matching their contribution. There is nothing unusual about that.The government employees aren't getting anything that workers in the private sector don't . This video is conservative propaganda.

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