Pension Reform (in 3 paragraphs)

eyeball · June 22, 2016

Im still a long way from retirement, but as far as i can tell when these changes fully mature its going to cost me maybe $1500/yr,

Maybe not.

a one percentage point hike to premiums (up to 5.95 per cent each) phased in over five years, starting in 2019. By the time the higher premium is fully phased in, in 2024, a worker earning $50,000 annually will pay roughly $25 a month more in premiums — or $296 more a year.

Source

poochy · June 22, 2016

Yeah, we're all idiots thinking we're getting free money. That has to be it.

I have to pay the premium twice, being a business owner. I'm still in favour.

I don't care what you're in favor of liberal, im in favor of what doesn't cost me more now and doesn't hurt me later, if im spending more money and not seeing a return on it later it is in fact a tax, a back door wealth redistribution scheme, which allegedly, and to all its supporters, it isn't. But I haven't seen that proven yet, and yes, the vast majority think this is free money, and if some of us pay more than we will get back, it will in fact be that. If im going to see the same relative benefit as those making say 50k, i have no problem with it, otherwise its my money that I could have used to invest in my future, or say help put my kids through school, but what do you care about what it costs anyway, you have already claimed that all of this new government spending will be good for you, you're already enjoying the fruits of my labor, have some more liberal, have some more.

Smallc · June 22, 2016

I think you should actually try to understand ehats changing before hurling criticisms. Wage replacement increases as well as the maximum for both contributions and earnings at the top end. It's not free money, but it is guaranteed money.

overthere · June 22, 2016

By blind luck Wynne has managed to avoid what would not doubt been another scandal in the coming months.

I liked the idea of extra retirement pensions but had no faith in the Wynne government to not raid the funds as another "revenue tool"

This is one promise that I am glad the Ontario Liberals broke. After 13 years of lies and broken promises it was bound to happen.

What blind luck? You think the CPP agreement was a random event. No, Kathy called in a favour from her buddy in Ottawa.

TimG · June 22, 2016

It's not free money, but it is guaranteed money.

It is certainly NOT guaranteed. The eventual payment depends on having a long series of fiscally responsible governments. If governments continue on the course set by Trudeau/Wynne the country will have no money to pay the CPP when the bills come due. Edited June 22, 2016 by TimG

Smallc · June 22, 2016

It is certainly NOT guaranteed. The eventual payment depends on having a long series of fiscally responsible governments. If governments continue on the course set by Trudeau/Wynne the country will have no money to pay the CPP when the bills come due.

The CPP isn't part of general revenue.

overthere · June 22, 2016

The CPP isn't part of general revenue.

LOL. Right, just like EI premiums and surpluses were separate under Chretien.

Smallc · June 22, 2016

LOL. Right, just like EI premiums and surpluses were separate under Chretien.

The CPP isn't part of general revenue.

TimG · June 22, 2016

The CPP isn't part of general revenue.

Does not change the the fact that the ability of future governments to make good on the payments depends entirely on the financial health of the government. Broke governments will take money from wherever the can can get it and that would include the CPP fund even if they do not do that today. Wynne is already on record saying she wanted the pension funds used for government programs. Edited June 22, 2016 by TimG

overthere · June 22, 2016

The CPP isn't part of general revenue.

Says who? You? Get back to me when you have a majority in the House of Commons, where amending legislation is readily done .

Smallc · June 22, 2016

Says who? You? Get back to me when you have a majority in the House of Commons, where amending legislation is readily done .

The CPP isn't part of general revenue. Canadians would riot against any changes.

Edited June 22, 2016 by Smallc

TimG · June 22, 2016

The CPP isn't part of general revenue. Canadians would root against any changes.

That is why Wynne said that she wanted pension funds to 'invest' in public infrastructure. Such phrasing hides the fact that what Wynne really wants to do is expropriate the pension funds and spend them on things that help Wynne get re-elected.

overthere · June 22, 2016

The CPP isn't part of general revenue. Canadians would root against any changes.

Says you. Root?

Smallc · June 22, 2016

That is why Wynne said that she wanted pension funds to 'invest' in public infrastructure. Such phrasing hides the fact that what Wynne really wants to do is expropriate the pension funds and spend them on things that help Wynne get re-elected.

We aren't talking about the ORPP

Smallc · June 22, 2016

Says you. Root?

Just the way it is

August1991 · June 22, 2016

I don't care what you're in favor of liberal, im in favor of what doesn't cost me more now and doesn't hurt me later, if im spending more money and not seeing a return on it later it is in fact a tax...

Next time, look at your pay cheque (pay statement). Look at all those deductions. $X for this, $Y for that.

These politicians (guys and women) have designed a system where you don't notice what you lose. There are myriad deductions. Indeed, this new CPP system will be "phased in" and will have its own special category/calculation on your tax form/pay slip.

The politicians/bureaucrats understand all this - supposedly for a higher purpose.

Heck, Harper supposedly played with the tax system with a similar intention.

Edited June 22, 2016 by August1991

August1991 · June 22, 2016

Interesting claim. Any facts to support it or are you just expressing an opinion again?

Argus argued that Harper was concerned about job creation. Our current PM seems to want to create jobs for civil servants, and tax accountants.

And msj, make no mistake: as an accountant, you'll claim more hours calculating all these various payroll deductions.

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This leads to the key question: Aside from civil servants, accountants and disorganized people who by age 65 can't organize their affairs, does this pension reform make Canadians overall better off?

Edited June 22, 2016 by August1991

August1991 · June 22, 2016

The CPP isn't part of general revenue. Canadians would root against any changes.

Smallc, I'll ignore your claim about Canadians rooting.

The US Social Security is "pay as you go". This means that US pensioners receive generous payments from all taxpayers, including people like Bill Gates.

In Canada (thanks to Paul Martin), the CPP/RRQ is "fully funded". This means that Canadian pensioners receive small payments from only other middle class workers/contributors.

BTW, average US social security monthly payments are about twice Canada's CPP payments.

(In Canada, about Cdn$665 and in the US about US$1335.)

Cdn Link One

US Link Two

Edited June 22, 2016 by August1991

Smallc · June 22, 2016

Says you. Root?

Riot

Smallc · June 22, 2016

Smallc, I'll ignore your claim about Canadians rooting.

The US Social Security is "pay as you go". This means that US pensioners receive generous payments from all taxpayers, including people like Bill Gates.

In Canada (thanks to Paul Martin), the CPP/RRQ is "fully funded". This means that Canadian pensioners receive small payments from only other middle class workers/contributors.

BTW, average US social security monthly payments are about twice Canada's CPP payments.

(In Canada, about Cdn$665 and in the US about US$1335.)

Cdn Link One

US Link Two

In Canada we have CPP, OAS and GIS. It isn't comparable.

August1991 · June 22, 2016

In Canada we have CPP, OAS and GIS. It isn't comparable.

Even with OAS and GIS (given claw backs), American seniors do better. (I won't mention US Medicare compared to our provincial health wait system...)

And how about property taxes? Or sales taxes?

But that's not my point.

======

Smallc, this supposedly popular pension reform is a tax on ordinary working people. It will appear as another deduction on their pay cheque. Like any other drug, they won't really notice the increase at first.

Edited June 22, 2016 by August1991

cybercoma · June 22, 2016

CPP reserve fund is not part of general revenue and it's managed by an investment board not the government. Tim, do you ever think to educate yourself on a topic before slapping your ideology out on the table?

The_Squid · June 22, 2016

Yay, more taxes to pay for a substandard return.

How is it a substandard return?

August1991 · June 22, 2016

CPP reserve fund is not part of general revenue and it's managed by an investment board not the government. Tim, do you ever think to educate yourself on a topic before slapping your ideology out on the table?

"Managed by an investment board"? Who controls/decides who sits on this "investment board"? Cybercoma, I see a huge potential for corruption.

Maybe not this year or next year. But in 20 years, I cannot believe that this "investment board" (as designed) will be honest. I say the same about the "Teacher's Fund" or, uh, the Caisse.

"... not part of general revenue... " IOW, working people with incomes below $80,000 pay for all this among themselves. But if I make $500,000 per year, I'm laughing.

Edited June 22, 2016 by August1991