Canada's banks push for fair playing field in pension reform

This article is from the Vancouver sun newspaper. To read the entire article, click on the above title.
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OTTAWA —  Canada's banks are warning federal and provincial governments against creating any new supplementary pension plans that would give them an edge over their private-sector competitors.
The Canadian Bankers Association says any public or quasi-public plans should have no regulatory, legislative or "artificial cost" advantage over the retirement-savings vehicles offered by the financial-services sector.

"There should be no reputational advantage to such plans," the association said.
"They should not enjoy any implicit or explicit government seal of approval and it must be made clear that the government is not providing any guarantees with respect to portfolio balances, rate of return or income stream," it added.

The association made clear in a brief to the federal government that it takes a dim view of proposals to establish one or more pension plans to supplement the Canada Pension Plan as a means of encouraging Canadians to save more for retirement.

Instead, the association calls for strengthening retirement savings through the private sector by, among other things, revising federal regulations to allow multi-employer pension plans.

Four in 10 Canadians retiring with debt

Yet another survey indicates that many seniors are financially vulnerable after retirement. (You can read the complete story on the CTV News web site by clicking on the title above.)
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A new survey suggests many Canadians are entering their golden years in the red.

The survey from RBC finds that four in 10 Canadians over the age of 50 who have assets of at least $100,000 have retired with some form of debt.

As well, one-quarter have entered retirement still carrying a mortgage on their primary residence.

The survey, which RBC calls its first annual Retirement Myths and Realities poll, was conducted by Ipsos Reid to examine Canadians' expectations and experiences in retirement.

It also found that 17 per cent of retirees had consumer debt or credit card debt. In total 7 per cent had other kinds or debt or were co-signers on loans, while 5 per cent had mortgages on investment properties or cottages.

The survey found that 70 per cent of retirees feel it is still important to be able to save part of their income, yet more than one-quarter have acquired new credit products since they retired.
The survey found that many retirees are worried about how their savings will hold out over their retirement. Inflation and taxes are among the top concerns, with more than one-third (35 per cent) worried that inflation will negatively impact their retirement income, compared to 43 per cent of pre-retirees.

As well, 62 per cent of retirees worry about taxes on their income, with two-thirds believing the percentage of their income required for taxes will rise in the next 10 years.

"It's not uncommon to be concerned about maintaining a sustainable level of income in retirement, but costs you never counted on may also arise," said Davies. "For example, our poll found that almost one-in-five retirees spend over $1,000 annually on prescription drugs."

The poll, conducted from March 10-19, 2010, surveyed online 2,143 adults aged 50 and over with household assets of at least $100,000. About half the group said they were retired.

Caring for Seniors

This topic was featured on CBC's radio program, "The Current" with Anna Maria Tremonti, on Thursday, April 22, 2010.
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"As life expectancy goes up, the people taking care of the elderly are often seniors themselves. We look at the ups, the downs, and the complications of caring for your loved ones for longer than either of you might have planned."

Click on the link to go to the Current's web site, and then scroll down to "Pt 3: Caring for Seniors" (the program is available as a podcast).

http://www.cbc.ca/thecurrent/2010/04/april-22-2010.html

Open Parliament

I learned of this web site while listening to a recent CBC radio program, "SPARC", hosted by Norah Young. The site allows you to keep track of what your MP is doing or not doing in the House of Commons, including any speeches made and how she or he voted on past bills or those currently before the House.

I was furious at learning that my MP, Ed Fast, had recently voted AGAINST Bill C-311, (an Act to ensure Canada assumes its responsibilities in preventing dangerous climate change). His position was that the bill would be devastating for industries and hence the economy. There have been any number of studies that have shown that initiatives designed to protect the environment actually stimulate the economy and certainly save us all a lot of grief and money in the long term.

Visit the site to see what your MP is doing: Open Parliament http://www.openparliament.ca/

VGH overcrowding

This is but one example of the problems that exist in the current health care system. And with the provincial government announcing cuts rather than increases in funding, the problem is only going to get worse. Where do you think we'll be in ten years when the boomers put additional stress on the system? In my opionion, it boils down to 'you can pay me now, or you can pay me later'. And it seems clear to me that the longer we wait to address the problem the more expensive it will be to fix it. Why aren't the politicians acting NOW?

Here's an excerpt from CBC...
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With files from the CBC's Stephanie Mercier and Kirk Williams

Doctors say a recent fire safety violation points to the need to address the causes behind a potentially dangerous overcrowding problem in Vancouver General Hospital's emergency room. A city fire inspector issued VGH a notice in March saying too many stretchers were crowding the hallways and creating a fire hazard.

One emergency room doctor said the problem could threaten lives.

"The department is so crowded that in the event of an emergency such as a fire, there's not proper egress space available for patients to leave the department," said Dr. Kevin Clark.

"The first solution is to share the overcrowding equally throughout the hospital," said Dr. Jill McEwen. "Rather than leave 50 patients in the emergency department, if two of those patients went to each ward… that would immediately eliminate the access block in the emergency."

But the Vancouver Coastal Health Authority said it has eliminated the fire hazard in the VGH emergency room by moving extra stretchers into an area near the vending machines as well as the waiting room.

Spokesperson Anna Marie D'Angelo also said the hospital could always use more doctors, but the authority has to work within the restrictions of its agreement with the B.C. health ministry.

"The ratio of doctors is… established in that agreement and it's something that the provincial government would need to change for it to change at VGH," said D'Angelo.

Flaherty seeks pension advice

This topic is of great interest to me personally, since I am an ex-employee of Nortel Networks. Fortunately, while I worked for Nortel I chose to contribute to my former Public Service Pension Plan, (possible due to a reciprocal agreement between Nortel and the feds), so my pension is unaffected. Still, I feel for the many employees who find themselves in this sad situation due to no fault of their own. It's time for the feds to pass legislation so others will never find themselves in this circumstance.

Read the following edited article from CBC News...
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CBC News

Finance Minister Jim Flaherty took his cross-country pension tour westward Monday, meeting with banking officials and citizens in Winnipeg to solicit opinions on Canada's retirement income system.

"All options are on the table," Flaherty told reporters before meetings Monday.

The issue of pension reform has gathered steam in recent months with the high-profile collapses of numerous private pension plans, such as that of Nortel Networks Corp. When the tech giant entered bankruptcy protection in 2009, various levels of government stepped in with hundreds of millions of dollars to help guarantee pensions.

Despite those efforts, thousands of Nortel retirees have been left in the lurch and have lobbied the federal and Ontario governments to fill the gap at the insolvent firm.

In December, Flaherty met with his provincial counterparts in Whitehorse to discuss ways of overhauling the system.

Some provinces favoured creating a second, complementary system to supplement the Canada Pension Plan, while others argued simply putting more money into the existing system is the wisest course. Others have argued that smaller, more targeted moves such as tax breaks and increases to RRSP and TFSA limits should be used.

In October, Flaherty tinkered with the rules governing pensions at Crown corporations, but the changes fell well short of the across-the-board overhaul that some people have sought.

On Friday, CAW president Ken Lewenza lobbied in favour of a proposal that would effectively double the amount paid out under the CPP by gradually increasing workers' contributions to the plan by about 58 per cent over seven years.

Many private-sector pension plans are significantly short of the funds needed to pay their promised benefits, because of weak investment returns and historically low interest rates. And many employers are behind on payments required to meet these funding deficiencies, as a large number of Canadians are due to retire in the coming decades.

General Motors currently has a pension shortfall in excess of $100 billion, while Air Canada, Stelco, Alcan, BCE, Bombardier and Canwest Global, which is currently restructuring, are among a handful of Canadian firms that have struggled to deal with underfunded pensions in recent years.

Read more: http://www.cbc.ca/money/story/2010/04/12/flaherty-pensions.html#ixzz0kvnr9A5z

Health care near the end of life

My niece (who is currently working on her PhD at Simon Fraser University) has recently coauthored a study on the little known Compassionate Care Benefit, which is available through EI, for those who are caregivers to someone nearing the end of life. I hope to post the study here in the near future.

But unti then, here are some of the key findings (perhaps not unsurprisingly):

• many Canadians are unaware that such a program exists;
• the application forms are unnecessarily complicated and the approval process is long and drawn out;
• the maximum benefit period is woefully inadequate: only six weeks (with a waiting time of two weeks before the benefit is available);
• the benefit period does not allow for a period of mourning;
• applicants are almost always unsure of when to begin their benefit period (due to the real difficulty in predicting the precise time of death of the one being cared for);
• the financial amount of the benefit is similarly inadequate at a maximum of only $447.00 per week.

Interviews and focus groups were conducted with all stakeholders - caregivers, front line palliative care workers, and HR personnel who would need to approve the 6 weeks time off for the caregiver. They were unanimous in their recommendations for improving the program.

This CCB program has the potential to become useful to many families as they cope with the imminent death of a loved one. And since the care is often provided at home it means huge savings for the health care system. Again, it is up to all of us to pressure government to improve programs such as this so that they become actually meaningful.
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My niece, Melissa Giesbrecht, has kindly consented to the posting of the study. Here is the link to view the entire study in both French and English:

Evaluating Canada's Compassionate Care Benefit (English)
(French Version) Authors: Allison Williams, Valorie A. Crooks, Melissa Giesbrecht, Sarah Dykeman.

You can also get more information here:
Family Caregiving for People at End of Life

Become an advocate or activist!!

Mandatory or voluntary pension reform?

It looks like Finance Minister Flaherty is actually listening and looking for solutions before the younger Canadians find themselves in even bigger doo-doo than thay are at the moment. If you have any ideas don't be shy about contacting either the minister or your MP.
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By THE CANADIAN PRESS

WINNIPEG - The federal government is "all ears" on pension reform, and is not taking a stand yet on whether Canadians should be required or simply encouraged to sock away more money for their later years, Finance Minister Jim Flaherty said Monday.

"We're not prejudging these issues. Two of the opposition parties in the House of Commons have made their choices ... we're prepared to listen," Flaherty told reporters before meeting with a small invitation-only group of business, labour and academic leaders.

Monday's meeting was one of several Flaherty is holding as he looks for ways to help ensure Canadians have enough money for retirement. With a smaller percentage of Canadians enjoying private pension plans through their employers and other avenues, Flaherty is facing pressure to beef up public benefits.

A Statistics Canada report last month said only half of all tax filers in 2008 participated in a private retirement savings plan, down from 57 per cent in 1997.

British Columbia and Alberta have threatened to set up their own voluntary pension supplement unless Ottawa leads the way and produces a new national plan soon. Flaherty plans to meet with his provincial counterparts in late spring to discuss the issue.

Some labour leaders and the New Democrats want the government to double benefits under the Canada Pension Plan - a move that would presumably necessitate higher premiums.

The Liberals are pushing a voluntary top-up to the Canada Pension Plan.

Other groups want voluntary measures, such as a higher cap on registered retirement savings plans, to encourage people to set aside more money.

Flaherty said he is not making up his mind yet.

"We really are all ears. I want to hear from everybody. I want to hear what they have to say."

Critics argue Flaherty is hearing mostly from select audience. While there have been open town halls, including a recent one in Charlottetown, some of Flaherty's meetings are being held behind closed-doors with an invitation-only crowd.

Monday's session involved 14 invited people representing the Manitoba Chambers of Commerce, the Canadian Union of Public Employees, the Canadian Federation of Students and other groups.