GOOD THING OR BAD?
Well, in fact, it is Terrible.
Let me count the Ways:
But first, for those of you who do not live in our fair and bankrupt Province … a little background.
As the Western World’s population ages, much time and effort is being expended on whether or not seniors will have enough money ($) to retire on when they hit the magic age of 65 years.
Here in Canada, there are a number of social programs that have been devised to address this issue including -
- The Old Age Pension;
- The Canada Pension designed to provide for 25% of a retiree’s income; and,
- The Guaranteed Income Supplement for Seniors.
Taken together, this provides the average retiree with over $1,300 … about 1,000 Euros a month.
For the lowest 20% of seniors – this is more than they were receiving post retirement.
Now eliminating the highest 20% of seniors because their income is such that they do not need government assistance – we are left with the 60% that make up the lower / middle / and higher Middle Class.
They too receive the Old Age Pension and Canada Pension plus many also have their own pensions from their days in the workforce.
But in addition, our Federal Government has other vehicles to help them prepare for their golden years including the Registered Retirement Savings Plan and the Tax Free Savings Plan. Both Plans not only help retirees but also place funds in the retirees’ own hands to do with as they wish.
So all in all, Canada’s Seniors are doing very well … thank you very much.
With this background, we have the grossly indebted Province of Ontario coming along recently to say that Ontarians are not saving enough money for their retirement and it must now step in and create a new Pension to save them from their folly … so to speak. This new Pension Plan, the Government says, will replace 15% of a retiree’s income.
So let’s see how they are proposing to do that:
- They will take from each employee 1.9 % of the employee’s annual wage and the employer will be required to match that.
The employers say that this will only result in greater unemployment since they already have to pay for a number of deductions such as Unemployment Insurance, Canada Pension Deductions, Workers’ Compensation etc.
The employee says ‘what am I going to do with the loss 1.9 % of my wages – with the high cost of everything, I have little enough left over now’.
2. It will take 40 years of contributions to qualify a worker for a full pension but if the worker dies before he or she reaches that magic number – all is lost to the Government.
This is unlike the two Federal Plans above where you get to manage and control your own investments and when you die, whatever remains falls into your estate for distribution.
3. The Plans’ greatest flaw though is that the individual’s contributions will be used by the Province to fund infrastructure projects – things like sewers, roads, bridges, transit. Excuse me, but I cannot see how such projects will generate interest, or dividends or capital appreciation?
Do you?
This, then, is all a scam and has come about since our Province, once the economic engine of Canada, is now a basket case wallowing in debt.
Hardly a day goes by when the Liberal Government of Ontario does not announce another scheme to tax the hard won earnings of the Province’s hapless Taxpayer.
And the new Ontario Retirement Pension Plan is just another such scheme, albeit, a most outrageous one.
As I see it…
‘K.D. Galagher’
