CARP's call for a Universal Pension Plan

[Jon Chevreau]

I touched on this in my blog yesterday:

http://network.nationalpost.com/np/b...sion-plan.aspx

On the other hand, FP Comment today has three related pieces, including one by Jack Mintz that questions wisdom of superfunds in general:

http://www.nationalpost.com/todays-p...tml?id=1520301

See also piece on the travails of the Quebec Pension Plan:

http://www.nationalpost.com/todays-p...tml?id=1520302

Arguably, the CPP is in better shape. You could argue that if it's not broken, don't fix it. Seems to me the combination of CPP, OAS, RRSPs, TFSAs, an employer pension if any, and non-registered savings, should suffice. But perhaps some here have other views?dA

P.S. See also 60 Minutes show from Sunday on America's sad experience with 401Ks: basically like Defined Contribution plans here.

http://www.cbsnews.com/stories/2009/...n4951968.shtml

[archanfel]

The minute I see the word "mandatory" is when I start to cry "communism!" I am always astonished by people's willing to blame others (government, banks, whatever) yet refuse to take any responsibilities for their own actions.

[ethos1]

Originally Posted by Jon Chevreau

I touched on this in my blog yesterday:

Arguably, the CPP is in better shape. You could argue that if it's not broken, don't fix it. Seems to me the combination of CPP, OAS, RRSPs, TFSAs, an employer pension if any, and non-registered savings, should suffice

Being 62 & already collecting CPP, I would never have thought for one minute that the fund would dry up in my lifetime.

I will be depending on the CPP, OAS, GIS & max GST credits, but, unluckily without employer pension plan or RRSP's ... TFSA's have too short a run for my benefit

I say, pitty on the 20 year olds today, some of who post on here who all believe they can amass a fortune to retire by 40

[CanadianCapitalist]

I like to have the control of saving and investing for my retirement and would be loathe to give that up. We already have CPP and OAS supplying a part of the retirement income and I like having the choice of saving inside a RRSP. The problem with government plans is that like annuities, they provide an income stream without anything left over. They also lack flexibility in the sense that there are rules about when a participant would be eligible for pension etc. I like the current rules and take full advantage of it and would like it to remain that way.

[Jon Chevreau]

Yes, this gets to the whole issue of taking personal responsibility for one's investments. Problem is 401Ks are more or less self-managed: I sometimes jokes that Canada's "self-directed RRSPs" are often "self-wrecked" by poor decisions. As I point out in my latest tweet and blog, if Americans are down 40 or 50% in their 401Ks, they were clearly close to 100% in equities and didn't heed the traditional guidelines of diversification and asset allocation. If they were even 40% in bonds, they shouldn't be down more than 20%, especially after the rally of the last six weeks.

http://twitter.com/JonChevreau

[archanfel]

Originally Posted by Jon Chevreau

Yes, this gets to the whole issue of taking personal responsibility for one's investments. Problem is 401Ks are more or less self-managed: I sometimes jokes that Canada's "self-directed RRSPs" are often "self-wrecked" by poor decisions. As I point out in my latest tweet and blog, if Americans are down 40 or 50% in their 401Ks, they were clearly close to 100% in equities and didn't heed the traditional guidelines of diversification and asset allocation. If they were even 40% in bonds, they shouldn't be down more than 20%, especially after the rally of the last six weeks.

http://twitter.com/JonChevreau

Exactly. That's why I have absolutely no sympathy for retirees who are complaining their retirement savings are gone. They took on risks that they couldn't afford.

[mfd]

Originally Posted by Jon Chevreau

...if Americans are down 40 or 50% in their 401Ks, they were clearly close to 100% in equities and didn't heed the traditional guidelines of diversification and asset allocation. If they were even 40% in bonds, they shouldn't be down more than 20%, especially after the rally of the last six weeks.

60 minutes had a few of these people on their show this week. When I heard that they were down 40%+ I started screaming. It was obvious they got caught up in the market and didn't have the appropriate asset allocation. Where has personal responsibility gone?

As for CPP and UPP, its my belief that the average person isn't capable of saving appropriately to retire so I support these ideas. What I don't like is defined benefits. The government should take the money, invest it conservatively and automatically adjust your asset allocation based on your age and risk profile. Twice a year you'll get a statement and when you are ready to retire the money is yours to do as you wish. If you spend it irresponsibly then you figure out what you'll do next.

[lb71]

Originally Posted by archanfel

Exactly. That's why I have absolutely no sympathy for retirees who are complaining their retirement savings are gone. They took on risks that they couldn't afford.

Or they were misled.

[archanfel]

Originally Posted by lb71

Or they were misled.

If they have alzheimer's, then it would be a valid excuse. More likely they were lured by the higher returns, yet are unwilling or unable to shoulder the corresponding risks.

"I don't blame people for their mistakes, but I do ask that they pay for them. "
-- John Hammond.

[stephenheath]

I'm hugely against this idea. It removes all flexibility from a working family to decide on how much to save depending on circumstances, it removes all access to their savings (no more tapping the RRSP to eat if you lose your job, now all your money is in the CRAP fund), it would crowd out other savings (RRSP, TFSA, Investments) that can be passed with your estate where you choose and replace them with funds that become a government windfall if you die before breaking even.

If CPP needs to be increased a bit to provide enough funds that people don't live in poverty (assuming they worked enough), then I suppose I'd be fine with that, since otherwise my savings would be taxed more to cover the welfare or guaranteed income supplement programs that would exist, but beyond that, let people decide for themselves how much to save and when to retire, and let them deal with the consequences.