Federal Government Stalls Pension Reform

(Posted Dec 22, 2010)

The Prince Edward Island Union of Public Sector Employees says Federal Finance Minister, Jim Flaherty, has changed his tune when it comes to enhancing the Canada Pension Plan (CPP).

Shelley Ward, PEI UPSE President, says “in June 2010 Minister Flaherty was advocating a modest, phased in and fully funded enhancement to the CPP based on strong feedback he received from Canadians.  Flaherty said he was concerned that some Canadians may not save enough for retirement. However, after the Finance Ministers’ most recent meeting on pension reform in Alberta, Flaherty suddenly changed his tune. He now says better economic conditions are needed before thinking about CPP expansion. ”

“It sounds to me like Minister Flaherty is forgetting about what Canadians want and is taking cues from Alberta’s Finance Minister, Ted Morton, who is dead set against improving the CPP for Canadians. Both Flaherty and Morton are spearheading a voluntary private pension system that does not adequately address retirement security for all Canadians, incorporates more financial risk for investors, and benefits the banks who make money through these plans by charging high fees.”

“The CPP on the other hand is a national public universal workplace pension plan that has the capacity to provide Canadians with a greater proportion of retirement income. It has lower administration costs and investment management fees than private plans, and it provides all Canadians with less risk, greater certainty and increased benefits like spousal benefits, death benefits, disability benefits and inflation protection.”  

“We already know that over 6 million Canadians are without workplace pensions or RRSPs, and that the CPP is their only real source of retirement income. It’s unlikely that these same Canadians will now voluntarily opt into a private pension scheme when they have had the option to invest privately all along. It is clear that we need to support what the majority of the Finance Ministers are saying – that enhancing the CPP is the most effective way to ensure our senior citizens retire with dignity and security.

Please contact Mark Barrett at 892-5335 (or toll-free at 1-800- 897-8773) to arrange an interview.