And now for a penetrating insight into the obvious. Late last week, the Royal Bank released its latest Registered Retirement Savings Plan (RRSP) poll, and the study said that the number of people planning to put money into RRSPs is falling.
In fact, just 35 per cent of Canadians expect to put money into RRSPs, the lowest number in a decade - the lowest since 1996.
Please, people, stifle your surprise.
Fact is, with the economic conditions from last fall, it's a wonder that anyone is planning to put money in. First of all, many people lost jobs last year, and those who are left working have less disposable income.
Then, there are the RRSPs themselves - the message from many RRSP holders was clear as the recession took hold: don't even open the plan envelopes when they come in the mail. You just don't need the additional heartache and fear of watching your hard-earned retirement savings disappear.
Yes, RRSPs are about long-term gains, not the peaks and valleys. But they're also only part of a much larger pension picture - and a much larger, much more frightening picture at that.
There's a clear example in this province, with the collapse of pulp and paper giant AbitibiBowater. The company, like many, has a fair-sized shortfall in its pension obligations, and pensioners are finding out that they may receive a cut in pension benefits of as much as 29 per cent. Other pension funds have equally large problems - and there are good reasons for that.
When funds were doing well, companies were allowed to take large surpluses out of the funds. When fund investments fell, there's been no recourse. Overall, it means that the golden years are suddenly nowhere near as golden.
The impact is clear: another part of the Royal Bank survey says the number of Canadians planning for retirement is also falling - only 36 per cent say they are planning for, or have planned for, retirement, down from 42 per cent last year.
Coupled with rising - and frightening - high levels of household debt, the whole future financial picture is unsettling, to say the least.
Last Friday, the nation's finance ministers met in Whitehorse to start looking at the overall picture - one in which 44 per cent of Canadians have neither a company pension plan nor a registered RRSP. In private companies, only one out of every five employees has a company pension plan.
The irony, of course, is that the discussion is being undertaken by a group of individuals who are arguably served by some of the best pension plans in the nation, pension plans that allow them to take out more benefits than they ever put in, and that are - because they are funded by provincial and federal taxpayers - without any risk of collapse whatsoever.
Finance ministers traditionally wear new shoes when they bring down budgets. Perhaps, when they talk pensions, they should spend a good long time wearing the shoes that other Canadians have no choice but to walk in.
Pension tension
And now for a penetrating insight into the obvious. Late last week, the Royal Bank released its latest Registered Retirement Savings Plan (RRSP) poll, and the study said that the number of people planning to put money into RRSPs is falling.
In fact, just 35 per cent of Canadians expect to put money into RRSPs, the lowest number in a decade - the lowest since 1996.
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Comments
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- Eugene
- - July 2nd, 2010 at 13:30:45
Amazing how the public trough is lined with a fully garunteed pension, with no beneficiary contributions for elected officials who, in turn, relieve private companies of having the same responsibilities to their employees. Our company funded pension plan (small though it was) was cancelled last summer, and despite a better profit margin than the previous year, we have lost half of our paid holidays. Interesting that when governments run deficits they can still keep up with such rich compensation packages (including pensions) for elected officials but are loathe to regulate private companies (ie. make pension contributions obligatory for long term employees) that provide the majority of employment. How did St. John's city councillors make out this fall, are they contributing to their pensions?
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- Beverley
- - July 2nd, 2010 at 13:30:28
In 1999 I met with Charles Van Wagner and Frank Stokes of Ontario and they, as seniors were concerned about pensions. They wanted me to use my very rare chance to talk to then finance minister Paul Martin about income splitting for pensioners. Their movement had great success and the slogan of it became 'pension tension'. I loved it. I am not a senior but I very much endorse setting up something more secure for seniors who have done so much for this country. The move to get pension splitting succeeded but now the 22 pension groups that advocated for it have discovered with market meltdown and unscrupulous financial advisors, that many people's life savings have eroded anyway. The new push to get a new securities regulator and to get a better Canadian pension plan is being promoted by the activist seniors in our community, many of them organized through the very competent work of Dan Braniff. I doff my hat to seniors who, just like they tried to set up for the nation with unemployment and insurance and universal health care are trying to leave as a legacy a good pension plan. It's not just for them. They are thinking of all of us. It's their way. These are the people who fought in world war two. They are trail blazers for a better world.
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- Eugene
- - July 1st, 2010 at 20:18:47
Amazing how the public trough is lined with a fully garunteed pension, with no beneficiary contributions for elected officials who, in turn, relieve private companies of having the same responsibilities to their employees. Our company funded pension plan (small though it was) was cancelled last summer, and despite a better profit margin than the previous year, we have lost half of our paid holidays. Interesting that when governments run deficits they can still keep up with such rich compensation packages (including pensions) for elected officials but are loathe to regulate private companies (ie. make pension contributions obligatory for long term employees) that provide the majority of employment. How did St. John's city councillors make out this fall, are they contributing to their pensions?
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- Beverley
- - July 1st, 2010 at 20:18:19
In 1999 I met with Charles Van Wagner and Frank Stokes of Ontario and they, as seniors were concerned about pensions. They wanted me to use my very rare chance to talk to then finance minister Paul Martin about income splitting for pensioners. Their movement had great success and the slogan of it became 'pension tension'. I loved it. I am not a senior but I very much endorse setting up something more secure for seniors who have done so much for this country. The move to get pension splitting succeeded but now the 22 pension groups that advocated for it have discovered with market meltdown and unscrupulous financial advisors, that many people's life savings have eroded anyway. The new push to get a new securities regulator and to get a better Canadian pension plan is being promoted by the activist seniors in our community, many of them organized through the very competent work of Dan Braniff. I doff my hat to seniors who, just like they tried to set up for the nation with unemployment and insurance and universal health care are trying to leave as a legacy a good pension plan. It's not just for them. They are thinking of all of us. It's their way. These are the people who fought in world war two. They are trail blazers for a better world.
