December 20, 2012 – Yesterday, Ms. Susan Eng spoke on the Todd Veinotte Show, based in New Brunswick, about CARP’s response to and position on this week’s Finance Ministers’ meeting on pension reform.. Despite the silver lining that CPP enhancements are still on the table and PRPP shortcomings are still under discussion, CARP was disappointed that nothing was done now to help people better save for their retirement, a problem that too many are facing.
When asked about general scepticism about market performance despite people’s genuine efforts to save, Ms. Eng agreed that there is great scepticism because people don’t see current systems providing the security they need. The only pensions that survived the 2008 financial crisis were the CPP and major public pensions, such as the teachers’, hospitals’, and public service pensions.
“The average Canadian who doesn’t have one of these workplace pensions – P.S. even if they did – need some other kind of system to help them save for their retirement. That is why people keep looking at the CPP as an obvious and consistent and successful player in the landscape”
– Ms. Susan Eng
As a result, CARP has been asking for CPP enhancements and also PRPPs that have target benefits, low fees, professional management, and employer contributions. Although many young adults need the money now to pay for mortgages and kids, Ms. Eng points out that they will be glad in retirement that they had put away that money earlier on.
“There are so many people now today, who when they were younger, hated the fact that they were contributing to a pension plan. Now are sitting pretty, thinking “Oh my god, thank goodness I was able to contribute when I had the chance” – Ms. Susan Eng
Many business owners have claimed that CARP’s call for CPP enhancements and PRPPs with mandatory employer contributions would be job killers. However, Ms. Eng said that their argument is hollow since employers would only have to pay an additional $18-$45/month to see a 10% increase CPP benefits – a hardly a job killer. Ms. Eng also pointed out that CARP members indicated that they would not have contributed to a PRPP if it had existed when they were working, but if there were employer contributions, they would have. Such evidence shows that there are vehicles and means to help people to better save, and it is time they are made available.
“So, how do you get people to actually put money away? Well, you either make them through a mandatory CPP or you create a product that is so attractive that they rush to you in hoards and droves. Which is it going to be? Net net, at the end of the day, we need to have Canadians saving more and earning more on their savings.” – Ms. Susan Eng
LISTEN to the full interview aired on Wednesday December 19, 2012 at 11:15am EST.
Read more about CARP’s Poll results on PRPPs and CPP Enhancements.