CARP tells politicos to fix boomers’ retirement or voters will retire them; likes retroactive TFSA idea

CARP – a national association representing the 50-plus generation — is calling on politicians to protect the retirement of its members or “we’ll help you to yours [Retirement].”

In an interview, CARP vice president of advocacy Susan Eng cited the plight of pensioners at bankrupt Nortel Networks as evidence of the urgent need for pension reform.

She says governments also need to help aging workers who have no employer pensions at all. In particular, she thinks actuary Malcolm Hamilton’s call to help those with massive losses in their RRSPs and RRIFs through retroactive TFSA contribution room is a “good recommendation.”

In a CARP press release issued late Thursday, Eng accused Ottawa of a failure to act on pension reform. “The federal government appears unmotivated to act, choosing instead to create yet another research working committee after the Finance Ministers meeting on May 25, 2009 at Meech Lake.”

Eng called on provincial premiers to fill in the leadership gap on retirement security and reiterated the need for a “Pension Summit” at which retirees would have a prominent place at the table.

In the past year, three major provincial expert panels have issued recommendations for pension reform: Ontario, Nova Scotia and Alberta-British Columbia jointly. All identified the need to provide broader access to larger well-managed pension funds for those without access to workplace sponsored plans. “The need now is for the Premiers and their Finance Ministers to sit down and start constructing the solutions and to make sure that those most affected have a seat at the table,” Eng says.

Nortel bankruptcy shows pensioners need higher priority

In an interview, Eng [pictured, right] pointed to the bankruptcy of former telecommunications colossus Nortel Networks as evidence of the need for reform that will rebalance the interests of pension plan members and employers. Another high-profile case is the CHCH pension fund wind up. Eng says pension members must be given a higher priority in bankruptcy and deficiency funding obligations must be strengthened.

“How many more pensioners have to be robbed of their retirement security before the government acts?,” Eng asks, “If the federal government refuses to take a leadership role, the provinces can act within their own jurisdiction.”

Incremental change is no longer acceptable to a growing segment of the Canadian public because the market turmoil in the wake of the 2008 stock market crash has reached deeper and wider than ever before. Even the lucky few with “guaranteed” Defined Benefit pensions are finding common cause with the less fortunate who have watched their RRSPs evaporate.

Eng says Hamilton’s retroactive TFSA contribution idea is a “good recommendation.”

In these recent blogs and this column in the National Post, actuary Malcolm Hamilton has suggested this group could be helped by making contributions to the new Tax Free Savings Accounts (TFSAs) retroactive to age 18. Eng says she “convinced that it is a good recommendation and a good jump-off from the RRIF withdrawal moratorium which we still want.” Hopefully, all these ideas will be present in CARP’s pre-budget submission it will be submitting later this month.