There was good news and bad news coming out of the Finance Ministers meeting on pensions in PEI. The good news is that a solid majority of Ministers seemed to have finally realized that enhancing the CPP has to be a key part of the overall pension reform package. We have a couple of concerns here but basically we feel this part of the meeting produced good news. Our concerns? The very cautious language around the CPP enhancement by both Flaherty and Duncan might mean that only a token increase is being planned. That won’t begin to cover the gap in retirement savings.
The NDP is more critical of the comments coming from PEI that seem to point to major new federal-provincial initiatives to create multi-employer, defined-contribution pension plans that could only be sponsored by banks and insurance companies. Defined-contribution plans run by the private sector are simply the wrong way to go. These sorts of plans subject plan members to the roller coaster ups and downs of the stock market – if the stock market dives 40% the day before you retire, then your standard of living throughout your retirement is reduced by 40%. That simply isn’t fair. While we think there is room for major new pension innovations at the provincial level, we would prefer that they be defined or targeted benefit plans and that they be public with benefit and investment management activities being handled by the existing public pension infrastructure.
Therefore we will continue to call for the McGuinty government to implement the Ontario NDP’s Ontario Retirement Plan – a public, cost-efficient, defined benefit pension plan that that has received positive feedback from numerous pension stakeholders – including CARP
Leader of the Ontario NDP
Keywords: pension reform