An Opinion on Enhancing the CPP

This November, Gary Hepworth, the chair or CARP Etobicoke, shared CARP’s stance on CPP enhancement with the Islington Times and the Lakeshore Villages publications. Gary Hepworth’s  timely and poignant statements conclude with an invitation to contribute to CARP’s CPP enhancement campaign. You can do so by emailing your ministers of finance and provincial and federal representatives through our E-Voice page by clicking here. Chair Gary Hepworth’s opinion piece follows below.


An Opinion on Enhancing the CPP

The politicians are playing politics with our future and it has to stop. The Canada Pension
Plan needs to be increased and everybody knows it but for some reason the politicians are
not getting the message.

Politicians need to hear from Canadians directly – that you fully support and understand the need for the CPP enhancement and that you want them to act now to provide a better retirement future – not for you but for your children and grandchildren.

If you accept the fact that Canadians are not saving enough for their retirement and need a better vehicle with which to do so then the settled opinion is that increasing the CPP is the best way to do that. All the other options have been tried.

This article was published by Islington Times this November,  2013.  To see this article and other related articles on their website, click here.

The aim here is to put enough money away so that once the pay cheques stop,by choice or not, the invested savings have earned sufficient money to allow you to draw enough to live on and preferably to maintain your standard of living. Research shows that a sizeable number of Canadians will face a significant decline in their standard of living because they are not saving enough. But also because their investments are not making enough returns – especially now in the low interest rate environment.

Dollar for dollar, you can’t buy a retirement pension any more cheaply than purchasing additional units of the CPP, if you could, unless you’re lucky enough to belong to a defined benefit plan at your workplace. Two-thirds of working Canadians don’t have any workplace pension plan. The CPP or any large defined benefit plan is able to generate enough investment income to pay your lifetime pension benefits. In fact, it is not your contributions that pay for these benefits but the investment income which pays 80% of those benefits.

So why has a simple retirement investment option become so political? Primarily because you can’t have it unless the politicians agree to amend the CPP. And that takes 2/3 of the provinces with 2/3 of the Canadian population plus the federal government. It happens that there is now a consensus of enough of the provinces necessary to fulfill that formula but for some reason, the federal government has refused to consent and just won’t budge – despite the fact it was federal finance minister Flaherty who proudly made the commitment in June 2010 for a modest enhancement to the CPP.

To help make politics align with common sense, it’s time to tell your federal and provincial politicians that they should act now to improve the CPP. If not now, When?

© Islington Times