Below is an article published by Chatham Daily News on April 10, 2015. Click here to read the article.
Drawing a comparison to the healthcare system, Dave Van Kesteren would like to see a universal pension plan for Canadians.
The MP for Chatham-Kent-Essex has been talking about the idea for a few months now and discussed his rationale for the plan with members of the Chatham-Kent chapter of CARP (Canadian Association of Retired Persons) at their meeting Thursday at St. Andrew’s Residence in Chatham.
Noting that the concept is his personal view only and not government policy, Van Kesteren’s proposal would give every Canadian $24,000 annually starting at age 65.
“Very simply, it means that everybody is going to get the same pension,” he said.
The MP said 65% of Canadians rely solely on CPP payments of approximately $12,000 a year.
He noted that a universal system would be more fair than the current system, which he believes is unsustainable.
While pointing out that he is not an economist, Van Kesteren, highlighted a number of well-documented concerns that will be challenges for future pension plans.
Both government and personal debt are soaring, which will make funding pension plans and saving for retirement more difficult.
With respect to personal debt, he said it has now grown to 163% of disposable income, up sharply from from 1970 when it was about 50%.
“Savers are becoming debtors, more and more,” said Van Kesteren.
Another key factor that is problematic is the demographics.
With birth rates falling, the number of workers to retirees is expected to drop to about 2.1 to 1 in 2033.
In 1950, Van Kesteren said there were 16 workers for every retiree.
Besides providing a more fair system, in his opinion, Van Kesteren said a universal pension plan would have other benefits.
For instance, he believes a universal plan would create “labour peace” in the future because there would be no fighting over legacy costs.
It would also help allay fears of employees who wonder if their pensions will still be there when they retire.
It’s a point Van Kesteren hears when discussing the proposal.
“They have this nagging feeling that it’s not going to be there. Whereas if this was something instituted by the government, it would be something that they would know they would be able to receive,” he added.
He also believes it would help entice more manufacturing back to Canada and encourage young people to choose careers in the skilled trade areas.
Van Kesteren told the group that today’s job seekers are telling him they are choosing careers with pensions, which tend to be in the public sector.
Also by knowing there’s a set amount, people will be encouraged to save and invest in their retirement.
Van Kesteren admitted he still has a lot of people to convince about the proposal and, if it becomes a reality, it would likely have to be phased-in to gradually integrate the workforce into the system.