Ouch! Politicians and groups like organized labour are arguing their unrealistic position of nearly doubling Canadian Pension Plan contributions. Michael Campbell reveals the numbers on what an individual, especially the Self-Employed could do better on their own.
The CPP is a nanny state pension. Supporters of it are admitting that they are so inept with their money that the government needs to take it from them and look after it for them.
If the CPP is so great why make it mandatory? Shouldn’t people flock to it without the use of force? Why have a cap on contributions? If its so great shouldn’t people want to put more money into it?
If the idea is mandating employers match ~2300 a year of retirement savings, why not just do that?
When I look at my retirement plans (still decades off) I don’t even consider CPP or OAS, if its there its a bonus but if your making life decisions on what the state may or may not provide a generations time in the future I’d take the pessimistic view and avoid eating cat food.
Getting a doubling of CPP cap would Step 1. Step 2 would be progressive politicians promising current retirees and soon-to-be retirees a portion or all of the newer, higher pension benefits. The CPP is a rip-off for younger, relatively poorer generations. CTF used to have a graph showing how the young will get less than a dollar back for every dollar taken for CPP compared to Boomers and older who get more than they put in. I hope my kids will have the choice to opt out and have an employer/employee RSP instead.
CPP benefit enhancements vs. income splitting would make for an interesting election issue. The CPC championing an income splitting plan for families with children – letting them keep more of their own income now. Progressives championing a CPP plan that takes money away from families now in exchange for an IOU. I think young families would rather have cash in hand than another government promise that may or may not be kept. Oh, don’t forget progressives journalists who do not not understand that letting people keep more of their own earnings is not a government subsidy.
As I commented on a post here last week….
The CPP is the biggest Ponzi scheme in Canada and Michael Campbell has been almost a solo voice for many years now on this long-looming crisis along with our utterly inexcusable debts and ever-expanding governments. There is never a shortage of inept or dishonest candidates for his “Goofy Awards”.
Thanks Libs and Cons, you’ve steadily strangled this country with your outrageous spending habits and dedication to party above country. We are no more than serfs who, every 4 years or so, get to choose which royal family will plunder us. I’m sick of it.
F^ck them all.
C O, well said, my exact sentiments:-)))
The real problem is that it is a pooled account. The money you invest is not yours and there is absolutely no guarantee that after being forced to invest for 40 years that you will get anything back. In fact the more you save outside of the CPP the less likely you will get anything back out in the future. It will be income qualified or taxed back instead. It is really just a massive wealth transfer from the young to the old and the baby boomers should be ashamed of themselves.
CPP was enacted by the Liberal government of Lester B. Pearson in 1965. I’m a friggin’ Boomer and I was all of 13 years old at the time. Voting age was 21!
You got a beef with CPP, or OAS, go talk to your grandparents, because they are the ones who voted this in. After surviving the Depression Years they did it “for the children”.
I was referring to the doubling of it now just before they retire not the inception of the program and I too am a boomer.
The baby boomers did not implement this ponzi scheme.
It was the previous generation that implemented this theft just as the baby boomers were entering the work force.
Those Sherrifs of Nottingham were rewarded greatly as the contributed little and took out exponentially more than they put in.
Meanwhile, the boomers who had been paying into the scheme their entire lives have a smaller demographic coming in behind them.
Once the guys who put in the legalized thievery died off, the inevitable generational warfare takes place, blaming those who had nothing to do with putting the CPP in in the first place.
That’s pretty much what I’ve been telling my kids as I approach retirement age.
set you free;
You might blame our parents generation for the fact that CPP might not be there for you. We as the Boomers could have righted the ship but failed to do that. We share even more of the blame than our parents as they had two good excuses; the Depression and WW II. Our kids generation will have more to bitch to us about than anything we could have dreamt up about our parents.
Our grand kids who will suffer the full brunt of the evitable collapse can blame everybody. Wait a minute, they have been raised in touchy feely daycares, they won’t know who to blame because ‘blame’ has been erased from the dictionaries, I mean computers, I mean iPads …
Hm, I was lucky enough to have a no nonsense business teacher(in bus. college approx. 30yrs ago) explain that our future pensions amounts were NOT going to cover us in retirement and proved it with the numbers.
So even way back then (about 15 yrs after cpp was started) the truth of this was known.
Any investment advisor will tell you, “don’t put all your eggs in one basket”.
Expanding the CPP to muscle out other retirement options is a terrible investment strategy for anybody.
The CPP is a Ponzi scheme, and its problem is that it’s supported only by coercion, which has no place in a free society. Therefore, it should be privatized, turned into a voluntary plan. This will be a complicated and very long operation, there are no overnight quick fixes, but it should be done.
In all the talk about pensions these days the one concept that seems to be missing is that in order to have high pension payouts, you have to have a productive economy. The voices pushing for a bigger CPP are the same ones advocating higher government intervention in the economy to strangle productivity, whether through more undeserved labour privileges, bogus environmental regulations, or the vicious garbage that spews out of “human rights” commissions. It’s not about helping pensioners, it’s about control. And the unions and left-wing academics are the last people who should be in control of Canada and its people.
nv53 they had to jack up the rates because the plan was going to collapse. I remember being outraged, telling every young person I could they would be getting the bill for past sins under the guise of funding future pensions. I told them if was going to approach 10% total of their earnings (including employer contribution) with nowhere near a fair return on that money. I told them funds were neither segregated nor invested. I told them the CPP has loaned the provinces money at little or no interest, and that they were paying massive disability benefits with retirement funding. In short they had made no attempt whatsoever to make the plan actuarially sound.
It was too late, by then Chretien had conditioned Canadian society to think it was their constitutional duty to get ripped off by government.
Different day, same s**t
I can’t complain. I contributed a total of $21,285 over 36 years. I started collecting CPP Jan 2011 and by the end of this year, I will have collected $26,037. Yeah, I know employers had to match my contribution and there is of course the increase in value due to investment growth. Still, it’s a mighty good deal. I wished the cap was higher from day one, I would have paid the extra premium with no complaining though that would be an additional expense for the employers. You bright lights think you could do better managing your own money? I’ll take the certainty of the CPP any day. The different mutual fund companies I dealt with have all been a disappointment.