The provincial finance ministers meet for their annual pre- Christmas meeting, the topic this is improvements to the Canadian pension plan. The conference is sponsored by the University of Toronto’s Center for Industrial Relations and Human Resources.
The group in most trouble has a family income between $35,000-$ 100,000. Costs have risen to the point that this group cannot save enough for their retirement and still meet day-to-day obligations. Wages have been stagnant for years, the industry has moved to non-defined pension plans and more and more contract work . Grads have trouble finding steady employment, many work for minimum wage and are paying off large student loans. 300,000 grads are working for free in ‘intern’ jobs in Canada. Buying a house is out of reach, paying rent almost impossible plus, we have a zero vacancy rate in Lacombe, and 1-2 % in Central Alberta. All of this makes saving for retirement, or saving enough for retirement next to impossible.
One proposal is to increase CPP rates. That is troublesome for the employee who is already in debt and also apparently not good for the employers in a fragile economy. (Also one has to wonder about record profits from some big industry in Lacombe county, the oil patch industry and the banks for example).
Another proposal is to yet again raise the retirement age, which already was raised by the Conservatives from 65 to 67. The next raise proposes for Canadians to work to age 69 or 70. That raises the question why public employees and teachers still get to retire at age 55, that is at present 12 years less work than just about everyone else and in the future 12-15 years less work. This represents such a significant difference in life quality that one has to wonder why this discrepancy has to been addressed.
In addition the teachers’ pension plan has to be funded by the public because the teachers’ contributions are not enough to pay them 70% of their wage for an additional 25-35 years after retirement. The average Alberta teachers wage is $90,000/year, 20% higher than any other province. Retiring at age 55, with such a handsome income is a luxury that most of us will not be enjoying.