Ontario budget lays out pension plan

Ontario budget lays out pension plan

Ontario budget lays out pension plan
The Ontario government is now offering key details about a "retirement pension plan" meant to bolster the incomes of the growing numbers without a private equivalent.

The budget confirms that the proposed pension plan would rely on equal contributions from workers and employers and could be incorporated into the CPP with fed approval.

Premier Kathleen Wynne has argued the plan as a the best workaround the federal government's decision to keep its pension plan as is and not to beef up contributions. The move is not without controversy

Advisors themselves have been divided on the need for a provincial plan, although they've seen the quick erosion of private benefit plans across all levels of the corporate structure.

The government points to more than 50 per cent of working Ontarians without employer pension plans. It's a growing phenomenon that is expected to increase reliance on government support in retirement.

Ironically, some advisor clients may not lean on the CPP enough
.

“I would say that the CPP benefits provide an important, but not an essential element to their retirement security,” explains Rona Birenbaum, one of WP's Top 50 Advisors. “Without it, they would have to go without some of the comforts of retirement.”
 

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2 Comments
  • Kevin O'Brien 2014-05-02 9:07:42 AM
    Fact: If you take the $ amount contributed to CPP annually by the average Canadian worker/Employer matched and invest it at 5% for a total of 35 years (the average work span) and then systematically withdraw (indexed to inflation) from the accumulated value (again invested at 5%) the principal is never touched - it keeps growing. Here's the point the reason CPP is broken is because the government failed to keep a CPP account and wastefully spent the money on election promises and government projects. So here we are allowing the Liberals to set up a supplementary pension plan? The government's financial record for maintaining and governance of our government retirement pension plans speaks for itself -I say keep them away from our pension plans.
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  • Mark Matsumoto 2014-05-02 4:13:07 PM
    This is a very horrible, stupid and irresponsible idea. Create a huge liability, pay the baby boomers who have started to retire and tax the fewer, younger people behind the baby boomers. Alternatively, increase HST, gas, alcohol, and corporate taxes so companies and jobs move out of Ontario.

    It took huge increases in CPP rates to try to fix it. Companies are eliminating pensions because they are so risky and expensive and the people you voted for want to create a huge new one.
    It is a bad plan for Ontario but not so bad for me. I will pay for 5 or 10 years and collect for 20 or 30.
    It is another ill conceived idea by the socialist liberals. This is an open ended expense that will cost far more and cause far more damage to Ontario than the cancelled gas plants or any of their other mistakes.
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