Sunday, December 28, 2008

Welcome to my Blog

Welcome to my blog. Thanks for visiting.

This is a site that I will use to compile my writing about the current pension predicament. An excellent part of this site is that I can also include links to the most commonly referenced material about pensions.

There is increasingly more and more information in the press about pensions in Canada. The trend has come from Europe and is now coming to Canada. I will include news links to the more relevant pieces i find in my readings.

Recently one of my writings was featured on Pension Pulse. Leo is a pension expert who has been following the situation regarding pensions and the potential impact of the current economic situation.

I will include the piece that was included on Leo's site.

Thank you Leo.

It has been a while since I wrote to you. I have been busy trying to calm my clients about their fears of the markets and most businesses seems to be tightening down expenses for the potential challenges in the economy ahead.

A lot has happened in the pension world.

We can begin with the meltdown that has occurred in pensions on the markets. This has heightened awareness of pension problems for the public sector plans and of course in the private sector as well. The automotive makers are saddled with huge legacy costs and it will be difficult to see how they can survive without government help. But some argue the markets should take their natural course and weed out the non-profitable entities. Why should you as a taxpayer bailout inefficient businesses who have mismanaged opportunities.

Speaking of bailouts there us much talk of bailouts for pensions funds. Unfortunately the only funds to be bailed are the public sector plans and the few large company plans remaining. We can see how the automakers are struggling. Here is a list of the Top Pension Plans in the country. They look like plans that have already received billions of tax dollars. Why dump more in? Who is going to bail out your pension fund?

As we watch the business world try and deal with pension meltdowns more and more people are speaking about the unfairness of our current system. The Pension Tsunami
is a watchdog across the US. As people investigate pensions more and more rot is discovered. This site discloses the waste of taxpayer dollars to the new special class of citizens the taxpayer has created.

The sins include double dipping, receiving a gold-plated pension at that same time working on the public dole. Pension boosting, the boosting of final pension income by working overtime. Bankrupted cities in California, almost bankrupted states, huge pension deficits and on and on. Ontario’s own Teachers pension shortfall was over $12 billion in April this year. That was before the huge losses in the markets this fall. The deficit is probably in the range of $30 billion today. This is more than $6000 for every Ontario resident.

On the research front the CD Howe Institute released their report that shows the huge unfairness of the public sector pension plans. The gold-plated pensions of the public sector are designed to replace 70% of final working income. A teacher retiring at $94,000 of income should expect government support of over $65,000 for life and indexed.

The CD Howe report compared the private sector and the public sector worker. A comparison was made between two workers each earning $50,000. The average private sector worker retires with $ 255,000 in his RRSP while the same public sector worker would have in excess of $1 million to fund his pension. The full report makes for very interesting reading for us who have absolutely nothing better to do!

To address the unfairness of the pension situation even the Canadian Chamber is on board with a report that makes the #1 Pillar in its Key Areas of Focus, Reforming Pension and Benefit Regimes. The report provides an excellent analysis of the key areas that Canada needs to improve to become competitive, from a labour perspective. This will be more important than ever for the future of Canada as we watch the continuing decline of the manufacturing sector and the rise of new economies based on technology, innovation and services.

It will be very interesting to watch how this pension situation progresses.

For those of you interested in a more technical aspect of pensions Leo has an interesting site with lots of information The Pension Pulse. [thanks for the plug!]

Oh by the way, I am planning on going to Mexico early next year to help a friend who has a chain of hearing clinics. Every year he goes to fit hearing aids on children in Mexico. It is a life changing experience for them. It is a vicious cycle because there is no social security system in Mexico. If the kids can’t hear they cannot learn to read, write or speak. Without these skills they cannot go to school. Without schooling in Mexico there is not much hope.

Last year we were in Tabasco, yes where the hot sauce is from. Over 50% of the population of Tabasco lives in poverty. Not like Canada’s poverty but real poverty where it is measured by having shoes to go to school, a roof over your head and one meal a day. We were able to help over 50 children hear, some for the first time. It is quite an experience to hear a child hear his name for the first time in their life and know that just maybe life can be different.

Hasta muy pronto.

As Leo pointed out in his comments...

I like the way Bill's message ended, focusing on the important things in life. Too many people in the financial world have lost the meaning of life.

As I told my former colleague on the plane ride coming back from Toronto a couple of days ago: "The only thing that matters in life is your family, your friends, your community and your health. The rest is bullshit".

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