Sunday, August 2, 2009

Where is the outrage over pensions?

Veracruz Farmers in Mexico

For some time I have been following the blog of Leo Kolivakis called Pension Pulse. Leo runs an insightful commentary on current pension issues.

The last issue of Leo's Blog asked where the outrage was over the current meltdown of the North American pension. There should be outrage over the theft and plundering of taxpayers and pensioners hard earned dollars.

Leo's questioned why
"civilized' Canadians seem to be sleepwalking while their pensions are dwindling. The unions are keeping silent too. Why? Maybe because they know that the federal and provincial governments are on the hook to pay out pension benefits even if the public pension plans are severely underfunded. Why make a fuss when you know the government will come in and shore up the plan?"

My take on it in an interview for the Toronto Star was
"I don't think it will be confrontational or violent," says Tufts. "But there is going to be a lot of pressure for change in the system. What we need is leadership that can address the issue."
Over the summer the pension issue has been a little quiet. I think that people were worn-out from all of the economic worries over the past year. However, there are several events building that will bring pensions back into mainstream Canadian discussion. As my article from the Digital Journal pointed out "The Biggest Economic Issue in 2009 - Public Sector Pensions".

I do not think that Leo has to wait much longer for the outrage to come.

Part of the problem is that pensions are such a complicated issue that it has taken Canadians a period of reading about them in the media to understand how they work. For example, the difference between a defined benefit plan and a defined contribution or RRSP plan.

Leo and I were cited in several articles in Mexican newspapers. The most influential was El Economista. In the article they quoted Leo as saying there will be a Tsunami of insolvencies or large pension deficits in both public and private pensions. This situation threatens to reduce the pensions on thousands of retired persons.

El Economista further went on to say that Bill Tufts affirms that the financial implosion puts into a state of crisis private sector pension plans.

Several of Canada's think tank and policy institutes have taken on the pension issue. They include:
Canadian Chamber of Commerce
Carp - The Canadian Association of Retired Persons (soon to be called Zoomers)Note: check out what Moses has done to create a new image for the Zoomers.
CD Howe Institute
CFIB - Canadian Federation of Independent Business
Canadian Taxpayers Federation

It is too bad that we have to have this conversation as it will be hard for all Canadians. In the ideal world we could all have pensions like the one described in this video from BC Pensions. Where your pension becomes a "Guaranteed paycheque for the rest of your life". This works for me "you stop working but the cheques keep coming... guaranteed".

However, the fantasy that the public sector has been living in is not the reality. We as Canadians all have to work together to find solutions.

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