Wednesday, January 13, 2010

Retirement crisis overblown???

An interesting article today from one of Canada's foremost pension expert was released in

The article cited that
Despite dire warnings in the press that Canada's pension plans are set to implode, one of the country's most respected actuaries says the problem isn't really that bad. In fact, Canadians are in an enviable position compared to most other countries.
When we see the news today  about the earthquake in Haiti we realize how truly blessed we are to live in a country like Canada. It is true that
"We have virtually no poverty among senior citizens in Canada — virtually none; a big change from 40 years ago when we started to develop the (retirement) system that we now have."
The contention of this blog is that all Canadians need to share fairly in our countries wealth. There should not be a divide between the haves and the haves nots. Especially when the haves are funded at the expense of the have nots.

Statscan showed that in 2008 Canadians contributed a total of $ 34.1 billion into their Registered Retirement Savings Plans (RRSP). These are the plans that cover those workers who do not participate in work sponsored pension plans. There are a total of around 18.4 million workers in Canada and only 5.9 million belong to pension plans. These RRSP contributions include those of the 68% of workers not in a pension plan, or about 12.5 million workers. Nationally, the median RRSP contribution was $2,780.

These RRSP contributions contrast with those contributions made into Canada's pension funds. Statscan estimates these pension contributions to be about  $ 37.2 Billion in 2009. This is for the other 5.9 million Canadian workers who are in a pensions plan. Of these workers almost half are public sector employees. This makes for an average contribution of $ 6271.

A significant portion of contributions were funded by taxpayers for the benefit of a public sector on defined benefit pension.

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