tag:blogger.com,1999:blog-72882525699053557922024-03-13T10:48:05.236-04:00Fair Pensions For AllNow more than ever pensions have become a major issue for our society. This crisis has been building for several years.
This blog is an attempt to stay on top of the current issues surrounding pensions. Our main feature is a regular update of the news headlines about pensions.
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http://fairpensionsforall.net/Unknownnoreply@blogger.comBlogger172125tag:blogger.com,1999:blog-7288252569905355792.post-53680161318678161412011-05-05T15:11:00.004-04:002011-05-11T14:08:16.056-04:00Please Check Out Our New Site (Click Below)<div dir="ltr" style="text-align: left;" trbidi="on"><br />
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<span style="font-size: x-large;">Go to: </span><a href="http://fairpensionsforall.net/"><span style="font-size: large;"><span class="f"><cite><b>fairpensionsforall</b>.<b>net</b></cite></span></span></a><br />
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</div>Unknownnoreply@blogger.com10tag:blogger.com,1999:blog-7288252569905355792.post-84070900084904760222011-04-26T05:13:00.124-04:002011-04-26T09:20:07.858-04:00The Agenda - Steve Paikin<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-1kCBr0QCyEc/TbaplZPdZ9I/AAAAAAAAAgI/y26PuCSWjpo/s1600/kansas_storm_450x300.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="266" src="http://3.bp.blogspot.com/-1kCBr0QCyEc/TbaplZPdZ9I/AAAAAAAAAgI/y26PuCSWjpo/s400/kansas_storm_450x300.jpg" width="400" /></a></div>.<br />
The Canadian election is nearing completion and one of the big issues has been pensions. Steve Paikin <br />
covered the issue on his show, The Agenda. I have posted the video below. The show is an excellent discussion but completely neglected the 800 pound gorilla in the room... public sector pensions. <br />
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Pensions have been discussed in the current election but the big issues have been neglected. As <a href="http://twitter.com/#%21/CFIBPrez">Catherine Swift </a>recently Tweeted:<br />
<blockquote>Gonna be one interesting election. Unfortunately the big issues continue to be ignored - healthcare, public sector pensions unsustainable. </blockquote>After the election public sector pensions will be back on the agenda. They are unsustainable and as taxpayer awareness grows people are becoming more resentful and envious.<span style="font-size: small;"> </span><br />
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<b><span style="font-size: small;">Public Pensions, Once Off Limits </span></b><br />
<span style="font-size: small;">The New York Times notes that public sector pensions are on the agenda in a big way. Please see the article below it is a good read. <a href="http://www.nytimes.com/2011/04/26/us/26pensions.html">Public Pensions Face Budget Cuts.</a></span><br />
<blockquote>When <a href="http://turf.lib.msu.edu/awards/pdfs/awards/r2353.pdf" title="The ruling (PDF).">an arbitrator ruled</a> this month that Detroit could reduce the pensions being earned by its police sergeants and lieutenants, it put the struggling city at the forefront of a growing national debate over whether the pensions of current public workers can or should be reduced.</blockquote><blockquote>“These things do tend to be herd-oriented,” said Sylvester J. Schieber, an economist and consultant who studies pensions.</blockquote><blockquote>The mayors of some hard-hit cities have said that the high costs of pensions have forced them to lay off workers: Oakland, Calif., laid off one-tenth of its police force last year after failing to win concessions on pension costs.</blockquote><blockquote>Elsewhere there is pension envy: some private sector workers, who have learned the hard way that their companies can freeze or reduce their pensions, resent that the pensions of public workers enjoy stronger legal protections. But government workers, many of whom were recruited with the promise of good benefits and pensions, say that it would be unfair — and in many cases, very likely illegal — to change the rules in the middle of the game. </blockquote><b>Avoid Change At All Costs </b><br />
Despite the fact that Ontario will pump a record amount into it's public sector pensions, unions will jump up and down denying there is a problem. This year the top 3 Ontario pension plans will attract $4 Billion in taxpayer payments and employees will contribute the same. In addition there are several more pensions requiring taxpayer money such as universities, colleges and the Ontario Hydro and OPG giants, all sucking up huge taxpayer dollars for pensions. Many argue the money that the union members have to put in their contribution came from taxpayers too. <br />
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The union tactic will be to deny that changes to pensions can be made. This is wrong but it gives them time to postpone pension changes as they try and take the issue into the courts. Changes cannot be made to past pension accruals but pensions can be changed going forward. <br />
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A good example of pension changes was brought to my attention in a article from Kansas.<a href="http://www.kansasreporter.org/73540.aspx"> Little relief for Kansas pension woes seen for 10 years</a> Kansas has two proposals in front of it, one from the State Senate and one from the State House. Comparing the plans is a good exercise in investigating and understanding pension plan change options. <br />
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A full detailed report on the plan change options is covered in a <a href="http://www.kpers.org/legislation_fiscalimpactreport.pdf">Fiscal Impact Report.</a><br />
The report details the changes investigated by the Senate which actually would worsen the state's pension situation and the House changes proposed.<br />
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<i>Note that the Kansas pension has $11 Billion in assets for 277,000 Kansas teachers, state and local government workers, and police officers, fire fighters and judges. The plan has a had an unfunded actuarial liability of $7.7 billion and a funded ratio of 64%.</i><br />
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<i>Contrast this with Ontario Teachers plan which has $107.5 Billion for 295,000 active and retired teachers in Ontario. It has a $17 Billion pension shortfall. You can see how badly Ontario taxpayers have been taken to the cleaners by our public sector pensions. Yet the unions jump up and down denying there is a problem and politicians are deathly afraid of addressing the issue. Until this changes you are going to be paying pensions for your public sector neighbor forever! </i><br />
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<i>In Kansas the average teachers salary is at $42,000and in Ontario the retiring teachers salary is at $95,000. In Kansas the teacher will get 65% of salary or $ 27,195 on in Ontario the retiring teacher will get $66,500. Each $10,000 of pension costs about $200,000 so the Kansas pension costs about $540,000 and in Ontario $1.3 Million. </i><br />
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<b>Kansas Proposals </b><br />
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<b>Senate Proposal:</b> <br />
<ul style="text-align: left;"><li>Investment return in future years is assumed to be 8% on a market value basis, unless<br />
otherwise indicated.</li>
<li><b>Tier I Members </b>- Employee contributions for Tier 1 members increase annually by 1.0% until 2015, the<br />
contribution rate for Tier 1 would be 6.0%. Beginning January 1, 2014,<b> raises</b> the benefits formula multiplier from 1.75% to 1.85% for all future years of service credited to Tier 1 members.</li>
<li><b>Tier 2 Members</b> - Tier 2 members who are first hired before July 1, 2013, would be provided a 90-day period of time established by KPERS to choose between two options:</li>
<li><b>Option 1</b>: Continue to pay a 6.0% employee contribution rate, but forego the cost-of-living<br />
adjustment (COLA) currently associated with Tier 2 and retain the existing 1.75%<br />
multiplier.</li>
<li><b>Option 2</b>: Increase employee contributions by 2% with an employee contribution rate of 8% by CY 2015. Retain the COLA and receive higher 1.85% multiplier for future service, effective January 1, 2014.</li>
</ul>Note: Ontario pensions generally accrue at the rate of 2% per year. Some have faster accruals. So for 35 years of service in Ontario an employee gets 70% (2% per year times 35 years) <br />
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<b>House Proposal </b><br />
<ul style="text-align: left;"><li><b>Reduced Benefit Formula Multiplier.</b> For both Tier 1 and Tier 2 active members, reduces the<br />
benefits formula multiplier from 1.75% to 1.40% for all years of service earned on and after July 1, 2012.</li>
<li><b>Sale of State Surplus Real Estate</b> Groups.</li>
<li><b>Defined Contribution (DC) Plan for Future Members</b>. On and after July 1, 2013</li>
<li><b>Employee Contributions</b>. Active members would be required to contribute 6.0% of their<br />
compensation to their individual mandatory contribution accounts. The contributions would<br />
be pre-tax for federal income tax purposes. All employee contributions vest immediately. </li>
<li><b>Employer DC Contributions.</b> Employers would contribute 3.0% of each active member’s<br />
compensation to an employer contribution account for that member. Employer contributions<br />
would vest after five years of service.</li>
</ul>In the proposed changes we can see huge differences. Even though the House plan is much more drastic, the article states that "neither will restore full financial health to the pension funds for at least another decade," <br />
<ul style="text-align: left;"></ul><b>Big challenges Ahead</b><br />
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As you read through this article you can get a taste of the challenges that need to be made in Canada as well. Unfortunately it is a very complicated issue and most politicians and union member have no understanding of the issue.<br />
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If you are able to understand the issue from the Kansas examples, it is imperative that you make your voice heard. Politicians don't want to touch the issue, unions have no remorse about plundering your pocketbook and most of us can't understand the details.<br />
<br />
The next move is for governments is to study the issue so they can understand it. It is a national travesty that in Canada over the past few years we have had several Expert Commissions on Pensions, two federal government studies, the Quebec Pension Plan report and all provinces have completed major reviews of retirement savings. Yet not one word was written on the biggest crisis of all, public sector pensions. <br />
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The next move? In the words of one politician about the Kansas situation: <br />
<blockquote>Kansas state Sen. <a href="http://kslegislature.org/li/b2011_12/year1/members/sen_king_jeff_1/">Jeff King</a>, an Independence Republican serving on the conference committee said that because of projections like that one, he favored going along with another recommendation in the Senate package, which calls for the establishment of a six-month blue ribbon commission formed specifically to weigh such alternatives.</blockquote><a href="http://www.kansasreporter.org/73540.aspx"><iframe allowfullscreen="" frameborder="0" height="390" src="http://www.youtube.com/embed/jEnfnH7UCyE" title="YouTube video player" width="640">&lt;p&gt;&amp;amp;amp;amp;lt;p&amp;amp;amp;amp;gt;&amp;amp;amp;amp;amp;amp;amp;amp;lt;p&amp;amp;amp;amp;amp;amp;amp;amp;gt;http://www.&amp;amp;amp;amp;amp;amp;amp;lt;span style="background: none repeat scroll 0% 0% yellow;" class="goog-spellcheck-word"&amp;amp;amp;amp;amp;amp;amp;gt;kansasreporter&amp;amp;amp;amp;amp;amp;amp;lt;/span&amp;amp;amp;amp;amp;amp;amp;gt;.org/73540.&amp;amp;amp;amp;amp;amp;amp;lt;span style="background: none repeat scroll 0% 0% yellow;" class="goog-spellcheck-word"&amp;amp;amp;amp;amp;amp;amp;gt;aspx&amp;amp;amp;amp;amp;amp;amp;lt;/span&amp;amp;amp;amp;amp;amp;amp;gt;&amp;amp;amp;amp;amp;amp;amp;amp;lt;/p&amp;amp;amp;amp;amp;amp;amp;amp;gt;&amp;amp;amp;amp;lt;/p&amp;amp;amp;amp;gt;&lt;/p&gt;</iframe></a></div>Unknownnoreply@blogger.com8tag:blogger.com,1999:blog-7288252569905355792.post-34086579387402741292011-04-21T10:41:00.001-04:002011-04-21T11:33:25.252-04:00University Pensions Driving Tuitions Higher<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-DIxloPaPx68/TbBAVJ0xXRI/AAAAAAAAAgE/1tTZsZHtUvE/s1600/Dalhousie+.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-DIxloPaPx68/TbBAVJ0xXRI/AAAAAAAAAgE/1tTZsZHtUvE/s1600/Dalhousie+.jpg" /></a></div><br />
<br />
<br />
<div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="color: black; font-family: georgia,serif; font-size: small;">It appears that Dalhousie is suffering from the same financial problems as many universities across the country. The pension costs for an aging workforce are killing them. </span><span style="font-size: small;"><a href="http://thechronicleherald.ca/Front/1238673.html"><span class="Content_Lg-Headlines-links">Dalhousie spending big bucks on university brass</span></a></span><span style="color: black; font-family: georgia,serif; font-size: small;"></span><br />
<span style="color: black; font-family: georgia,serif; font-size: small;"><br />
</span><span style="font-family: georgia,serif; font-size: small;">We are now seeing the conflict plaguing all government organizations. </span><span style="color: black; font-family: georgia,serif; font-size: small;">The gold-plated defined benefit pensions that the staff in the public sector enjoy have melted down and are no long sustainable without large injections of cash.</span><span style="font-family: georgia,serif; font-size: small;"> It creates a choice between more services for students or more gold-plated benefits for management and staff. <br />
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The large increases in tuition are expected to generate an additional $14.6 million in revenue. It happens to coincide with a <a href="http://as01.ucis.dal.ca/fs/pdf/BAC_43_Report.pdf">$11 Million injection</a> (Note C) into the pension staff planned last year. This is on top a regular annual pension contributions of $19 Million. It appears that the pension fund is short in excess of $100 Million and the administration is worried about being able to retire in comfort. <br />
<br />
In 2002 the university contributed $4.7 Million into the pension fund and it has increased every year since then and last year the <a href="http://as01.ucis.dal.ca/fs/pdf/Annual_Report_2010_for_Web_-_Final.pdf%20">regular pension payment was $19 Million</a>. Despite more than $135 Million of taxpayers money going into the fund since 2002 it is still woefully short. The employees contributed $91 Million over that same period. <br />
<br />
The Economist this week featured a report on pensions of the kind offered at Dalhousie. They noted "A pension promise can be easy to make but expensive to keep. The employers who promised higher pensions in the past knew they would not be in their posts when the bill became due" Well the bill is due and at most universities the numbers of retirees is reaching record numbers. These easy promises are becoming expensive. <br />
<br />
The pensions plans are not sustainable and it is unfair to ask students to pay more or suffer less services to pay for these gold-plated plans. <br />
<br />
Pension contributions on the plan are woefully short and they will suffer shortfalls for many years to come. That is why the request to the government for solvency relief is so important. Solvency relief is like a mortgage that is amortized over 30 years instead of 10 or skipping a payment on your credit card. <br />
<br />
Why not have employees pay their fair share? <br />
<br />
The taxpayer (university) funds 16% of employee salaries into the pension fund and the employees only have to come up with 6.15%. The CD Howe has estimated that the true cost of these pensions are 34% of annual salary. The shortfalls are built in at these contribution rates. Even worse, as salary costs skyrocket so do pensions. Pension funding is like trying to chase a rocket, unless pensions are capped it will never happen. <br />
<br />
The pensions are based on 70% of the last 3 years of salary of the retiring employees. The faculty at the university is earning an average wage over $100,000 per year, this means a pension in excess of $70,000 per year including CPP. Many of these employees are eligible to retire at age 55 and will earn this pension for the rest of their lives. If they live to age 80 this will be over $2.3 million in pension income when indexed for inflation. To fund a pension like this takes pool in excess of $1 Million. </span><span style="font-size: small;"><br />
<br />
Then there are the Super Sized pensions, those of the senior administration staff. The article mentions that one income is at $360,000. This income level will generate a pension in excess of $250,000 for life and will require a pool of $4 Million. </span> <span style="font-size: small;"><br />
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Its time to change these pensions. Firstly, convert them into defined contribution, the kind most taxpayers have. Limit them to a reasonable amount say $80,000 per year, twice what the average wage earner makes. Make the employees pay their fair share and not rely on the generosity of taxpayers who will never see a pension close to this. Why allow workers to retire at age 55 when government around the world facing the same crisis are raising the age of retirement? </span> <span style="font-size: small;"><br />
<br />
Our students deserve better than this, its time for a change. </span> </div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Bill Tufts </span></div><span style="font-family: Georgia,"Times New Roman",serif; font-size: small;">Fair Pensions For All </span><br />
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</div>Unknownnoreply@blogger.com8tag:blogger.com,1999:blog-7288252569905355792.post-48624566666551447542011-04-18T13:51:00.001-04:002011-04-18T13:54:12.808-04:00Rising gas prices sandbag economy<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-LUqnWQmeEmE/Taxxqt6vzsI/AAAAAAAAAgA/caDvSQkVbC0/s1600/high-gas-prices.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="http://1.bp.blogspot.com/-LUqnWQmeEmE/Taxxqt6vzsI/AAAAAAAAAgA/caDvSQkVbC0/s320/high-gas-prices.jpg" width="304" /> </a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;">Rising gasoline prices are having a dramatic effect on the Canadian economy. A $1 rise in the price of gasoline will suck $32 Million a day out of goods and services that Canadians would otherwise be spending money on. This adds up to over $11 Billion a year. </div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"> </div><div class="separator" style="clear: both; text-align: left;"></div><div class="separator" style="clear: both; text-align: left;">There is a multiplier effect on this money as Canadians decide to use their car less and stay home When they stay home they are not spending money in restaurants, amusement parks, cinemas or other places we go to for entertainment. Alternatively for some markets there may be a rise in spending as Canadians choose less costly alternatives for spending their money. For example, MacDonalds over a full service restaurant. </div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;">My contention is that overall the cost of gasoline will be a big drag on the economy as it sucks money from other areas of spending. If that money was spent in a restaurant for example, the restaurant will be using it to pay salaries and food and beverages. This would all contribute to the growth of our GDP. True the money spent on gasoline will be considered part of our GDP, but how much of it will truly go back into the economy. will gas stations be hiring more staff or building more stations? Probably not. </div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;">Some interesting information for this analysis come from <a href="http://www.statcan.gc.ca/daily-quotidien/100721/dq100721e-eng.htm">Statscan - Motor vehicle fuel sales </a>and <a href="http://gasbuddy.com/gb_retail_price_chart.aspx">Gas Buddy.</a> Canadian spend about $4 Billion a month eating and drinking outside the home <a href="http://www.statcan.gc.ca/daily-quotidien/110228/t110228c1-eng.htm">Food services and drinking places </a></div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"></div>Bill Tufts<br />
Fair Pensions For All <br />
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</div>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-7288252569905355792.post-48893271514770934522011-04-18T11:01:00.002-04:002011-04-18T13:55:59.280-04:00The media is starting to get it.<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-VoAOMS7MQeA/TaxSfKS6RQI/AAAAAAAAAf8/rSXtiydgNg0/s1600/newmedia.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="http://1.bp.blogspot.com/-VoAOMS7MQeA/TaxSfKS6RQI/AAAAAAAAAf8/rSXtiydgNg0/s320/newmedia.jpg" width="320" /></a></div><br />
<br />
<div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">One of the key purposes of this blog is to bring attention to the growing pension problem and to try educate those who make policy (politicians) or report on pensions (media). It is a complicated issue that has concepts and a language that is difficult for many to understand. In interviews with other pension experts one of the interesting aspects of pensions is that most employees who have defined benefit pension plans have no idea of the value of the plans. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Clarity is required to have a well educated public discussion on pensions.</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">To try an bring about clarity the CNPA association for newspapers in California focused on the issue at a recent conference. The coverage of the conference was reported on in <a href="http://www.lodinews.com/blogs/marty_n_rich/article_4813f0c8-6918-11e0-8fd7-001cc4c002e0.html%20"><span class="blox-headline entry-title">Publishers preview pension problems </span></a><span class="blox-headline entry-title">The article pointed out: </span></span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">• Public employee unions want to deny the problem but the truth is dawning on them and their members.</span><br />
<span style="font-size: small;">• Many politicians underestimate the problem either because they don't understand it or don't want to tell the voters they have to cut services and raise taxes to correct a problem they didn't see coming when they gave away the store.</span><br />
<span style="font-size: small;">• Some politicans do get it. They are bargaining hard with unions and pushing reforms. They are having luck reducing the pensions of employees who will be hired in the future.</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">At the pension portion of the conference one presenter was Dan Borenstein. Dan is a veteran in the pension battles reporting for the <a href="http://www.contracostatimes.com/daniel-borenstein">Contra Costa Times</a>. He has brought to light many pension problems in the state of California. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">There continues to be a litany of problems for public sector pensions. Not only in the US but here in Canada as well. In Canada we need reporters who will become pension crusaders. Until that happens the issue will remain under the sight lines of most Canadians and politicians who hate the issue will continue to sweep it under the carpet until there is a rising crescendo of taxpayer voices that demand to be heard. In the meantime the problem will float merrily along with more and more lip service being paid to it, without any real action being taken.</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">In the meantime we hope that more article like this one will be seen in the Canadian media. <a href="http://www.desertdispatch.com/opinion/pension-10691-employees-government.html">There was no recession for gov't pensions.</a></span><span style="font-size: small;"> The article points out that: </span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Only government-employee union officials at this point are denying the reality of California's pension crisis, as public pension debts estimated as high as a half-trillion dollars are crushing state and local governments and threatening to increase the burden on already hard-pressed California taxpayers. Meanwhile, the disparity keeps growing between government employees, who retire with guaranteed cost-of-living-adjusted benefits that too often top $100,000 a year, and private-sector employees who must rely on 401(k)-style plans supplemented by the increasingly shaky Social Security system.</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">As you are aware the issue is as big a problem in Canada. A 401K is the US version of our RRSP. Lets hope the media gets on board with a thorough discussion of pensions and begin to address the issue more. Oh well, maybe when the election is done. We remember Kim Campbell stated, an election campaign was no time to discuss serious issues!</span></div><br />
BIll Tufts<br />
Fair Pensions For All </div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-2761711766415417152011-04-12T09:32:00.009-04:002011-04-15T07:32:00.007-04:00The Roadmap for the Future<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-ntmXHKQGwUM/TaRV-mkupbI/AAAAAAAAAf4/KkANpTQYFv8/s1600/roadmap+for+america%2527s+future+paul+ryan.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="345" src="http://1.bp.blogspot.com/-ntmXHKQGwUM/TaRV-mkupbI/AAAAAAAAAf4/KkANpTQYFv8/s640/roadmap+for+america%2527s+future+paul+ryan.jpg" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-rbGCsgLPN0c/TaRQ913vC7I/AAAAAAAAAf0/22XQWlBuQ9U/s1600/Time+Bomb+Clock.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><br />
</a></div><br />
<div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">As our book nears completion and the last details are put in place and polished up there is some apprehension about whether we have covered all the necessary material bases and whether the concepts that we have developed and the ones we have used are appropriate. It is nice to be vindicated with news that covers some of our ideas and adds strength to our concepts.</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">A recent article in the Financial Post garnered much attention over the past week and was mentioned in the Daily Reckoning newsletter in the article from Bill Bonner. I recommend you sign up for the free newsletter from the Daily Reckoning. It is focused on investing but also provide great political and social commentary and how it relates to our investments. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Bill Bonner noted an article from </span><span id="search" style="font-size: small;">Christopher Caldwell in the Financial Times called,<b> A Bankrupt Nation Wakes Up. </b>In the article Caldwell quotes an up and coming new Republican from Wisconsin who is ringing the alarm bells about the sustainability of social security, pension and healthcare costs:</span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Mr Ryan views debt as an “existential threat”, a great drama whose cause is self-indulgence and whose end is enslavement</span></blockquote><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">“We face two dangers: long-term economic decline as the number of makers diminishes and the number of takers grows and, worse, gradual moral-political decline as dependency and passivity weaken the nation’s character.”</span></blockquote><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">In retrospect, the story of the past half century is that Americans found a way to extract money from future generations and leave them with the bill. What they have been enjoying is not prosperity but luxury. As Mr Ryan sees, they face the serious and open question of whether they are morally capable, over the long term, of living within their means.</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"> </span><span id="search" style="font-size: small;">Please check out Ryan's program and analysis called <a href="http://www.roadmap.republicans.budget.house.gov/"><b>Road Map for America </b></a>it is an excellent work that outlines the dangers of the coming demographic timebomb. You will be hearing lots about it in the months to come!</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span id="search" style="font-size: small;"></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span id="search" style="font-size: small;">Bill Tufts </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span id="search" style="font-size: small;">Fair Pensions For All </span></div></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-2473434925151935902011-04-05T15:01:00.000-04:002011-04-05T15:01:34.575-04:00Total government spending on Wages and Salaries<div dir="ltr" style="text-align: left;" trbidi="on">In dong some research for my upcoming book I found some interesting statistics about the total cost of government employees.<br />
<br />
In 2010 the Province of Ontario spent $118 Billion. Of this amount $71.2 Billion went into the wages and salaries packet of provincial employees. This means that 60% of the total spending in the province of Ontariowas for wages and salaries. Does this include the benefits and pensions as well? I suspect not.<br />
<br />
The province spent another $ 9.5 Billion or 8% of its money on debt service. This means that the operating budget on discretionary items in the province was $110 Billion. This moves the wages and salaries up to 65% of spending and then we can add in another $8 Billion in pensions this year. So it appears the government spending amount for the compensation package of it's employees is in excess of 70% of total spending. <br />
<br />
I guess we know where Drummond has to look.<br />
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You can find this information here.<a href="http://www40.statcan.gc.ca/l01/ind01/l3_3764-eng.htm?hili_none"> Statscan Tables by Subject </a><br />
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</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-8703157669959103142011-03-31T22:02:00.001-04:002011-03-31T22:03:17.293-04:00Laurentian Medical College makes cut backs on staff to pay for pension<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-xiN0Gl1-75I/TZUwiNewqsI/AAAAAAAAAfw/m9FZ2KVbxZE/s1600/Laurentian.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="66" src="http://4.bp.blogspot.com/-xiN0Gl1-75I/TZUwiNewqsI/AAAAAAAAAfw/m9FZ2KVbxZE/s400/Laurentian.jpg" width="400" /></a></div><br />
<br />
There was an article in the Sudbury Star that shows the increasing danger of gold-plated pensions.<br />
<br />
<a href="http://www.thesudburystar.com/ArticleDisplay.aspx?e=3054027">24 jobs cut at Northern Ontario School of Medicine.</a> <br />
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NOSM is operated by Laurentian University in Sudbury. It is unacceptable for the people of Ontario at a time when there is a strain on our health system and a shortage of qualified health care employees to be cutting back staff to pay for gold-plated pensions.<br />
<br />
This came out on the same day that the province released its Sunshine List and shows over 240 staff at Laurentian earning over $100,00 per year. This is up from just 180 in 2008. Each one of these positions comes with a pension worth 70% of this income. <br />
<br />
One manager at the University earns $304,000 which does not take into account the gold-plated pension. A manager will be entitled to a pension valued at $212,000 per year or 70% of his final salary when fully qualified. This type of pension has a cash value of about $3.4 Million.<br />
<br />
Last year the college contributed $ $11.7 Million into their staff pension funds. This amount is up from $5.9 million in 2008, an increase of $5.8 million or 98%. If used to hire additional administration staff at $50,000 per year, this amount would allow for an additional 116 staff members. <br />
<br />
Management decides to allocate this money in pensions and benefits rather than hire more staff. This was not money going into enhanced student services but to bolster the personal pension accounts of managers. <br />
<br />
We are now seeing the conflict plaguing all government organizations. It is the choice between more services for students or more gold-plated benefits for management and staff. Being forced to cut back and create savings where do you think the money will come from, compensation packages or services. <br />
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It appears that the students and taxpayers of Ontario will lose on this one. <br />
<br />
Bill Tufts<br />
Fair Pensions For All<br />
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</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-36955517294106323332011-03-31T17:58:00.003-04:002011-03-31T18:02:36.618-04:00Is the Air Canada pension plan too rich?<div dir="ltr" style="text-align: left;" trbidi="on"><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">.</span><br />
<span style="font-size: small;">In 2009 the Air Canada pension plans were short $2.9 billion despite the fact between 2004 and May 2009 the company had pumped $1.7 Billion into the plan. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Now they are requesting money from Canadian taxpayers. With Ministers, high level officials senior government officials and Members of Parliament. All of whom have gold-plated pensions funded by you. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">What do you think their response was? I you know please send me an update. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">See the video here.</span></div><br />
<span style="font-family: Georgia,"Times New Roman",serif; font-size: small;"><span style="font-size: large;"><a href="http://www.youtube.com/watch?v=CLzIzbq261M&feature=related"> The Conversation Continues</a></span></span><br />
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<span style="font-family: Georgia,"Times New Roman",serif; font-size: small;">Bill Tufts </span><br />
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</div>Unknownnoreply@blogger.com5tag:blogger.com,1999:blog-7288252569905355792.post-65810399365519944142011-03-18T11:07:00.001-04:002011-03-18T11:09:08.789-04:00Ontario Teacher's Pension to Hit the Wall in 2014.<div dir="ltr" style="text-align: left;" trbidi="on"><br />
From the archives a member of the Ontario Secoundary School Teachers Federation<span style="font-size: x-small;"><i> (thanks Joe)</i></span><br />
<br />
<iframe allowfullscreen="" frameborder="0" height="390" src="http://www.youtube.com/embed/diS6f8Jns40" title="YouTube video player" width="640"></iframe><br />
<br />
Despite hefty contributions and huge asset accumulations there is a crisis and it will hit in 2014 with a vengeance!<br />
<br />
Bill Tufts<br />
Fair Pensions For All </div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-90312556679744097132011-03-17T08:42:00.002-04:002011-03-20T22:08:31.264-04:00Working on pension issues<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="https://lh3.googleusercontent.com/-BvBrk0Ow66c/TYIBfB5AE1I/AAAAAAAAAfE/BRk742hDHSE/s1600/MLA+pensions.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="292" src="https://lh3.googleusercontent.com/-BvBrk0Ow66c/TYIBfB5AE1I/AAAAAAAAAfE/BRk742hDHSE/s400/MLA+pensions.jpg" width="400" /></a></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">I have not had much time to be posting news to my blog. Does someone want a job? </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="color: black; font-size: small;">It is a very sad week for me as my brothers wife passed away unexpectedly yesterday. She was the mother of 5 boys. May she rest in peace and God be with my brother and his family. <br />
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<b>Pension News </b><br />
<br />
It was a busy day today. I got a call for a CHML radio interview from an article written in the Hamilton Spectator. Then there were two other editorials, one in the National Post and one in the St John Telegraph Journal. Then just now another request for interview from a show in Halifax on the MLA pension issue in NB. <br />
<br />
Here is a copy of a radio interview on a local radio station CHML 900 in Hamilton <br />
<a href="http://www.900chml.com/Station/BillKellyShow/Audio.aspx" target="_blank">http://www.900chml.com/<wbr></wbr>Station/BillKellyShow/Audio.<wbr></wbr>aspx</a><br />
<br />
<b>There was a live radio interview the Rick Howe Show from Halifax. </b>It was on teh new New Brunswick pension proposal. <br />
<a href="http://www.news957.com/inside/staff/124014--rick-howe" target="_blank">http://www.news957.com/inside/<wbr></wbr>staff/124014--rick-howe</a><br />
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It was referred off this editorial in the St John Telegraph Journal <br />
<a href="http://telegraphjournal.canadaeast.com/opinion/article/1389230" target="_blank">http://telegraphjournal.<wbr></wbr>canadaeast.com/opinion/<wbr></wbr>article/1389230</a><br />
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Also there was an editorial that was printed in the National Post. <br />
<a href="http://www.nationalpost.com/todays-paper/CUPE+numbers+base/4446407/story.html" target="_blank">http://www.nationalpost.com/<wbr></wbr>todays-paper/CUPE+numbers+<wbr></wbr>base/4446407/story.html</a><br />
<br />
Hamilton Spectator <br />
<a href="http://www.thespec.com/news/local/article/502317--wages-and-benefits-strangling-city-budgets" target="_blank">http://www.thespec.com/news/<wbr></wbr>local/article/502317--wages-<wbr></wbr>and-benefits-strangling-city-<wbr></wbr>budgets</a><br />
</span><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Your keeping busy blogger </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Bill Tufts </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Fair Pensions For All </span></div></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-89417597589218972722011-03-15T22:29:00.003-04:002011-03-15T22:34:00.717-04:00UK pension comparison<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://lh3.googleusercontent.com/-l2F3JuqI0Sg/TYAf4A6uG-I/AAAAAAAAAfA/c-ngPL8i6A0/s1600/Pension+Contributions+Chart+.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://lh3.googleusercontent.com/-l2F3JuqI0Sg/TYAf4A6uG-I/AAAAAAAAAfA/c-ngPL8i6A0/s640/Pension+Contributions+Chart+.gif" width="640" /> </a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><b><span style="font-size: x-small;">Chart from Statscan 2007 Note: RRSP assets in Canada total about $700 Billion </span></b></div><br />
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I received an excellent analysis and comparison of pensions in Canada and the UK. <br />
<br />
Bob Parsons had written to me in response to the blog I wrote about the Hutton pensions report that was released in the UK. There are big difference between the public sector plans in Canada and those in the UK.<br />
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The UK pensions are not pre-funded and are paid on a pay as you go basis. This has created huge problems for the UK as the economy has slowed down and there has been a choice to be made for politicians between services and the compensation packages of the public sector.<br />
<br />
It feels like the taxpayers is losing as the public sector and politicians dictate where our tax dollars go. Most taxpayers feel it is going directly into the pockets of the elected officials and the civil service.<br />
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As I am doing some research for my book I ran across a report from the BNAC back in 2009 that provided a good comparison between the UK, USA and Canada. Basically all systems are in trouble and the UK is the worst off of all. <a href="http://www.acus.org/publication/public-sector-pensions-report-transparency-standards-lacking" title="Public Sector Pensions Report - Transparency Standards Lacking">British-North American Committee (BNAC) report</a><br />
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One of the reasons that the systems has gotten out of balance was described in this short editorial letter <a href="http://www.bclocalnews.com/opinion/letters/117965954.html">Market Balance Needed </a><br />
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On to Bob's letter. Thanks for sending this excellent letter Bob<br />
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After seeing the post you made on Lord Hutton’s pension report I became curious to find out what type of pension plan public servants in the UK have compared to our federal government pension plan.<br />
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I printed off the nuvos pension scheme guide pamphlet. Here are some of the things I discovered.<br />
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1. In the UK employees can opt out of their pension plan. We can not do this in Canada. (Section 5 Do I have to join nuvos?)<br />
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2. They only pay 3.5% we pay over 7% for superannuation and CPP which in my case last year was resulted in me paying 9.25%. (Section 9 How much do I pay?)<br />
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3. They build up pension value at 2.3% a year compared to our 2% for the Canadian Federal Government public employee pension plan. (Section 17. How do you work out my pension?)<br />
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4. They use the Retail Price Index which provides a much higher rate of increase than the Consumer Price index we use. (Section 18. Will the pension I have build up in value?)<br />
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5. They can earn a pension up to 75% of base salary while we can only earn up to 70%. (Section 21 Is there any limit to the size of my pension?)<br />
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6. They base their pension the highest of<br />
a) Your pensionable earnings in your final year, or<br />
b) your highest pensionable earnings in any of the last 10 scheme years: or<br />
c) your highest average of three consecutive years’ pensionable earnings.<br />
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Ours is based on the best 5 years. (Section 21 Is there any limit tp the size of my pension?)<br />
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7. They allow you to take part of your pension as a tax free lump sum. We can not do this (Section 22 Can I take a tax-free lump sum?)<br />
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8. They are allow to collect their pension while continuing to work, although you have to 75 to do this. We can not do this. (Section 29 What if I want to work beyond my pension age?)<br />
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Even with Lord Huttons recommended increase in contributions for employees they will be paying far less than we are here in Canada.<br />
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Some other factors you have to take into account is that we have started to fund our pension plan since 2000. We have build up net assets of over $50 billion. The fund has being growing at a rate almost twice as much as the federal government is paying for public service pensions on an annual basis. I believe the UK is still a pay as you go scheme. So we are in much better shape.<br />
<br />
In 2009 federal government paid 1.01% of total government expenditures on public sector pensions. (Public Accounts 2009, Public Service Pension Plan Report 2009). In terms of GDP it is below .2% of GDP. Your colleague Leo over at Pension Pulse ran an interesting article on the UK public servant pension plan. He showed a graph that showed that their public sector pensions were more than 1.6% of their GDP which is more than 8 times ours.<br />
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I had a quick look at several US state public servant pension plans. They have costs between 3 to over 6% of total expenses. In many states employees do not pay anything toward their pension costs and in the ones that do I could not find any that contribute anywhere near as much as we do. Even Scott Walker is not asking his employees to contribute anywhere as much as federal employees in Canada have to pay. In every state I looked at they do not collect full income taxes on pensions, must do not collect any.<br />
<br />
I read your proposed solution, which is to copy the US federal employee pension plan, which is based on three elements. The first is an indexed defined benefit pension plan which is I think based on 1.1% of earned income each year. The second element is Social Security which is also an indexed defined benefit plan. The third element is a defined contribution plan in which the US government matches employee contributions up to a certain level. To be fair to public servants in Canada you need to increase the first element to make up for the fact that Social Security pays far more than CPP if you want to have equivalent pension plans in both countries.<br />
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The bottom line is that public employees in the UK currently get one hell of a better pension for 3.5% of their pay than we do here in Canada. Our pensions also pale in comparison to those at the state and federal level in the US. We pay a lot more for less pension benefits. <br />
<br />
Bill Tufts<br />
Fair Pensions For All </div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-32631693418277315632011-03-14T17:11:00.004-04:002011-03-14T17:59:53.986-04:00Net worth continues to climb - but for whom?<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"><a href="https://lh6.googleusercontent.com/-e62ylp6tiqs/TX59GTOyUDI/AAAAAAAAAe0/epmsE9q9rDo/s1600/Scales++-+.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="https://lh6.googleusercontent.com/-e62ylp6tiqs/TX59GTOyUDI/AAAAAAAAAe0/epmsE9q9rDo/s320/Scales++-+.jpg" width="320" /></a></div><br />
<div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">There was an article today in the Globe and Mail that shows that</span><span style="font-size: small;"> <a href="http://www.theglobeandmail.com/report-on-business/top-business-stories/canadians-are-still-in-deep-trouble-on-household-debt/article1940939/">Canadians are still in deep trouble on household debt</a></span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"> <b>Net worth continues to climb</b><br />
Wealth in Canada continues to rebound from the great crash. </span><br />
<br />
<span style="font-size: small;"> Overall household net worth increased 2.2 per in the fourth quarter to $6.2-trillion, following on the third quarter's 3-per-cent climb, Statistics Canada said today. </span><br />
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<span style="font-size: small;"> On a per capita basis, that's an increase to $181,700 from $178,200. </span><br />
<span style="font-size: small;"> "The gain in the Standard and Poor's/Toronto Stock Exchange composite index of about 9 per cent in the fourth quarter was reflected in rising values of household equities (including mutual funds) and pension assets, albeit at a slower pace than the previous quarter," the statistics gathering agency said.</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">This is good news for those Canadian who has some savings and pensions but for the great unwashed masses this really means nothing. </span><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">The last Statscan report on</span><span style="font-size: small;"> <a href="http://www.statcan.gc.ca/daily-quotidien/061213/dq061213c-eng.htm">Inequality in wealth</a> shows some pretty grim statistics. Although the numbers were from 2005 not too many Canadians who has seen much of an increase in their personal wealth. The trend is the wealthy continue to get wealthier and the rest... well not as well. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"></span></div><ul style="text-align: left;"><li style="font-family: Georgia,"Times New Roman",serif;"><blockquote class=""><span style="font-size: small;">Between 1999 and 2005, the median net worth of families in the top fifth of the wealth distribution increased by 19%, while the net worth of their counterparts in the bottom fifth remained virtually unchanged.</span></blockquote></li>
<li style="font-family: Georgia,"Times New Roman",serif;"><blockquote class=""><span style="font-size: small;">As a result, the top 20% of families held 75% of total household wealth in 2005, compared to 73% in 1999 and 69% in 1984.</span></blockquote></li>
<li><blockquote class=""><span style="font-size: small;">Part of the growth in net worth among families in the top 20% of the distribution was fuelled by increases in the value of housing.</span><br />
<ul><li><span style="font-size: small;">In both 1999 and 2005, the vast majority of these families (at least 95%) owned a house. During the six-year period, the median value of their principal residence rose a solid $75,000, reflecting sharp increases in housing prices.</span></li>
</ul><ul><li><span style="font-size: small;">In contrast, the value of holdings on a principal residence changed little among families in the bottom 20%. At most, 6% of these families owned a house during this time.</span></li>
</ul></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Here is a chart from Statscan chowing that the top 10% of Canadians control almost 60% of the total wealth of the country. I am afraid that this will part of the reason for social unrest in North America. </span><br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://lh3.googleusercontent.com/-DuebI8en4S4/TX6I9an_0mI/AAAAAAAAAe8/Q1d-g_ecxGU/s1600/GINI+-+1.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://lh3.googleusercontent.com/-DuebI8en4S4/TX6I9an_0mI/AAAAAAAAAe8/Q1d-g_ecxGU/s400/GINI+-+1.gif" width="372" /></a></div><div style="text-align: center;"><span style="font-size: small;"><br />
</span></div><span style="font-size: small;">Maybe this is what Michael Moore was ranting about in this video from the Wisconsin protests. <b> <a href="http://www.politifact.com/wisconsin/statements/2011/mar/10/michael-moore/michael-moore-says-400-americans-have-more-wealth-/">Michael Moore says 400 Americans have more wealth </a></b></span><span style="font-size: small;">Please listen to Part 2 of the video as well, it comes on automatically. <b><br />
</b></span></div><div style="text-align: left;"><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Here he is interviewed in a very interesting video on <b><a href="http://www.msnbc.msn.com/id/26315908//vp/41999558#41999558">The Rachel Maddow Show</a>.</b> Last Saturday there were in excess of 100,000 protesters in attendance at the Capital Hill in Wisconsin </span></div><div style="font-family: Georgia,"Times New Roman",serif;"></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"> As we do research for our upcoming book there are more and more instances of commentators suggesting a complete meltdown of our economy. One similar to what has happened in Japan. But the chances are we will not be able to borrow to the extent of 200% of GDP that Japan has. Japan has borrowed this money to sustain their standard of living.</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div class="separator" style="clear: both; font-family: Georgia,"Times New Roman",serif; text-align: center;"><span style="font-size: small;"><a href="https://lh4.googleusercontent.com/-grd6dUf9MTA/TX6DpTdo9YI/AAAAAAAAAe4/tmkdrlhVt-8/s1600/Nikkei+-+225++.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="290" src="https://lh4.googleusercontent.com/-grd6dUf9MTA/TX6DpTdo9YI/AAAAAAAAAe4/tmkdrlhVt-8/s400/Nikkei+-+225++.png" width="400" /></a></span></div><div style="font-family: Georgia,"Times New Roman",serif; text-align: center;"><span style="font-size: small;">The Japanese stock market is down 75% since it's highs in 1989 </span></div><div style="font-family: Georgia,"Times New Roman",serif; text-align: center;"><span style="font-size: small;">Courtesy Seekingalpha.com</span></div><div style="font-family: Georgia,"Times New Roman",serif;"></div><div style="font-family: Georgia,"Times New Roman",serif;"></div><h2 class="headLine" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><a href="http://www.ctv.ca/CTVNews/World/20110304/gerald-celente-worldwide-insurrection-forecast-110306/">Hang the rich: Great war inevitable, pundit predicts</a></span></h2><h2 class="headLine" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><a href="http://www.futuresearch.com/articles.php?showsite=148">Richard Worzel - Revolting Civil Servants</a></span></h2><h2 class="headLine" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: Georgia,"Times New Roman",serif; font-size: small;">Stephen Gray -</span><span style="font-size: small;"><a href="http://graysinfo.blogspot.com/2011/03/are-we-seeing-political-treason.html">Are we seeing political treason?</a></span></h2><h2 class="headLine" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"> </span></h2><h2 class="headLine" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"></span></h2><h2 class="headLine" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Bill Tufts </span></h2><h2 class="headLine"><span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;">Fair Pensions For All </span></span></h2></div></li>
</ul><span style="font-size: small;"> <a href="http://www.statcan.gc.ca/daily-quotidien/061213/dq061213c-eng.htm"></a></span></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-38832999656715856742011-03-11T13:51:00.000-05:002011-03-11T13:51:04.615-05:00Landmark Report on Public Sector Pensions<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="https://lh5.googleusercontent.com/-5I8mLCDjiVk/TXpu4W2lSlI/AAAAAAAAAew/y_r9L8iYBsA/s1600/lord-hutton.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="426" src="https://lh5.googleusercontent.com/-5I8mLCDjiVk/TXpu4W2lSlI/AAAAAAAAAew/y_r9L8iYBsA/s640/lord-hutton.jpg" width="640" /></a></div><br />
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<div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>In the UK a special report on pensions looking into the sustainability of public sector pensions has been released. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span><a href="http://www.hm-treasury.gov.uk/pensionscommission">Pensions Commission</a> </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>Lord Hutton a former Labor minister in the UK released the report that shows that the current system of public sector employees pensions is not fair to taxpayers or adequate for employees in its current form. </span><br />
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<span>He is urging that profound changes be made to the system for it to be sustainable in the long-term. His point of view is that we cannot continue on as were are and major changes are required. </span></span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>The UK has a pension system that is very similar to the one that Canada has for its public sector employees. It is based on the same plan design and very similar pension formulas. The report would be the star of a good road map towards changes here as well. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>Hutton examined whether the current system is fair to employees and fair to taxpayers. What he discovered is that taxpayers are responsible for most of the future risk associated with these types of plans. These risk include <i>investment; inflation; salary; and longevity risk.</i></span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>There are also several gaps in fairness between what the public sector gets in pensions and what government workers get or should I say don't get. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>The two major recommendations were made in the report. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.75in; text-indent: -0.25in;"><span style="font-size: small;"><span>·<span style="font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span>The public sector should move from a final salary pension scheme to one that is based on a career average</span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.75in; text-indent: -0.25in;"><span style="font-size: small;"><span>·<span style="font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span>The age of retirement should be the same for all taxpayers both in the private sector and the public sector. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>The UK has seen a similar trend in pension coverage. In 1997 about 30% of employees had access to a DB plan with overall coverage including DC edging 50%. By 2010 those numbers had dropped dramatically with only about 10% of employees in DB plans and overall coverage about 35% including DC plans. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>About 80% of the public sector in the UK has a defined benefit final salary pension plan. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>The report outlined several key principles along with extensive discussion on each of the main points. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span><b>Affordable and sustainable</b> - As employees get closer to retirement age their wages rise dramatically and the value of their pensions do as well. A greater cost falls onto taxpayers as the wage levels rise </span></span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><div class="MsoNormal"><span style="font-size: small;"><span>In final salary schemes, members will have paid contributions to the scheme based on something similar to their average salary, but will receive benefits based on their final salary. Taxpayers will pick up the cost of the difference between average and final salaries and members will benefit where final salaries are higher than average salaries. This effect will be particularly visible where people have experienced rapid salary growth. In average salary schemes, members bear more of the risk – salary levels throughout a member’s career will determine their income at retirement as well as their contributions to the scheme. </span></span></div></blockquote><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span><b>Adequate and Fair</b> - There is a big gap between those at lower pension wage level in the public sector and those at higher levels. This is unfair because high income employee receive almost twice the value of their contributions than lower income employees do. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>The report points out the there are many risks associated with pensions over the long term including investment risk, inflation risk, salary risk and longevity. The current system puts most of the risk on taxpayers for future funding . </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span><b>Supporting productivity</b>:- It is interesting that the report points out the "golden handcuffs" created by defined benefit plans prevents labour mobility within the economy. It recommends that more flexibility would be better for the economy</span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>Supporting productivity:- It is interesting that the report points out the "golden handcuffs" created by defined benefit plans prevents labour mobility within the economy. It recommends that more flexibility would be better for the economy</span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span><b>Transparent and simple</b>: - The report complained that there is little transparency on the cot of PS pensions. that taxpayers have no way of estimated what the costs are associated with a PS pension. </span></span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><div class="MsoNormal"><span style="font-size: small;"><span>Transparency and effective oversight of public service schemes is required for public service workers and taxpayers to have confidence in the system and improve the quality of debate about the future of public service pensions.</span></span></div></blockquote><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span></span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>This report is the basis for a good formula that would make Canada's pension system fairer and more sustainable., as well. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>Focusing on fairness there were many interesting observations made by Hutton. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>The report points our the generational risk in the current DB plan. For example, as the real costs of DB plans become apparent the younger employees pick up more burden. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div style="font-family: Georgia,"Times New Roman",serif; text-align: left;"><span style="font-size: small;">For example, the OMERS pension plan offered its members a multi-year contributions holiday. As well since the early 2000's contribution rates have doubled. The early members in the DB plan paid at the old rates but new members will be paying much higher rates for most of their careers. </span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.5in;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>The sustainability of the system was questioned. It recommended some sort of a cap on taxpayers contributions into the plans. For example in Ontario the cost of taxpayers contributions into it's biggest 3 plans has grown by 400% over the past decade. At the same time pension plan shortfalls have not diminished. OMERS is on it's way to projected $8 Billion shortfall and Ontario Teachers is still sitting on a $17 Billion shortfall. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.5in;"><span style="font-size: small;"><span><i>The Commission recommends that public service employers take greater account of public service pensions when constructing remuneration packages and designing workforce strategies. to accrue further benefits in the present schemes for many decades would be unfair and inequitable to the new members coming behind them.</i></span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.5in;"><span style="font-size: small;"><span><i>There is clear evidence that the administration of pension schemes can benefit from</i></span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.5in;"><span style="font-size: small;"><span><i>economies of scale, particularly where existing schemes are below 100,000 members.</i></span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.5in;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>This bodes well for the creation of Canada's new PRPP. The report shows that the costs of administering a plan can drop to one-quarter the costs when comparing administration costs at small plans and large plans </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span> </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>One of the complaints that Hutton has was that during his investigation he found that there are big gaps in transparency and a lot more needs to be know about public sector pension plans. In this way both the employees and taxpayers can have confidence in the system. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.5in;"><span style="font-size: small;"><span><i>There should be a fairer sharing of risk between government (and ultimately</i></span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.5in;"><span style="font-size: small;"><span><i>taxpayers) and scheme members.</i></span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>In a recent OMERS report they highlighted the value of a employee pension. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.5in;"><span style="font-size: small;"><span><i>A member who retires at age </i><i>60 </i><i>with </i><i>32 </i><i>years of service and “best five” salary of $</i><i>48,000</i><i>. Total contribution of $</i><i>50,000 </i><i>was matched by employer. Total payment to member and surviving spouse, including inflation, is $</i><i>960,000 </i></span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.5in;"><span style="font-size: small;"><br />
</span> </div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span>Part of the report included benchmarking the UK against other systems in the world. The <a href="http://www.bbc.co.uk/news/business-11466273">BBC summarized</a> a few of these plans and they provide an interesting analysis. </span></span></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span> </div><h2 style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.25in;"><span style="font-size: small;"><span><i>Public pension schemes elsewhere</i></span></span></h2><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.75in; text-indent: -0.25in;"><ul style="text-align: left;"><li><span style="font-size: small;"><span>·<span style="font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span><b><i>France:</i></b><i> Public sector workers typically retire before 60, but there are plans to bring them in line with the private sector, who by 2012 will need 41 years of contributions with benefits based on the best 25 years' salary. There are also plans to raise the retirement age from 60 to 62.</i></span></span></li>
</ul></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.75in; text-indent: -0.25in;"><ul style="text-align: left;"><li><span style="font-size: small;"><span>·<span style="font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span><b><i>Sweden:</i></b><i> Payments are based on earnings across the career not just the final salary, with an automatic link between benefits and life expectancy.</i></span></span></li>
</ul></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.75in; text-indent: -0.25in;"><ul style="text-align: left;"><li><span style="font-size: small;"><span>·<span style="font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span><b><i>Netherlands:</i></b><i> Private and public sector schemes are similar, each with defined benefits. Dutch typically pay 1.75%-2% of earnings for each year of contributions.</i></span></span></li>
</ul></div><div class="MsoNormal" style="font-family: Georgia,"Times New Roman",serif; margin-left: 0.75in; text-indent: -0.25in;"><ul style="text-align: left;"><li><span style="font-size: small;"><span>·<span style="font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span><b><i>Chile: </i></b><i>Mandatory defined-contributions in public and private sectors. Employees pay 10% of their earnings, with top-up benefits for the poorest 60% of pensioners.</i></span></span></li>
</ul></div><ul style="text-align: left;"><li><span style="font-family: Georgia,"Times New Roman",serif; font-size: small;"><span>·<span style="font-size-adjust: none; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> </span><b><i>Greece:</i></b><i> Retirement age raised from 60 to 65, and minimum contributory period on full benefit up from 37 years to 40 by 2015.</i></span></span></li>
</ul><span style="font-family: Georgia,"Times New Roman",serif; font-size: small;"><span><i> Here is an excellent interview in video on the BBC </i></span></span>with Hutton. Here what he says about the issue<br />
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<div style="text-align: center;"><b><span style="font-family: Georgia,"Times New Roman",serif; font-size: large;"><span><i><a href="http://www.bbc.co.uk/news/uk-politics-12700321"> Lord Hutton Explains Pension changes </a></i></span></span></b></div><div style="text-align: center;"><span style="font-family: Georgia,"Times New Roman",serif; font-size: small;"><span><i> </i></span></span></div><div style="text-align: left;"><span style="font-family: Georgia,"Times New Roman",serif; font-size: small;"><span><i>Bill Tufts </i></span></span></div><div style="text-align: left;"><span style="font-family: Georgia,"Times New Roman",serif; font-size: small;"><span><i>Fair Pensions For All </i></span></span></div></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-86491517059876580232011-03-08T08:40:00.004-05:002011-03-11T11:56:41.267-05:00Tuitions rising over the cost of sky high salaries<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="https://lh6.googleusercontent.com/-UGqKEI_dmzs/TXYt2u35g_I/AAAAAAAAAeo/ug7QrNxyWbQ/s1600/Lakehead.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="214" src="https://lh6.googleusercontent.com/-UGqKEI_dmzs/TXYt2u35g_I/AAAAAAAAAeo/ug7QrNxyWbQ/s320/Lakehead.jpg" width="320" /></a></div><br />
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<div style="text-align: center;"> This picture is the scene in Thunder Bay over rising tuitions. </div><br />
I have been very busy the past few weeks writing with Lee Fairbanks our upcoming book on pensions. Our deadline for completion of the original manuscript is April 1st. Therefore I have not had much time to devote to my blog.<br />
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There were a series of articles about education that caught my eye. All about rising salaries and compensation paid the staff at universities.<br />
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It highlights the cost to society of having a shadow workforce that gets high and a large benefits package but never has to show up for work. These are retired public sector employees. <br />
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Students were protesting over the rise in tuition at Lakehead University. There are some very interesting insights into the situation written by someone from the next generation. The very ones saddled by the cost of this shadow workforce, paid very handsomely by taxpayers<span style="font-family: Georgia,"Times New Roman",serif; font-size: small;"> and do not work.</span><br />
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<b><a href="http://www.theargus.ca/articles/opinion/2011/03/so-what-do-we-do-now">So what do we do now? </a></b><br />
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<b><a href="http://www.theargus.ca/articles/news/2011/03/lakehead-university-governors-raise-tuition-as-much-as-1399">Board ignores alternatives to tuition hikes </a></b><br />
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<b> <a href="http://www.timescolonist.com/business/Editorial+Caution+needed+public+sector/4382740/story.html">University faculty demand salaries, forcing tuition rates through the roof.</a></b><br />
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<div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"> <a href="http://www.timescolonist.com/business/Faculty+salaries+tightly+controlled/4401076/story.html"><b>No really... we are fairly paid ... except for that double a few years ago</b></a> </div><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"> <a href="http://www.timescolonist.com/news/Club+Shed+tears+public+sector/3840618/story.html"><b>From the same Victoria newspaper</b></a> </div><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><br />
This all ties in very well with the excellent video on the sidebar with Bill Gates talking about the current challenges to education. I urge you to watch it.</div><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"></div><br />
<div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;">Bill Tufts </div><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><b>Fair Pensions For All </b></div><br />
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</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-9721432789285052812011-02-27T14:54:00.001-05:002011-02-27T14:56:10.422-05:00Leo's Pension Pulse<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; font-family: Georgia,"Times New Roman",serif; text-align: center;"><a href="https://lh6.googleusercontent.com/-t43TKyKzA5I/TWqqJcNC-MI/AAAAAAAAAec/HJCH7Fecdk4/s1600/Pension+Pulse.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="229" src="https://lh6.googleusercontent.com/-t43TKyKzA5I/TWqqJcNC-MI/AAAAAAAAAec/HJCH7Fecdk4/s320/Pension+Pulse.jpg" width="320" /></a></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"></div><div style="font-family: Georgia,"Times New Roman",serif;"></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">My friend over at the Pension Pulse Leo Kolivakis has run a very successful and insightful pension blog since 2008. He always has very informative insights and discussions into the pension world. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">I sent him an email yesterday that he had analyzed by the former Chief Actuary of the Canada Pension Plan (CPP), Bernard Dussault. Leo posted his response to my email. It makes for very informative and interesting dialogue.</span></div><br />
<div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Put Leo on your blog list as he does an excellent job and for the past 3 years had made a post on pensions every day, even the weekends!</span></div><h3 class="post-title entry-title" style="color: orange; font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><a href="http://pensionpulse.blogspot.com/2011/02/day-of-reckoning-on-california-pensions.html">Day of Reckoning on California Pensions?</a></span></h3><h3 class="post-title entry-title" style="color: orange; font-family: Georgia,"Times New Roman",serif;"><span style="color: black; font-size: small; font-weight: normal;">I hope you enjoy this discussion </span> </h3><h3 class="post-title entry-title" style="color: black; font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Bill Tufts </span></h3><h3 class="post-title entry-title" style="color: orange;"><span style="color: black;">Fair Pensions For All </span></h3></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-30775486897741111292011-02-26T11:08:00.001-05:002011-02-26T11:11:53.115-05:00The Pension Monster comes to Canada<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="https://lh3.googleusercontent.com/-pd779ZMIeNs/TWkJhUQIMeI/AAAAAAAAAeU/NX1eqwTdGJ8/s1600/Pension+monster.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="411" src="https://lh3.googleusercontent.com/-pd779ZMIeNs/TWkJhUQIMeI/AAAAAAAAAeU/NX1eqwTdGJ8/s640/Pension+monster.jpg" width="640" /></a></div><br />
<div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Like the great Ogopogo monster in the Okanagan Valley in BC there is a monster that everyone knows is out there but it is rarely ever seen. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Today the Pension monster surfaced in Montreal in an article from the Montreal Gazette. The article is</span><span style="font-size: small;"> </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b><a href="http://www.montrealgazette.com/business/Island+mayors+Quebec+pension+relief/4352835/story.html">Island mayors to ask Quebec for pension relief</a></b></span> </div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Montreal Island's two most senior political leaders are planning to ask the provincial government for a special law to help curtail the growing local tax burden associated with municipal pensions.</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">This is an unusual move because most politicians in Canada get a ride on the monster as well. It is a personal conflict of interest for politicians to castigate the monster because he is their friend as well, most city politicians have a pension funded by taxpayers. </span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">According to their plan, people who are currently receiving a municipal pension would not be affected. Only current and future municipal employees would see lower benefits - but not retroactively.</span></blockquote><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Current employees would keep whatever entitlements they have built up over time, based on years of service already accumulated. But changes would be made over time to reduce benefits going forward.</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">The problem with pensions they way they are designed today is that they are unsustainable and unfair to taxpayers. </span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">In Westmount, employees with 30 years of service can retire at age 50 with 75 per cent of the average of their last three years of earnings. This has encouraged a lot of early retirements in Westmount, which is why the westend suburb now has almost as many retired workers on its books (236) as full-time equivalent employees (295). Soon, Westmount will be like General Motors, with more retired than active workers.</span></blockquote><div style="background-color: transparent; border: medium none; color: black; font-family: Georgia,"Times New Roman",serif; overflow: hidden; text-align: left; text-decoration: none;"><span style="font-size: small;">Part of the problem is that pensions are based not on what the city or employees contributes but on what the employees earn when they retire. Employee compensation in Montreal has been skyrocketing like all governments at all levels across Canada. </span></div><div style="background-color: transparent; border: medium none; color: black; font-family: Georgia,"Times New Roman",serif; overflow: hidden; text-align: left; text-decoration: none;"><span style="font-size: small;"><br />
</span></div><div style="background-color: transparent; border: medium none; color: black; font-family: Georgia,"Times New Roman",serif; overflow: hidden; text-align: left; text-decoration: none;"><span style="font-size: small;"> Another article in the Gazette shows how this happened.</span><span style="font-size: small;"> <b><a href="http://www.montrealgazette.com/business/much+economies+scale/4240874/story.html">So much for economies of scale</a> </b></span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><span style="font-size: small;">The spending of the island's municipalities rose from $2.7 billion in 2002 to $4.1 billion in 2011. That's a jump of 50.1 per cent -21/2 times the inflation rate.</span></div></blockquote><blockquote style="font-family: Georgia,"Times New Roman",serif;"><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><span style="font-size: small;">Salaries have gone up by 29 per cent, well above that 20-per-cent inflation rate. How, you ask, can this be? Hasn't the Tremblay administration been holding increases to no more than two per cent a year? Yes, but that does not tell the full story. Ways exist to get around it. One is "grade inflation:" People get new titles, qualifying them for raises. Another is overtime. A third is arbitrators' rulings. Last year, for example, an arbitrator gave police a 1.5-per-cent "metropolitan premium" because their work was more difficult than that of other Quebec police.</span></div></blockquote><blockquote style="font-family: Georgia,"Times New Roman",serif;"><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><span style="font-size: small;">But benefits -mainly pensions -are growing far faster. As the table indicates, they've grown by 126 per cent since the merger. A major reason is the 2008 recession, which inflicted great losses on pension funds. Provincial law requires municipalities to compensate for these losses. Prodded by Trent, the Tremblay administration plans to appeal to Quebec to reduce municipalities' need to compensate so generously.</span></div></blockquote><blockquote style="font-family: Georgia,"Times New Roman",serif;"><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><span style="font-size: small;">But another reason for this 126-per-cent rise is that municipal pensions are far more generous than those in the private sector. Firefighters, for example, earn $65,585 after 41/2 years' service; they can retire after 30 years with 73 per cent of salary and after 41 years with -incredibly - 100 per cent. </span></div></blockquote><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><div style="background-color: transparent; border: medium none; color: black; font-family: Georgia,"Times New Roman",serif; overflow: hidden; text-align: left; text-decoration: none;"><span style="font-size: small;">There are solutions but is there political will? </span></div><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">The current practice of paying out generous defined benefit pensions is unsustainable fiscally - and unsupportable politically, Trent said. Two thirds of Canadians don't have any pension plan at work at all, he noted.</span></blockquote><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">"Why should they, through their municipal taxes, be supporting these very generous pension benefits?"</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Taming the Beast </b></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">We have all seen the monster and we know that the ride he provides for some is very comfortable, but like most monsters, for the average person he is very dangerous. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">I was recently invited</span><span style="font-size: small;"> to a conference in California about pension reform. There was a lot of discussion on how to tame the beast. One idea focused on the ability of municipalities to go bankrupt in order to off load the legacy liabilities they have. Another large part of the discussion surrounded the extent to which pension can be rolled back or more appropriately made more sustainable. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">One word of warning is that implementing new rules for future employees will not control costs for the city. The articles above mention that new employees coming into the system are not being hired as full time employees but as contractors. This trend will continue. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Because of the ponzi like nature of defined benefit pensions the need fresh contributors coming in to be sustainable. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Benefits must be amended for existing employees. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">A top labour lawyer at the conference examined the concepts that will allow for the changing of future benefits for existing employees. part of it is on vesting rights. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Vesting</b> - </span><span style="font-size: small;">Vesting means that you are unconditionally entitled to receive the pension you have earned under the pension plan, whether that benefit is payable now or sometime in the future. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Accrual</b> - refers to the level of benefits that the employee has already earned based on the number of years employees have worked. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Example </b></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Before I begin my analysis let me say that I respect the hard work of police and firefighters across our country. It is part of what makes our democracy strong.</b></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>We only need to look across the world to see what is happening in other countries to appreciate what we have here. I am only talking about effective pension management solutions, not denigrating any public sector worker. </b></span></div><div style="font-family: Georgia,"Times New Roman",serif;"></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Lets look at the firefighter above. Assume we have a firefighter who has worked 15 years. Assume he is earning $70,000 per year. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">The usual formula for pension accrual for "public safety workers" is 2.33% for every year the employees works. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Based on his current employment record he has vested his pension with 15 years of working, So based on the formula he will get 2.33% X 15 years equals 35% of his income. He has accrued 35% of his income and this is vested because he has completed this amount of time. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">The future earning he has will accrue at the same rate 2.33% and each year that he works becomes another year of "vested" service. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">What the big question in Canadian law is "Can the future accrual rate be changed?" </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">The firefighter when he first began working he had an accrual rate on his pension based at 2%. Changes over the last 10 years have boosted the accrual rate to 2.33%. When the change was made all of his past service was changed to the new accrual rate. This boosted the liability substantially for all municipalities across Canada because the change was made retroactive for all the years public safety employees had already worked. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">In this example say a firefighter had been with the city for 25 years. Under the 2% accrual rate he had a vested pension worth 50% of his salary but the day after the pension changes were made he had a pension worth 58% of his earnings. At 30 years the number was 60% versus 69.99%. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Pension earnings in Canada's public sector have always been based on a target replacement ratio of 70% of the worker's salary. So the firefighter above at 30 years working had the target pension at an accrual of 2.33% compared to the old plan where he would have had to work 35 years to get the 70% replacement pension. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Confusing I know. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Potential Solutions </b></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">In California the solution that Jeffrey Chang presented was that future accrual rates can be changed but the vesting had to stay in place<b>.</b> This seems like a reasonable solution. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Convert DB to DC</b> </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">The first solution would be to change the </span><span style="font-size: small;">nature of the plan convert it from a defined benefit (DB) to a defined contribution. It is only the public sector that has DB plans based based on these generous accrual rates. The employee would be vested to his current DB portion but any future pension would be based on a DC plan accumulating future pension contributions. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Hybrid - Multi-Tier </b></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Why should the public sector employee get a pension substantially greater than the working Canadian's average wage. Give them a base of say 50% replacement income and any additional contributions they or taxpayers make go into a DC plan. So they would be guaranteed the 50% but any portion over and above would be calculated on a DC formula. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Eliminate Final Pay Formulas </b></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">The example for the earnings of the firefighter above is understated. They used a salary estimate that is estimated on the average wage of a firefighter in Montreal. Based on the salary grid and on seniority a firefighter going into retirement has a much large salary. It is the final years that are used to calculate the pension. In the private sector it is done on a career average basis. This opens the door to much abuse in order to raise salaries in the last few working years to enhance pensions. Why use only the last 3 or 5 years of salary to base the pension? </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Cap Pensions </b></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">What is a reasonable limit for pensions? Our work shows that a formula base on the average working wage is a good solution, Why should a public sector employee retire at age 50 earning for the rest of his life substantially more than the average working taxpayer. A moving formula could be say 1.5 times the average Canadian working wage. This should be more than reasonable pension income. Earlier this week we wrote about an Ontario worker who is currently on track for a $750,000 per year pension, of course funded by taxpayers. An alternative would to be to place a dollar cap on pension for example $95,000 per year. Currently across Canada at all levels there are tens of thousands of retired government workers earning in excess of $100,000 per year in pensions. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Raise the Retirement Age </b></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Canadians in the past had a targeted retirement of age 65. A majority of workers today will work far past that age and a minority will be working into their 70's. Why should the public sector retire as young as age 50? </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><b>Eliminate Double dipping </b></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Many of those retired firefighters will continue working after they retire with no reduction in their pensions. Even more insulting many will return to government to continue working. <b><br />
</b></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">The conclusion is that changes have to be made. The longer we postpone the changes the more painful it will be for taxpayers and employees. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Taxpayers will suffer big drops in the services that government can provide as they struggle to pay employee legacy costs. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">For employees the risk is great too. Many have 40 years to go in retirement. This is a long time and there are many financial challenges that face Canada in the years ahead. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;">We need to move to pensions that are fair for all and sustainable. </span></span><br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://lh5.googleusercontent.com/-inOyM56ot30/TWkmKs_RTJI/AAAAAAAAAeY/qbkAtNseL4w/s1600/Ogopogo_timbre.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="286" src="https://lh5.googleusercontent.com/-inOyM56ot30/TWkmKs_RTJI/AAAAAAAAAeY/qbkAtNseL4w/s400/Ogopogo_timbre.jpg" width="400" /> </a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;">Bill Tufts </div><div class="separator" style="clear: both; text-align: left;"> <br />
Fair Pensions For All </div></div></div></div></div>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-7288252569905355792.post-56811076346929013222011-02-25T19:01:00.001-05:002011-02-25T19:15:24.448-05:00Weekend funnies<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-E3GRmIzdgUA/TWg7vn1hp7I/AAAAAAAAAeM/0TdPMqGmgGI/s1600/Man_Laughing_Har%2521_Har%2521_Har%2521_clipart_image.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="http://3.bp.blogspot.com/-E3GRmIzdgUA/TWg7vn1hp7I/AAAAAAAAAeM/0TdPMqGmgGI/s320/Man_Laughing_Har%2521_Har%2521_Har%2521_clipart_image.jpg" width="264" /></a></div><br />
<b>Today's headlines are so funny you have to laugh. </b><br />
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<a href="http://www.lfpress.com/news/london/2011/02/24/17400626.html">London Ontario -Police swell sunshine list by 68%</a><br />
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<a href="http://www.yourottawaregion.com/news/article/959400--paramedics-happy-with-new-contract">Paramedics in Ottawa ecstatic over a salary increase of 13 % despite wage freeze in Ontario</a><br />
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<a href="http://calgary.ctv.ca/servlet/an/local/CTVNews/20110224/CGY_budget_schools_110224/20110224/?hub=CalgaryHome">Disillusioned over 4.4% wage hike in Edmonton </a><br />
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<a href="http://www.saintcitynews.com/article/20110225/STALBERT0101/302259954/-1/stalbert0101/pay-plan-passed">St Albert - Councilors and employees approve themselves big wage increase </a><br />
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<a href="http://www.leaderpost.com/health/raises+execs/4345495/story.html">In Regina out-of-scope healthcare employees get 18.8% or $70,000 raise.</a><br />
<div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">It is ironic I had just finished writing a letter to the Leader Post. The letter pointed out the game of leapfrog being played by the executives that had just given themselves handsome raises. I wrote that </span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="color: black; font-size: small;">Despite all of the wordsmithing about </span><span style="font-size: small;">out-of-scope employees, salaries significantly "under market" and comparing it to pirates in Alberta salary increases of 20% or $70,000 per year are a taxpayer rip-off. How much did they pay consultants to get a report that justified these types of increases? <br />
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Don't expect it to end anytime soon. Consultants will soon be reporting to healthcare executives in Alberta that Saskatchewan just got raises valued at 20% and they should be getting the same. The it will be Saskatchewan's turn again. It's just a game of leapfrog that keeps putting taxpayers further and further behind. </span> </blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"> The Leader Post article stated that </span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">The health regions, the Saskatchewan Cancer Agency and SAHO worked with The Hay Group, a management consulting firm, to do the market review, which indicated that some pay ranges (bands) were no longer competitive. A broad range of out-of-scope health-care jobs include administrative positions, nursing supervisors, program directors, vice-presidents and CEOs.</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Then the next report I saw that was the cause for uncontrollable laughter. It was the report from St Albert. This is where the councilors and employee both went to the taxpayer trough. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">And how did they justify it? </span></div><div style="font-family: Georgia,"Times New Roman",serif;"></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span class="articlebodylist">Council approved a compensation review implementation plan and a compensation philosopy policy, both in reaction to a compensation report delivered by the Hay Group in November.</span></span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Be watching for the next report.... I wonder how much taxpayers have to pay for these consultant reports. For some they are priceless.</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Here is another update on a report done by the same group in Vancouver.</span><span style="font-size: small;"> </span><a href="http://www.citycaucus.com/2011/02/city-staff-survey-produces-92000-bill"><span style="font-size: small;">City staff survey produces $92,000 bill</span></a></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Rob Ford commissioned the same group to make a compensation report. Here is what the report by the same group said to the mayor of Toronto</span><span style="font-size: small;"> </span><a href="http://www.theglobeandmail.com/news/national/toronto/toronto-councillors-should-reject-raise-budget-chief-says/article1892344/"><span style="font-size: small;">Councillors should reject raise, budget chief says</span></a><br />
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<span style="font-size: small;"><b>Nothing New </b></span><br />
<span style="font-size: small;">This game is going on for a long time. My only thought is what are these guys thinking? </span><br />
<span style="font-size: small;"><br />
</span><br />
<span style="font-size: small;">Across North America government are suffering financially. Taxpayers have suffered job losses, reduced wages and a significant portion of wealth was lost in the stock markets. Yet </span><br />
<span style="font-size: small;">the cities listed in the above headlines continue on like we are still living in boom times. </span><br />
<span style="font-size: small;"> </span><br />
<span style="font-size: small;">When will they bump up against the ceiling of reality? Or maybe they believe the following article and think they can turn the ship around with more spending? </span><br />
<span style="font-size: small;"> </span><span style="font-size: small;"> </span><br />
<a href="http://news.yahoo.com/s/ap/20110225/ap_on_re_us/us_broken_budgets_economy_state_cuts"><b><span style="font-size: small;">Government budget cuts pose threat to recovery</span></b></a><br />
<br />
<a class="kLink" href="http://news.yahoo.com/s/ap/20110225/ap_on_re_us/us_broken_budgets_economy_state_cuts#" id="KonaLink0" style="border-bottom-color: rgb(54, 99, 136); border-bottom-style: dotted;" target="undefined"><span style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-size: 13px; font-weight: 400; position: static;"><span class="kLink" style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-size: 13px; font-weight: 400; position: static;">Deep </span><span class="kLink" style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-size: 13px; font-weight: 400; position: static;">spending </span><span class="kLink" style="color: rgb(54, 99, 136) ! important; font-family: arial,helvetica,clean,sans-serif; font-size: 13px; font-weight: 400; position: static;">cuts</span></span></a> by state and local governments pose a growing threat to an economy that is already grappling with high unemployment, depressed home prices and the surging cost of oil. <br />
<br />
Lawmakers at state capitols and city halls are slashing jobs and programs, arguing that some pain now is better than a lot more later. But the cuts are coming at a price — weaker growth at the national level.<br />
<br />
Across the country, governors and lawmakers are proposing broad cutbacks — lowering fees paid to nursing homes in Florida, reducing health insurance subsidies for lower-income Pennsylvanians, closing prisons in New York state and scaling back programs for elderly and disabled Californians.<br />
<br />
"The massive financial problems at the state and local levels </div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
But those same governments cut spending at a 2.4 percent rate at the end of last year. And economists predict they will slash their budgets by up to 2.5 percent this year — potentially the sharpest reduction since 1943. The deepest cuts are expected to occur in the first six months of this year.<br />
<br />
The worst cuts so far_ 3.8 percent — came in the January-to-March period of 2010. That was the sharpest quarterly drop since late 1983, when the U.S. economy was recovering from a severe recession. Most economists think the cutbacks this year will exert an even bigger economic drag than last year.<br />
<br />
Many governors, including those in Florida, New York and Colorado, are pursuing tighter budgets. Their proposals include laying off public workers and teachers, reducing spending for education and health care, and ending some social services. They're also targeting public pension funds and health insurance plans and seeking larger contributions from public employees.<br />
<br />
State and local budget experts fear the cutbacks will intensify this year. States are struggling to close budget gaps of about $125 billion for the upcoming budget year, according to the Center on Budget and Policy Priorities.<br />
<br />
State and local governments have cut more than 400,000 jobs in the past two years. Budget pressures will force an average of 20,000 more job cuts each month for the rest of this year <br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"> </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"> </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"> </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Bill Tufts </span></div><span style="font-family: Georgia,"Times New Roman",serif; font-size: small;">Fair Pensions For All </span></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-69015986190833071522011-02-23T09:03:00.004-05:002011-02-23T10:57:22.743-05:00Ontario Hydro - Abusing Taxpayers<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-BDNLIhhvc3Q/TWUTbZTT2hI/AAAAAAAAAeI/r5uSJEz1Xd8/s1600/Hydro.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="266" src="http://1.bp.blogspot.com/-BDNLIhhvc3Q/TWUTbZTT2hI/AAAAAAAAAeI/r5uSJEz1Xd8/s400/Hydro.jpg" width="400" /></a></div><br />
It looks like electric rates are rising again in Ontairo. The <a href="http://www.ottawacitizen.com/news/McGuinty+chided+over+hydro+increases/4329731/story.html">OPG wants an increase</a> of over 6%. They made the 6% look like a bargain as they originally were asking for a 9.6 per cent rate increase. Don't be deceived about it being over green energy or a $18 Million fine they had to pay.<br />
<br />
It is about the machine feeding itself. The rate increases are due to outrageous compensation packages paid by OPG. My recent blog on <a href="http://fairpensionsforall.blogspot.com/2011/02/ontario-hydro-big-shock-for-taxpayers.html">Hydro Ontario</a> showed how most of the cost of running the organization was associated with the huge labour costs. <br />
<br />
Well there is a sister to Ontario Hydro called OPG. It employs about 12,000 across Ontario. Over half of these employees or about 7,900 showed up on the Sunshine List for 2009. This is the list of earners on the government dole making in excess of $100,000 per year. <br />
<br />
The Sunshine List only shows the salaries of these employees. It does not include the total compensation they receive in pensions and benefits. For most of these employees the taxpayers of Ontario will kick in another 35% towards these fringe items. So that a employee that shows up with $100,000 on the Sunshine List is costing the taxpayer around $135,000,<br />
<br />
Assuming that the employees on the Sunshine List earned just $100,000. their total compensation cost you as a taxpayer over $1 Billion. Of course there are all those employees not on the list probably earning close to $100,000 and many on the list far exceed the $100,000 threshold.<br />
<br />
<b>Obscene Compensation </b><br />
The number of employees on the Sunshine List from OPG is an insult and affront to Ontario taxpayers. But they are just small fish compared to the big Kahunas. (Joe M keep me posted on this),<br />
<br />
A 2009 compensation report from OPG shows the real damage to taxpayers of the irresponsible use of taxpayer money to fund the personal pension plans of those running the organization. <br />
<br />
Although the numbers seem to be fraudulent and put out as some sort of a joke, I think they are real. That makes them even more horrifying. We can see why <a href="http://www.thestar.com/news/gta/article/818883--ex-hydro-one-head-fights-to-increase-25-000-monthly-pension">Clitheroe</a> wanted to sue taxpayers over her paltry $350,000 a year pension.<br />
<a href="http://www.opg.com/investor/pdf/2009_ExecComp.pdf">Statement of Executive Compensation - OPG </a><br />
<br />
The first portion of the report on page 7 shows the pension and compensation values of the senior executives. A new President and CEO was awarded a 3 year agreement beginning in 2009. That is all the time he will need to become faboulously wealthy and get onto the next government appointed job.<br />
<br />
His total compensation was $1.591 Million in 2009. It only shows as $1.011 Million on the <a href="http://www.fin.gov.on.ca/en/publications/salarydisclosure/2010/electric10.html">Sunshine List </a>for the same year. This compensation appears to be only for half the year as the outgoing CEO and President made $1.717 Million the same year as well and $3.451 Million the previous year. Of course the outgoing President only shows earnings of $2.475 Million on the Sunshine List the same year he made the $3.451 million.<br />
<br />
<b>Thats not all </b><br />
There is lots more pain to come for taxpayers. The employees working for OPG have a long list of special benefits they are paid. None of these benefits are paid to the private sector but are part of the public sector collective agreements. They include a laundry list of goodies such as retiree health care plans (for those who retire before 60, they still get benefits), sick time payouts, vacation leave payouts and termination severances.<br />
<br />
The total liability on these benefits is close to $2 Billion. See page 125 of the <a href="http://www.opg.com/pdf/Annual%20Reports/Annual%20Report%202009.pdf">OPG Annual Report </a><br />
<br />
In 2009 the company contributed $ 271 million into the company pension plan. Since the wages are so low at OPG employees only contributed $ 86 Million into the plan.Most companies in the private sector split the cost of pensions with their workers. At OPG employees contribute only 24% into their gold-plated plans. <br />
<br />
Oh by the way. This is not enough money for the pension fund. They are figuring these rates at 7% rate of return for the pension fund. Any guesses who will be covering future shortfalls? <br />
<br />
OPEB's or Other Post employment Benefits are escalating at OPG. They are a debt paid to employees who no longer work there but participate in the other benefits. Can you imagine your employer saying here is your gold watch but we are going to pay for your health benefits for the next 10 or 15 years? As you leave we will pay you for 20 years worth of sick days you did not take. We know it is hard to take 10 sick days a year.<br />
<br />
<b>More to Come </b><br />
If you are not feeling ill already go to page 8 look at the value of the pensions for the executive. The NEW CEO is "entitled" to $750,000 year or $62,500 per month at age 65. Of course, this amount will increase every year and probably by the end of his contract will be close to $1 Million. That is $1 Million a year in pensions payments for retiring. <br />
<br />
One executive member has already accumulated in excess of $4 Million in pension entitlements. One would think that someone earning $750,000 a year could save for their own retirement. How do you spend all that money? You would not have to save any of it for retirement, that has already been taken care of by taxpayers. <br />
<br />
This is the real reason Clitheroe tried to sue Ontario taxpayers for a $33,000 per month pension. She had pension envy. <br />
<br />
Bill Tufts<br />
Fair Pensions For All </div>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-7288252569905355792.post-84162602641516112022011-02-19T11:08:00.002-05:002011-02-19T11:45:53.457-05:00"Boot Camp" Examines Pension Cloud over Government Budgets<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; font-family: Georgia,"Times New Roman",serif; text-align: center;"><span style="font-size: small;"><a href="http://4.bp.blogspot.com/-gBbfHj1zNXU/TV_pgBT0eBI/AAAAAAAAAeE/QGPFfyxO4AE/s1600/hokusai_kanagawa.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="215" src="http://4.bp.blogspot.com/-gBbfHj1zNXU/TV_pgBT0eBI/AAAAAAAAAeE/QGPFfyxO4AE/s320/hokusai_kanagawa.jpg" width="320" /></a></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Over the past week I was in California. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">It was chance to get away and do some work writing for the upcoming book I am writing with Lee Fairbanks called Pension Plunder.</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">I was invited to the Bootcamp by Jack Dean the publisher of <a href="http://www.pensiontsunami.com/">Pension Tsunami.</a></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Jack works with <a href="http://californiapensionreform.com/">California Pension Reform CFR</a> and they were the hosts for the event. </span><span style="font-size: small;">California provided a nice break from winter and the Bootcamp provided me with a good reason for a get-away</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">I had a chance to share lunch with Marcia Fritz the founder of California Foundation for Fiscal Responsibility and<i> </i><span style="color: black;"><a href="http://www.ocregister.com/articles/county-288931-pension-employees.html">Scott Baugh </a>Former Republican Leader, California Assembly. It was a very interesting day and provided lots of insight into issues that elected officials and city managers have in dealing with the aging time bomb. </span></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span style="color: black;">The seminar was a sell out and there were an additional 350 people listening to the program live over the internet. </span></span><span style="font-size: small;"><span style="color: black;">There were a wide range of people in attendance from self proclaimed unions thugs to elected city councilors, mayors and taxpayer groups. At lunch we were joined by the City Manager and an elected official from Loma Hills California. </span></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span style="color: black;">The event was presented to better help key decision makers better understand the pension tsunami and hear about timebombs set to go off for municipalities around California. The biggest surprise were the costs of OPEB's (Other Post Employment Benefits). </span></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span style="color: black;">Although the focus of the event was California all governments at all levels have identical problems when it comes to the issue of employee entitlement packages. A lot of discussion was had around the changes that have to be implemented in order for the system to survive. </span></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span style="color: black;">Marcia told me the biggest challenge of the issue is understanding exactly what the problem is and making people aware. There is a lot of myth and misinformation out there about the problems that exist and the Bootcamp was a great way to start to begin the discussion on what needs to be done. </span></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span style="color: black;">The feature speaker was Girard Miller and he had some very interesting perspectives. His presentation was called </span><a href="http://www.governing.com/columns/public-money/power-no-spending-pledge.html">The Power of No</a></span><span style="font-size: small;">. He has written many articles and papers about pensions and the key issues surrounding reform.<a href="http://www.governing.com/columns/public-money/Poor-Pension-Math.html"> Poor Pension Math</a> </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span style="color: black;">I hope that in future blogs I will be able to share some of the details of the information that we heard. There was a wide range of experts and they focused on those issues that can make a big impact for taxpayers and their employees. </span></span></div><span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: Georgia,"Times New Roman",serif;"><span style="color: black;"></span></span></span></span><br />
<h2 class="title" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><a href="http://foxandhoundsdaily.com/blog/joel-fox/8645-boot-camp-examines-pension-cloud-over-government-budgets">"Boot Camp" Examines Pension Cloud over Government Budgets</a></span></h2><h2 class="title" style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"> </span><a href="http://www.myfoxla.com/dpp/money/lawmakers-head-to-pension-boot-camp-20110217"><span style="font-size: small;">Lawmakers Head to Pension Boot Camp</span></a></h2><span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: Georgia,"Times New Roman",serif;"><span style="color: black;"></span></span></span></span><br />
<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: Georgia,"Times New Roman",serif;"><span style="color: black;">Bill Tufts </span></span></span></span><br />
<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: Georgia,"Times New Roman",serif;"><span style="color: black;">Fair Pensions For All </span></span></span></span></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-60013576563595190652011-02-11T11:14:00.001-05:002011-02-11T11:15:28.512-05:00Ontario Hydro a big shock for taxpayers<div dir="ltr" style="text-align: left;" trbidi="on"><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-lRoilQfhIu0/TVVgL0I_rqI/AAAAAAAAAeA/xE0CaTr9b0s/s1600/Design.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="228" src="http://4.bp.blogspot.com/-lRoilQfhIu0/TVVgL0I_rqI/AAAAAAAAAeA/xE0CaTr9b0s/s320/Design.jpg" width="320" /></a></div><br />
<br />
<span style="color: black; font-size: small;"><span style="font-family: georgia,serif;">Ontario Hydro releases 2010 results. <br />
<a href="http://www.newswire.ca/en/releases/archive/February2011/10/c9885.html" target="_blank">http://www.newswire.ca/en/<wbr></wbr>releases/archive/February2011/<wbr></wbr>10/c9885.html</a></span></span><br />
<span style="color: black;"><span style="font-size: x-small;"><span style="font-family: georgia,serif;"><br />
</span></span></span>Every year taxpayers in Ontario are made aware of how Ontario Hydro is being used by its employees as their personal piggy bank. <br />
<br />
Politicians and management refuse to stand up to the Hydro employee unions and in fact have promised to guarantee their gold-plated benefits and well into the future. The government makes the promises and you will be paying for them <br />
<br />
The top earners from the Sunshine List every year are usually from Hydro. Last year the head of Ontario Hydro was third on the list at $977,000 and the head of Ontario Power Generation came in first making more than $2.2 million. <br />
<br />
In addition to the top dogs Hydro over 2,000 employees make it to the list that reports on employees earning over $100,000 per year. This number is only the base salary paid. <br />
<br />
Salaries are only part of the story. Employees at Hydro also earn gold-plated pensions and platinum benefits. Benefits and pensions contributions are worth about an extra 35%. <br />
<br />
Ontario Hydro just reported their 2010 results and the trend to skyrocketing pension and benefits costs continues. This year Hydro paid almost half a billion dollars for these benefits. <br />
<br />
This year the company paid combined pension and benefits expenses of $ 453 million. Costs were $191 million for pensions and $262 for benefits. <br />
<br />
Pensions costs have skyrocketed from $86 million in 2006 to $191 million this year. This is a 122% increase. <br />
<br />
In most companies the employees are responsible for a portion of their retirement costs. In the private sector a 50/50 contributions is standard practice. At Hydro however, the employees contribute only 15% of the cost of the gold-plated pensions. Over the past 5 years the company has contributed $585 million into the pension plan and employees made a paltry $99 million contribution. <br />
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Employees are entitled to pensions unheard of in private sector. They are entitled to 70% of their average terminating salary. Employees hired before 2005 get a pension based on their top 3 years of salary. Newer employees are entitled to a 5 year average plan. <br />
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A recent piece of taxpayer paid propaganda was mailed to Ontario households with a warning from McGuinty that hydro rates will rise for many years to come in Ontario. Now we know why. <br />
<br />
The story only gets better. Ontario Hydro does not have to pay all of its costs incurred in a single year. There is a category called Future Employee benefits or OPEB's, Other Post Employee Benefits. These are benefits accrued this year but to be paid in future years. It is a loan to employees for future goodies. The liability of OPEB's at Hydro is now just short of one billion dollars. The actual total this year is $980 million up from $716 million in 2005. An increase in liability of 36% since 2005. <br />
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OPEB's mean that Ontario taxpayers in addition to paying gold-plated pensions pay for more benefits at the time of retirement or after they retire. <br />
<br />
Some of the OPEB's include the employee termination packages such as vacation time payout and vacation time payouts. A bonus to be received for terminating employment. Also most will retire around age 55 they are entitled to full health benefits until age 65. <br />
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The total of goodies paid to employees plus the loans you have made to them have added up to $2.9 Billion over the past 5 years. Hydro has returned to taxpayers a profit of $ 2.4 Billion. <br />
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Please don't be fooled by election bribes in the form of energy tax credits from the provincial government. For Ontario taxpayers Ontario Hydro continues to be a shocking experience. <br />
<br />
<span style="color: #888888;"><span style="color: #888888;"> </span></span><br />
Bill Tufts<br />
Fair Pensions For All <br />
<span style="color: #888888;"><span style="color: #888888;"> </span></span></div>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-7288252569905355792.post-15178669386047556162011-02-04T11:33:00.002-05:002011-02-11T13:09:50.435-05:00Great Canadian Pension Reform Debate and PRPPs<div dir="ltr" style="text-align: left;" trbidi="on">In a recent edition of the Daily Reckoning the author Bill Bonner had this to say about fairness. <br />
<blockquote>And here's another important point. Since more wealth is only interesting from a RELATIVE point of view...that is, it is only useful when it gives you higher status...a normal, healthy human being cares more about "fairness" than he does about absolute wealth. Of course, fairness can mean practically anything you want it to mean. It can mean fairness of opportunity - as in, we all play by the same rules. Or it can mean fairness of outcome - as in, we all end up in the same place. <br />
<br />
In an up and coming economy, with limited government and low taxes - like the US in the early part of the last century - people care more about fairness of opportunity. People are making money. They're creating status for themselves. Things change fast. You are responsible for creating your own wealth, power and status.<br />
<br />
Later, as the economy matures, fairness of outcome becomes more important. New wealth is harder to get. It's harder to move "up" in society. People get a hold of the government and turn it into a zombie- protector. They use it to make sure the rich get richer and the poor stay poor. </blockquote>The banking and investment community is currently in the process of positioning themselves for the PPRP. Terence Corcoran commented on pensions in his article entitled <a href="http://www.leaderpost.com/story_print.html?id=4200094&sponsor=">The Great Pension Myth.</a><br />
<blockquote>If you missed the news and don't have a clue about what these new PRPPs might be, don't worry. I'm not sure the ministers even know what they are. There's certainly no possibility of PRPPs coming into existence any time soon. The politicians issued a brief description of what pooled pensions might look like, then they "tasked federal, provincial and territorial officials to work collaboratively to examine, among other things, changes that would be required to permit defined contribution Pooled Registered Pension Plans across Canada."</blockquote><blockquote>While experts have been on the pension-reform case since the stock-market crashes of the last decade undid their pension models, the issues -- technical, ideological, economic, tax, political, jurisdictional and regulatory -- are numerous and complicated. They don't lend themselves to easy solutions, unless you're a union leader and can parade mythologies as reasonable options. All we need, they say, is a massive expansion of the Canada Pension Plan to give all Canadians generous pensions.</blockquote><blockquote>The core mythology of pensions is the all-too widely accepted idea that it is possible and even easy for individuals to get more out of their savings and investments beyond a reasonable but modest rate of return. That's the great pension fantasy, an extravagant promise that somehow there is free money to be had.</blockquote><blockquote>There are, essentially, only three sources for this free money. 1) New funds can be voluntarily contributed by corporations and employers offering pensions as an employment perk, adding to the total savings returned to the individual. 2) New money can be taxed from others and transferred between generations or income groups to provide higher returns to one set of individuals at the expense of others -- a form of wealth redistribution. 3) Expert investment advisors and managers can achieve dramatically superior investment returns that will reward each individual with larger retirement savings and payments than they could achieve on their own.</blockquote><blockquote>There are no other possible sources of bonus pension benefits beyond what the individual contributes. One of those sources, moreover, has proven to be mythical. The stock markets have turned out to be unreliable over the long term, and expert managers rarely emerge as superior performers. It is also logically impossible for all pension managers to beat the market.</blockquote><blockquote>The Great Canadian Pension Reform Debate is essentially an attempt to come up with a new way to keep the fantasy alive. However complicated the issues, Canadians should know this basic fact: There is no free pension payoff and any extra returns and bonus payouts will have to come from somewhere.</blockquote>In an excellent piece the Alberta Venture magazine produced a thoughtful analysis of the current pension situation in Canada.<a href="http://albertaventure.com/2011/02/second-life/">Second Life</a><br />
<blockquote>Things aren’t much better when it comes to employer pension plans, given the fact that Albertans have the dubious distinction of having the lowest corporate participation rates in Canada. Nationally, approximately 40 per cent of employees belong to a registered pension plan (RPP) offered through the workplace. In Alberta, though, that figure drops to 33 per cent, and if you take out the RPPs in the public sector the total shrinks further to just 18.3 per cent. Mintz thinks that’s a reflection of Alberta’s low union rates relative to other provinces, and the Alberta Federation of Labour agrees. As its 2009 policy paper, The Looming Crisis in Retirement Incomes, states: “It’s simply a fact that workplace pensions are rapidly becoming a thing of the past in non-union companies, and unless the rate of unionization rises, we can expect further declines in pension coverage.”</blockquote><blockquote>As a result, the next generation of Albertan retirees are even less prepared than other Canadians for their so-called golden years. Pension analysts caution that Canadians on average are currently on track to replace only half of their pre-retirement income, when 60 to 70 per cent is the generally recommended guideline for comfort. But Alberta’s “replacement ratio” is only 45 per cent, which again is the country’s lowest. In fact, according to a University of Waterloo retirement study funded by the Canadian Institute of Actuaries, two-thirds of private-sector workers currently earning between $30,000 and $100,000 won’t have enough retirement income to cover basic living expenses. Canada still has the lowest poverty rate among seniors in the world, but how much longer will that last?<br />
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Governments around the world are particularly worried about the state of the first pillar, government-funded pensions and programs, which will be under even greater pressure in the years to come as the massive baby boomer demographic becomes a senior citizen explosion. Under such a scenario, the sheer volume of new retirees drawing on entitlement programs would threaten to deplete reserves that a comparatively smaller workforce won’t be able to replace in time for their own retirement. Germany and Australia have already reacted to this potential crisis by raising the eligible retirement age from 65 to 67, while the United States and Great Britain are quietly shifting theirs to 67 and 68 respectively. Here in Canada, calls for an increase to CPP premiums have come from labour leaders and the political left, but in December of 2010 Finance Minister Jim Flaherty announced that the Canadian government would go in a different direction. Rather than making significant changes to the CPP, the government instead decided that it will create a new pension instrument called the Pooled Registered Pension Plan, a voluntary program that will be administered by the financial industry.</blockquote><blockquote>While the shakiness of the first pillar is grabbing headlines worldwide, the second and third pillars aren’t in much better shape. When Nortel declared bankruptcy and refused to honour its pension obligations, retirees discovered that the once ironclad reward of a corporate pension for years of dedicated service may be no more than a hollow and unenforceable promise. Others watched their retirement funds evaporate as RRSP savings lost up to 30 per cent of their value during the recent economic downturn and related stock market collapse. And as more soon-to-be retirees approach their golden years without having paid off their mortgages, even the idea of cashing in by downsizing one’s home is becoming a dubious option.<br />
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Beginning in the late 1990s, businesses began to shift the burden of providing for retirement from their shoulders and back onto those of their workers. The gold-plated defined benefit pension plans of the past are fast becoming an endangered species in corporate Alberta, rarely seen outside the safe confines of unionized and public-sector workplaces. </blockquote><blockquote>The defined benefit plan guarantees a worker a set income for life after retirement, one that’s usually indexed for inflation. The precise amount is determined by an employee’s cumulative contributions from years of service and the total wages that they earned during that time. If that sounds a bit like CPP, it’s no coincidence. The CPP is a classic example of a defined benefit plan, although one that’s maintained by the government rather than a corporation.</blockquote><blockquote><b>For businesses, the defined benefit system </b>system worked well in an era when employees tended to stay with one company for the bulk of their career. It also reflected the spirit of the time, one in which corporations took on a paternalistic role in their relationship with employees in exchange for their loyalty. Not surprisingly, corporations were more adept at reading the writing on the wall about the looming pension crisis than governments were, and they acted accordingly. Several decades ago they realized that saddling themselves with predetermined payments to an ever-increasing pool of former employees, who also happened to be living longer, was no longer financially sustainable.<br />
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<b>If the plus-45 set is mourning</b> the passing of the defined benefit pension plans that their parents enjoyed, there’s a younger generation of workers who may not even know what they’re missing. Kristin Smith, a pension lawyer with Spectrum HR Law LLP in Calgary, feels the up-and-coming generation of employees have moved past the direct benefit versus direct contribution debate. “Most have never had a direct benefit plan so it’s not an issue. For them it’s something from the past that their parents had.”<img align="left" alt="" height="299" src="http://albertaventure.com/wp-content/uploads/2011/02/security.jpg" style="padding-right: 9px;" title="security" width="250" /></blockquote><br />
<blockquote>Something else their parents didn’t have is responsibility for managing their own portfolios. “Employees must become more engaged in their retirement future,” Smith says. “But are they prepared to do so? Some do better than others, but employees who invest conservatively in low-risk default options like money markets or GICs may find they aren’t earning enough to pay for their retirement.” The issue of financial literacy comes up over and over again at conferences, she says, but it’s yet to be adequately addressed. Making matters more complicated is the fact that companies are legally prohibited from providing direct advice for group RSP or direct contribution plans. But, Smith says, they can help with financial education by bringing in outside advisors and providing the best information available in order to encourage employees to make good choices.</blockquote>This leads us to the current plan on the table the Pooled Pension Retirement Plan. A good overview of what is currently know about the PPRP was released on a blog by <b>http://calgary-accounting.com</b> - <span style="font-size: small;"><a href="http://calgary-accounting.com/2011/01/28/what-is-the-framework-for-pooled-registered-pension-plans/" rel="bookmark" title="Permanent Link to What is the framework for Pooled Registered Pension Plans?">What is the framework for Pooled Registered Pension Plans?</a></span><br />
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<span style="font-size: small;">So far the plan is well thought out and building on previous work done on retirement savings plans. On of the key foundations that can be seen in the PPRP design is the work of CAPSA. This work was initiated to deal with the decline of defined benefits pension plan. It set out the guidelines that employers needed to adhere to to properly manage defined contribution savings plans in the workforce. </span><br />
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<span style="font-size: small;">Bill Tufts </span><br />
<span style="font-size: small;">Fair Pensions For All</span><br />
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<span style="font-size: small;">Recently </span><span style="font-size: small;">Arnold Schwarzenegger spoke at the Montreal Board of Trade. An article about his event was posted in the Montreal Gazette<a href="http://www.montrealgazette.com/business/little+unique/4182549/story.html"> I am a little bit unique. </a>In his first comments he spoke about the pension issue. </span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">In California, public pension underfunding was pegged at about $50 billion, but analysis by university researchers revealed it was $500 billion, he said. </span><br />
<span style="font-size: small;">"Now the federal government is for the first time looking into what is the liability (for) each state. This will be a disaster in the future when it all comes out," he told a Board of Trade of Metropolitan Montreal luncheon. </span><br />
<span style="font-size: small;">"Right now they know about it and they should do something about it and they haven't done anything about it."</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">By now everyone recognizes that there is a pension tsunami coming. We are still not aware of the true extent of the damage it will cause and a lot more investigative work needs to be done to disclose the real numbers. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">In anticipation of the seriousness of the tsunami some policy makers are attempting to bring about changes that will deal with the crisis. One of these is a recent proposal to allow American state to go bankrupt. The proposal was outlined in an article from the Los Angeles Times and was written by Jeb Bush, past Governor of Florida and Newt Gingrich, a Presidential hopeful. In </span><span style="font-size: small;"><a href="http://www.latimes.com/news/opinion/commentary/la-oe-gingrich-bankruptcy-20110127,0,4958969.story">Better off bankrupt</a> they highlight their proposal. </span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">During the 2008 financial crisis, the federal government reacted in a frantic, ad hoc fashion, tapping taxpayers for bailouts galore, running roughshod over the rights of bondholders and catching the American people unaware and unprepared. In contrast, we still have time to prepare for the looming crisis threatening to engulf California, Illinois, New York and other state governments.<br />
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The new Congress has the opportunity to prepare a fair, orderly, predictable and lawful approach to help struggling state governments address their financial challenges without resorting to wasteful bailouts. This approach begins with a new chapter in the federal Bankruptcy Code that provides for voluntary bankruptcy by states, a proven option already available to all cities and towns across America.</span></blockquote><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">The figures for next year's budgets are staggering. California, which faces a $25.4-billion budget shortfall, will pay $100,000+ pensions to more than 12,000 state and municipal retirees this year. A Stanford study puts the state's unfunded pension obligations at more than half a trillion dollars. Illinois has a $15-billion budget deficit, prompting its governor and lame-duck Legislature to hike its personal income tax rate by 66%. New York, where 73% of the government workforce is unionized, is staring at a $10-billion deficit.</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">One of the key issues they try to address is: </span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Second, as with municipal bankruptcy, a new bankruptcy law would allow states in default or in danger of default to reorganize their finances free from their union contractual obligations. In such a reorganization, a state could propose to terminate some, all or none of its government employee union contracts and establish new compensation rates, work rules, etc. The new law could also allow states an opportunity to reform their bloated, broken and underfunded pension systems for current and future workers. The lucrative pay and benefits packages that government employee unions have received from obliging politicians over the years are perhaps the most significant hurdles for many states trying to restore fiscal health.</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Recently Paul Helyer was quoted in the Winnipeg Press regarding his retrospective look at the Canada Pension Plan. The article was called <a href="http://www.winnipegfreepress.com/opinion/westview/best-pension-plan-we-never-got-114783749.html">Best pension plan we never got</a></span><span style="font-size: small;"> </span></div><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">When the original plan was presented to the Pearson cabinet in the spring of 1963, I considered it unimaginative because it addressed solely the amount of retirement income, and then only in part.</span><br />
<span style="font-size: small;">It ignored other critically important areas such as portability (from job to job), early vesting rights in private plans, the gross inequities between citizens and the economic impact of another pay-as-you-go program that would be paid from current taxes.</span></blockquote><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">I considered the proposal thoughtfully and came to the conclusion that I couldn't support another unfunded plan in addition to the old age pension. It was too much at odds with the long-term interests of the baby boom generation, which would have to pay the taxes for both.</span></blockquote><blockquote style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">I decided to oppose the proposal to the best of my ability and, when I lost, as seemed inevitable, resign.</span><br />
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<span style="font-size: small;">The alternative was universal, funded, totally portable, fully vested from Day 1, equitable, and adequate to meet the needs of all retirees. In effect, from the day a student got his or her first paycheque from McDonald's, deductions from both employer and employee would be made and deposited to the latter's retirement account.</span><br />
<span style="font-size: small;">The system would apply universally to both part-time and full-time employees in all income brackets, and be merged with all existing plans with grandfathered benefits so no one would be worse off as a result of the transition. The self-employed would be included.</span><br />
<span style="font-size: small;">Funds would be administered by 10 or 12 large Canadian financial institutions that would have included the big banks and insurance companies as well as major trust companies (before the banks were allowed to buy or merge with the trusts in order to eliminate competition).</span><br />
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<span style="font-size: small;">The CPP plan did not enjoy the swift and easy passage its sponsors had hoped for. Provincial acquiescence was far from automatic.</span><br />
<span style="font-size: small;">In fact, Quebec decided it would prefer a funded plan of its own so the CPP could no longer be touted as a national plan.</span><br />
<span style="font-size: small;">Federal scouts were sent to Quebec and they came back recommending that Ottawa adopt the Quebec plan, that was partially funded, if only to make it look national in scope.</span><br />
<span style="font-size: small;">When this was agreed, the PM said the compromise was sufficient that I should stick with the ship, which I did.</span><br />
<span style="font-size: small;">When I review the file on the CPP, however, I shake my head in dismay. Every problem that could arise, did. The plan was badly underfunded so deductions had to be raised; political interference in management of the funds has been a source of constant irritation to those who seek objectivity in these matters; and, worst of all, there is no pretense of equity that was presumably the rationale for the CPP in the beginning.</span><br />
<span style="font-size: small;">So here we are, almost a half-century later, back at square one. Based on a proven record of being unable to learn from our mistakes, one can assume the policies and politics of expediency will prevail once again. Pity!</span></blockquote><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Our system of entitlements and pensions in Canada is based on the concept of an ever growing economy. Its like a giant ponzi scheme. The new people coming in work harder and increase productivity to create more wealth. Not only enough wealth for there current needs but enough to carry the wave of retirees before them. Those who are now on pensions and need healthcare. </span><br />
<span style="font-size: small;">It's the demographics stupid (Clinton). </span><br />
<span style="font-size: small;">For the past 15 years that I have been in the financial services industry we have been selling all of the features of an economy growing under the tsunami of baby boomers. We all know the story starting with diapers and going through to mutual funds. Everything the boomers needed exploded. </span><br />
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<span style="font-size: small;">Now we want to sell a different story that demographics are not important any more. We won't end up like Japan. Pensions are sustainable. Let's not be so sure. </span><br />
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<span style="font-size: small;">At the recent CFA (Chartered Financial Analyst) conference in Edmonton, one CFA noted the future may be anything but friendly. <a href="http://www.edmontonjournal.com/business/Looking+ahead+modest+recovery+Armageddon/4182982/story.html">Looking ahead to modest recovery -- or to Armageddon</a></span><br />
<div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><blockquote><span style="font-size: small;">The scariest of the forecasters was Richard Worzel, billed as Canada's leading futurist, who said "forecasting one year is crazy," and opted to dwell on what the next decade holds. He says in the next 10 years the TSX will decline 70 per cent, the S&P500 some 75 per cent, the Canadian 30-year bond yield falls to 1.25 per cent, the Canadian dollar to 80 cents US, gold will soar to $2,375 US an ounce, and oil will dive to $47 US a barrel. In other words, the future is anything but friendly.</span></blockquote><blockquote><span style="font-size: small;">"Over the next 10 years we will see slowing labour-force growth, which means lower GDP (gross domestic product) growth; steadily rising oil prices and other forms of inflation, which will further slow economic growth; steadily rising numbers of natural disasters disrupting economic activity; and a financial debacle that will make the crash of 2008 look like a Sunday school picnic."</span></blockquote><blockquote><span style="font-size: small;">Worzel said that with three-quarters of the Earth's surface covered in water, and virtually all our discovered oil on or very close to land, we're not running out of oil, merely of cheap oil.</span></blockquote><blockquote><span style="font-size: small;">One hope for salvation is that "over the next 10 years we are going to see a 1,000-times increase in the power of computers, and that allows the potential for dramatic increases in productivity." </span><br />
<span style="font-size: small;">And otherwise?</span></blockquote><blockquote><span style="font-size: small;">"There's a highly predictable financial disaster coming towards us due to our own bad habits, bad planning and bad behaviour," he said.</span></blockquote><blockquote><span style="font-size: small;">"The U.S. deficit is higher than anytime -- other than when it's been at wartime -- in the last century. And it's happening at the worst possible time in history because of the aging of the biggest generation in history, the baby boomers." </span><br />
<span style="font-size: small;">He said pension and health-care liabilities will spread well beyond Europe.</span></blockquote><blockquote><span style="font-size: small;">"America will suddenly look like Greece, with civil servants picketing in the streets and demanding that their benefits not be cut, while sitting governments have no choice but to do so. The same demographic problems and same over-promises made to civil servants and same financial pressures in retirement and health-care benefits will bedevil all developed countries, including Canada.</span></blockquote><blockquote><span style="font-size: small;">"The Canada Pension Plan is actually in very good shape because of the reforms made in 1996, but health care is a huge liability in Canada."</span></blockquote><blockquote><span style="font-size: small;">The motto for investors, like the Boy Scouts, is "be prepared." </span><br />
<span style="font-size: small;">"Conduct yourself as if it were business as usual now," Worzel said. "But have a Plan B in your back pocket for when the world goes to hell in a handcart. </span><br />
<span style="font-size: small;">"And when that day comes, head for the exits without looking back, because it's going to be bad."</span></blockquote></div><div style="background-color: transparent; border: medium none; color: black; overflow: hidden; text-align: left; text-decoration: none;"><span style="font-size: small;">T</span><span style="font-size: small;">he train wreck is coming, how bad will it be and how can we best mitigate the damage? </span></div></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Bill Tufts </span></div><span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;">Fair Pensions For All </span></span></div>Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-7288252569905355792.post-25505283843710460992011-01-26T08:58:00.007-05:002011-01-26T20:34:03.604-05:00The Alabama State Pension System on Way to Collapse<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: center;"><br />
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<div style="text-align: center;"></div><div style="text-align: left;"><h1 style="text-align: center;"><span style="font-size: large;">Are Union Pensions Bankrupting America?</span></h1><h1 style="text-align: center;"><script src="http://video.foxnews.com/v/embed.js?id=4510733&w=466&h=263" type="text/javascript">
</script><noscript>Watch the latest video at &amp;amp;amp;amp;amp;lt;a href="http://video.foxnews.com"&amp;amp;amp;amp;amp;gt;video.foxnews.com&amp;amp;amp;amp;amp;lt;/a&amp;amp;amp;amp;amp;gt;</noscript> </h1><h1> </h1></div><div style="text-align: left;"><b>Read the transcript here. <a href="http://nation.foxnews.com/unions/2011/01/26/are-union-pensions-bankrupting-america">Show transcript </a></b><br />
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</div><div style="text-align: left;">Bill Tufts </div><div style="text-align: left;">Fair Pensions For All </div></div></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7288252569905355792.post-38338896213745077632011-01-23T20:20:00.004-05:002011-01-25T16:33:17.995-05:00Unions are Pissed!!!<div dir="ltr" style="text-align: left;" trbidi="on"><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
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</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">NUPGE and OPSEU are mounting a campaign in opposition to the Ontario corporate tax cut program. Is there any disclosure on these unions? How much are they spending every year? Where are they getting their money? How much are the senior executives in the unions being paid? </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Unions are a huge lobby group in Canada. They siphon money paid by taxpayers into the civil service. Why is there no disclosure required for public sector unions? </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><br />
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<span style="font-size: small;">Check out their parody site here. <a href="http://www.peopleforcorporatetaxcuts.ca/our_cause/">People For Tax Cuts </a></span><br />
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</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Unions are worried about any money that may not be available to pay their outrageous wages, benefits and pension demands. Of course they are saying that it will come out of the pockets of Ontario taxpayers. what they are really worried about is that it will come out of future wages increases and gold-plated pension contributions. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">I have to admit that they have a point if the big-cats in the corporate sector are getting a big tax cut. But they miss the point that it is the business sector generating economic activity that feeds us all. </span></div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
</div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><a href="http://www.nupge.ca/content/3963/opseu-out-kill-corporate-tax-cuts-humour">OPSEU out to kill corporate tax cuts with humor </a></span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"> </span><span style="font-size: small;"><br />
</span></div><div style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;">Be sure to check out all the <a href="http://www.youtube.com/user/PFCTC#p/u">You Tube page</a> with all of the video, all 15 of them! </span> </div><div style="font-family: Georgia,"Times New Roman",serif;"><br />
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</div><div style="text-align: left;">Bill Tufts </div><div style="text-align: left;">Fair Pensions For All </div></div>Unknownnoreply@blogger.com0