Pension reform should aid women

TheStar.com – News/Ontario
Published On Mon Oct 18 2010.    Richard J. Brennan Ottawa Bureau

OTTAWA—Retired Canadian women aren’t getting their fair share of federal pension benefits compared to men, Ontario Finance Minister Dwight Duncan said Monday.

Duncan told reporters following a speech to the Canadian Labour Congress that’s just another reason the entire system of retirement benefits needsto be overhauled with an eye to phased-in “modest” benefits increases.

“Women aren’t collecting CPP the way men do. There tends to be greater challenges to women getting the maximum,” Duncan said, noting that the maximum benefit under Canada Pension Plan is $11,000 a year while the average is $6,000.

As of December 2009, the average annual CPP retirement benefit for women was $4,906.56, compared with that of men of $7,128.24 or about 69 per cent.

Pension reform is on the table at the next federal-provincial territorial finance ministers’ meeting in December. Ontario is expected to release a discussion paper outlining its position within the next few weeks.

“I have always felt this is going to be a long process,” Duncan said. “We have to look at moving toward a better integrated national pension system, both private pensions as well as the public pensions.”

Back in June finance ministers and pension experts held a meeting where they agreed a sizable minority of Canadians face a decline in living standards in retirement unless action is taken.

Any change to CPP would require the support of seven provinces, representing more than two-thirds of the population, even though Quebec has a parallel pension plan with slightly different benefit rules. Together, Quebec and Alberta have a large enough population to veto any change. So far Alberta is not interested.

At issue is the potential impact on the economy, consumer demand and job creation that an increase in CPP contributions might have. They are now set at 9.9 per cent of pay on income up to $47,200, with contributions split equally between employers and employees.

Federal Finance Minister Jim Flaherty has stated the expanded CPP should be complemented by changes to federal tax rules and federal and provincial pension standards, adding that way, governments can allow banks and insurance companies the flexibility they need to offer low-cost pension plans to multiple employers, different types of employees and the self-employed.

Such changes, Flaherty stated, “will help enhance retirement savings and pension coverage without compromising our current system and without passing costs on to future generations.”

Ken Georgetti, president of the Canadian Labour Congress, told reporters the federal government is going to have to make the first move on pension reform, which it can do, he said, be defining what it means by a modest increase.

Organized labour has recommended roughly a doubling of the $11,000 maximum over two decades.

“We think our proposed is modest … (it) would only put people just above the poverty line and most people don’t have a pension plan, So 40 years out most people will be able to retire at the poverty or just above,” Georgetti said.

Flaherty has already said there’s no support for doubling CPP benefits.

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1 Comment

  1. please keep me updated.thank-you

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