by Barry Weisleder
Pension plans and retirement savings have been hit hard by the downturn. The security of many Canadians is at risk. Some companies even want to cut defined benefit plans that employees paid into throughout their working lives. (That’s a big issue in the United Steelworkers’ strike at Vale Inco.) People with Registered Retirement Savings Plans (RRSPs) and other private pensions that invested heavily in stock and financial markets have seen their investments lose much of their value. There is an urgent need to expand public pensions and reduce reliance on financial markets for economic security. Public pensions remain secure, but they replace only a modest share of previous work-related earnings.
In fact, 11 million Canadians (one-third of the total population) don’t have a workplace pension. 1.6 million seniors qualify for Guaranteed Income Supplement (GIS) benefits (and therefore earn less than $11,300 per year). Employers use bankruptcy courts to shirk their pension promises. In the Nortel bankruptcy case, retirees stand to lose a third of their pension incomes. Average fees gouge a third of workers’ RRSP earnings.
Thus, pension reform is in the air. The New Democratic Party is pushing a Canadian Labour Congress plan. The federal Conservative minority government is resisting. The Liberal Opposition, following the lead of British Columbia and Alberta, wants a CPP supplement to which individuals could voluntarily contribute. The banks, fearing that a beefed up CPP will cut into their lucrative RRSP business, are notably hostile to the idea.
The CLC proposal asks the federal government to:
*Phase in a doubling of payouts from the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP). (The average CPP payout is about $600 a month.)
*Immediately increase by 15 per cent Old Age Security (OAS), which is about $500 a month, and the Guaranteed Income Supplement (GIS), which is about $450 a month for all retirees.
*Create a national pension insurance fund to ensure that workers’ defined benefit pensions aren’t at risk when employers go under or speculative bubbles go bust. (The United States has a pension guarantee fund covering up to about $50,000 of pension income.)
Working people and nature are the source of all the wealth. It is appropriated by Capital. Workers shouldn’t have to beg for crumbs in retirement. In the face of the economic crisis we did not cause, and the bail-out of banks and big businesses we did not approve, our demand is that, in addition to doubling the CPP and QPP, the OAS and GIS be increased sufficiently to ensure that no senior is condemned to subsist below the poverty line (approximately $30,000 a year in large urban centres).
The federal and provincial Finance Ministers met in Whitehorse, Yukon in December, and will meet again in May 2010. Several of them said there’s nothing wrong with the existing pension set up. So, it’s time to start organizing and agitating. They need to hear the CLC’s message amplified many fold: The pension status quo is not an option!