Tuesday, 31 January 2012

Getting it Wrong and Limiting Debate on Pensions

The first day of Parliament 2012 and the Conservatives are already strangling debate.

As we have seen in previous years the Conservative MPs unable to speak for themselves got up and repeated the same old talking points... this time on Pooled Pensions.

Watching the debate I could picture political science students across Canada making a drinking game of the phrase "too important to get wrong".

The problem is Conservatives are getting it wrong with pooled pension plans and they know it.

For over a decade in Australia the exact same thing was tried and was such a colossal failure that Australian government is in the process of dismantling the program.  The Canadian version of the legislation bill C-25, is so similar to the Australian legislation that the Canadian authors could be accused of plagiarism.

Joy Smith , M.P. Kildonan - St Paul
NDP asked why, knowing the dismal results of the exact same plan in Australia why would the Conservatives want to implement the same thing here?

Conservative MP Joy Smith answered: "This is the first time something like this has been tried in Canada."  

Flawed logic aside here is what you need to know:

C-25 places no limits on the fees institutions can charge for administering pensions. In Australia this resulted in fees so high that any returns were being negated! In other words, stuffing your mattress would be an equally effective retirement strategy since after paying administrative fees you would basically break even.

C-25 places 100% of the risk and burden on the employees participating. The employer is not required to make any contributions and there is no guarantee of benefits at the time of retirement. (That mattress is looking more and more attractive.)

Businesses are on board because they bear no responsibility. (The Conservative talking point "low-cost plan" is referring to the employers.)

Conservative MP after MP got up yesterday and talked about how financial institutions and insurance companies called this scheme "an excellent opportunity" Given the Bill C-25 is giving them carte blanche on the fees they can charge for management and administration -- What else would they say? No one would argue, C-25 is an excellent opportunity for banks and insurance companies to make money at the expense of the plan members.

 If the Conservatives believe retirement security then following failed schemes and limiting debate are not the way to achieve this goal.  Because pension and retirement security are indeed too important to get wrong.

Government to hurry debate on pooled pension plan - Politics - CBC News:

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1 comment:

  1. Your idea that the Cons. are making decisions without consultation, and which changes the life of the average person, is valid. Why aren't they asking us our view? Because we voted them in majority.


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