We need to be doing more to protect the pensions of Canadians.
That was the clear message behind the legislation our caucus has introduced on pensions in Parliament.
Canadians have seen their pensions put in jeopardy. Nortel workers are losing hope that they'll ever see their full pensions or benefits. Pulp and paper workers are losing many of their retirement benefits. People have devoted their life to a company, paying into a pension plan for 40 years-only to discover more than a decade after their retirement that the money for their benefits has disappeared.
Pension plan under funding means many more workers will never see the retirement income they are counting on. This is on top of the fact that fewer than 40 per cent of Canadians even have workplace pensions.
Many Canadians rely on public pensions and private savings. Public pensions provide at most $16,000 to the typical retiree. Privately, only 31 per cent of Canadians contributed to an RRSP last year-and they've just seen billions in savings vaporize. Today, 266,000 seniors subsist on a poverty-level income. What we are facing is nothing short of a national crisis.
We have put forward four pragmatic proposals that can be deployed immediately to strengthen this country's system of retirement security
We will be outlining a comprehensive plan to help Canadians finance their retirement.
First we must eliminate seniors' poverty. The mechanism is ready to go. We can put a price tag on it. Statistics Canada figures the "poverty gap" among seniors at less than $700-million. We propose increasing the Guaranteed Income Supplement to close the gap. This is a $700-million solution to ensure dignity for the seniors who built this country.
Second, let's strengthen the Canada Pension Plan. Fully 93 per cent of Canadians are already members. No other option provides so many advantages at so little cost. Specifically, we propose phasing in a doubling of CPP/QPP benefits, in consultation with the provinces. This would increase the top monthly benefit from $908 to $1,817, helping to secure a livable retirement for Canadians. Doubling benefits will require an additional payroll deduction that is less than the administration fees alone on many RRSPs.
Third, it's time for a national system of workplace pension insurance. Under funded pensions are an epidemic calling for a range of solutions.Though our "Workers First initiative" in Parliament, we have secured some protection for unpaid wages when employers go bankrupt. We are still fighting to move workers' under funded pensions to the front of the creditor line-ahead of the banks. At the same time, workers need insurance guaranteeing a minimum pension income when their workplace plans fail. We propose a self-financing, mandatory insurance system funded by the plan sponsors. This is standard in the United States. We are proposing a national plan ensuring pension payouts up to $2,500 per month.
Finally, let's create a public facility that can "adopt" orphaned pension plans. In bankruptcies, workplace pension plans may be wound up and converted to low-interest annuities. We propose creating a facility to adopt pension plans orphaned in employer bankruptcies. The CPP Investment Board would manage this facility. It would be empowered to adopt pension plans of both federally and provincially regulated companies - subject to an agreement with the provinces.
It is time for bold action to protect and enhance the pensions and retirement incomes of the people that built this country.
