2022 CPC Leadership Discussion: Et tu Redeux

[dapaterson]

Gotcha. Are our retirement plans not healthy?

Which ones?

CPP/QPP have been moving for years to investing in assets, so that they are not ongoing liabilities.

OAS and GIS are paid out of tax income on a year to year basis.

And federal public service pensions are a mixed bag. Last time I looked, the Public Service pays about $1 and has that matched by the GoC. For the CAF (Reg F aka Part I) pension plan, the GoC puts in about $1.70 for every dollar that members contribute. Since CAF (Part I) and RCMP rates are by law can be no more than the PS rates, the ratio will always be elevated (as both plans are more generous than those of the PS).

Interestingly, MPs are required to pay half the cost of their pension benefit, and contribute (consolidated) over 23% of their pay to their pension plan.

 

[brihard]

Just so in clear PP increasing the retirement age (raising it) would be sound fiscal policy? Do I understand this correctly ?

Why ?

Yes it would, whoever proposed it. People are living far longer than they used to. Public and private pension plans face increased pressure, and people are earning and being taxed on employment income for a shrinking proportion of their life. It’s reasonable to bump the public benefits date right a bit.

 

[Halifax Tar]

Interesting. So previous generations have underfunded their own futures and they want the now generations to pony up ?

Hardly seems fair, but par for the course.

 

[OldSolduer]

Yes it would, whoever proposed it. People are living far longer than they used to. Public and private pension plans face increased pressure, and people are earning and being taxed on employment income for a shrinking proportion of their life. It’s reasonable to bump the public benefits date right a bit.

I do think Harper increased it to 67 but that was seen as "cruel". Of course it was reduced to 65,

I am 67 and still capable of doing a mediocre day's work.

 

[brihard]

Interesting. So previous generations have underfunded their own futures and they want the now generations to pony up ?

Hardly seems fair, but par for the course.

No; previous generations die earlier. We’re going to live longer- potentially much longer in actuarial terms.

 

[IKnowNothing]

An increase in retirement age for CPP/OAS is definitely called for at this point. I would support that although it would disadvantage me personally.

Just so in clear PP increasing the retirement age (raising it) would be sound fiscal policy? Do I understand this correctly ?

Why ?

I'm not against raising the age, but my thought was income/means testing focused. OAS clawbacks start at ~81k (per individual! Not household) and only then at 15% per dollar above. Absurd waste of tax payer money. That threshold should be lowered, and the rate increased. The CCB isnt near as bad, but could do with some tightening at the top end

 

[OldSolduer]

No; previous generations die earlier. We’re going to live longer- potentially much longer in actuarial terms.

How true. Thanks to proper nutrition, anti biotics, organ replacements and in some cases plain stubbornness and good genetics.

My mum was 100, her mom was in her 90s, and my grandma on dad's side was 94.

 

[brihard]

How true. Thanks to proper nutrition, anti biotics, organ replacements and in some cases plain stubbornness and good genetics.

My mum was 100, her mom was in her 90s, and my grandma on dad's side was 94.

Good, would like to see you stick around for a long time yet.

 

[Good2Golf]

No; previous generations die earlier. We’re going to live longer- potentially much longer in actuarial terms.

Not so quick with the live longer line…Canadians life expectancy plateaued in the…2015/2016 timeframe and has been declining, according to StatsCan:

Canadians' life expectancy fell in 2022: StatCan

OTTAWA – Life expectancy for Canadians decreased for the third straight year in 2022, and more people died of COVID-19 than in any other year since the pandemic began, according to a report rele...

www.winnipegfreepress.com

Not sure if that is directly related or only coincidental to Canada’s consistent increase in violent crime starting in that same 2015-2016 period…

 

[IKnowNothing]

Not so quick with the live longer line…Canadians life expectancy plateaued in the…2015/2016 timeframe and has been declining, according to StatsCan:

View attachment 84197

Canadians' life expectancy fell in 2022: StatCan

OTTAWA – Life expectancy for Canadians decreased for the third straight year in 2022, and more people died of COVID-19 than in any other year since the pandemic began, according to a report rele...

www.winnipegfreepress.com

How does that compare to life expectancy at 65?

 

[Good2Golf]

How does that compare to life expectancy at 65?

I guess you could extrapolate the downward trend of someone who is 65 today, that they’ll live on average to something a year or two less than if you asked that question back in 2016.

 

[IKnowNothing]

I guess you could extrapolate the downward trend of someone who is 65 today, that they’ll live on average to something a year or two less than if you asked that question back in 2016

Could I? Or has the expectancy at birth been lowered by a higher death rate among the young?

They're different stats , often reported together- hence the question

 

[mariomike]

I am 67 and still capable of doing a mediocre day's work.

I admire your work ethic.

Haven't done a day's work myself, mediocre or otherwise, since my 55th birthday.

 

[Good2Golf]

Could I? Or has the expectancy at birth been lowered by a higher death rate among the young?

They're different stats , often reported together- hence the question

As near as I can interpret StatsCan’s methodology is they have some kind of recursive rolling expected life and it’s not exactly clear to me if they mean that in the current year, the average death age will be the quoted figure or if that will be the expected age of death of someone born today. I think it’s the former.

 

[dapaterson]

Hmm... What could have caused a dip in life expectancy starting in 2020? What sort of public health emergency might have played a part?

 

[Good2Golf]

Hmm... What could have caused a dip in life expectancy starting in 2020? What sort of public health emergency might have played a part?

Probably not the same thing that started the decline in 2016…

Point remains that while some were thinking CPP/OAS/etc will be challenged by Canadians living longer, that appears not to be a valid assumption in the out years. Maybe Canadians hit peak awesomeness a few years ago. By the stats, at least we’re a couple years longer living than our Southern neighbors, so there’s that…

 

[Brad Sallows]

Live expectancy is increasing. Pushing OAS/GIS qualification to the right (as they are paid out of current revenues, not being migrated to an asset base like CPP is) relieves future tax pressure. It's good policy, but bad politics. As opposed to GST cuts, which were solid politics, but bad policy.

GST cut was only bad economic policy from one perspective (tax efficiency, compared to equivalent income tax cut). It was good economic policy (cutting taxes) and good fiscal policy (constraining spending growth).

 

[Brad Sallows]

If it's good policy to move age benchmarks for OAS, GIS, CPP, etc, it's likely also good policy to extend required working lifetime to achieve full pension (eg. minimum 40 years full-time equivalent). Another sound policy would be to stop calculating pension income based on things like "best 3 years" and move to a formula blending all years of employment.

 

[SeaKingTacco]

If it's good policy to move age benchmarks for OAS, GIS, CPP, etc, it's likely also good policy to extend required working lifetime to achieve full pension (eg. minimum 40 years full-time equivalent). Another sound policy would be to stop calculating pension income based on things like "best 3 years" and move to a formula blending all years of employment.

Another thing we could do (and this will hurt) is move away from defined benefit pension plan to a defined contribution plan for federal employees.

 

[OldSolduer]

Good, would like to see you stick around for a long time yet.

Why thank you. I'd like to see my grandkids grow up and become successful in whatever they choose to do. And yes I can be stubborn.