April 29, 2010

Dear Minister,

On March 24, 2010 you announced cross-country public consultations on the adequacy of Canada’s Retirement Income System. At the same time you invited individual Members of Parliament to conduct their own consultations within their ridings.

Today I am pleased to submit for your review, input I received from constituents in my riding of Lambton-Kent-Middlesex as a result of a public consultation meeting on April 24, 2010 and from calls, letters and emails to my office.

On behalf of my constituents, I want to thank you for the opportunity to do so.  The following, in summary form represents the input I received from constituents to the questions which were posed.


Question 1 - What are the main issues/challenges that Canadians face in saving for retirement?

1. Too many people believe CPP, OAS and GIS will afford them the same standard of living they had pre retirement.  Governments must educate young people through schools and public information campaigns on the importance of retirement savings.
2. Young people are not educated in the school system about retirement planning
3. People who purchased whole life insurance policies as investments are taxed on the total redemption which includes the cost of the life protection service.
4. As a general rule, every generation should be responsible for its own retirement income and not depend on a succeeding generation.
5. Higher taxes mean less money available for savings

Question #2 - What is the appropriate role of governments in supporting Canadians to achieve adequate retirement income?

1. To teach Canadians government has a limited role in providing a retirement income system and that the responsibility for retirement income rests with each Canadian.
2. To establish a fair tax system that rewards retirement savings
3. Government should not redistribute in any fashion the savings of Canadians with those who choose not to save.
4. Government should consider increasing CPP benefits for low income seniors by increasing the benefit calculation from 25% to 50%, increasing premiums, legislating participation by the self-employed and those who do not work.
5. CPP should also include workers who have contributed to CPP for any five-year period in their working career with benefits based on earnings and contributions at the time they were earned.
6. CPP contributions should be based on a rate which will provide 70% of pre retirement income.
7. Government should not allow claw back of CPP benefits to high income seniors because they made the contributions over the course of their work life.

Question #3 - Does the retirement income system currently have the appropriate mix of public and private support?

1. No response

Question #4 - Are changes needed to further strengthen Canada’s retirement income system?

1. Lower taxes
2. Legislative changes to protect employee pension plans including

i.An agreement between the federal and provincial governments that guarantee employer contributions to pension plans and provincial entitlements to termination, vacation and separation payments are made in the same way and subject to the same regulations as payroll remittances.  This would protect the income of workers in the event of employer bankruptcy/receivership.  This would also save the government hundreds of millions of dollars each year in Employment Insurance Benefits, WEPP payments, social, justice and healthcare costs.
ii.Legislation should also be enacted to prohibit access by employers to employee pension plans or establish limits on the amount a company can access.

Question #5 - Should there be more mandatory retirement savings?

1. People cannot spend what they do not see or cannot access.
2. Must include everyone in CPP
3. Direct a percentage of tax refunds to CPP in addition to payroll contributions

Question #6 - Should individuals be auto-enrolled in any new voluntary savings program?

1. If a person is auto-enrolled it is no longer a voluntary savings plan
2. Auto-enrolment is good if there are opt out provisions
3. Auto enrolment only for government operated plans

Question #7 - Should increased savings, whether mandatory or voluntary, be locked-in for retirement purposes only?

1. The Government has no business in telling people what they can do with for retirement purposes only their own money
2. Locked in funds should have limited access and then only for pre defined emergencies
3. The only way to ensure retirement income is to prohibit access to savings until retirement – no exceptions.

Question #8 - Should there be more flexibility and choice with respect to private
savings options?

1. Canada Savings Bonds should be tax free to encourage Canadians to invest in their country
2. Establish Registered Home Ownership Savings Plan for parents and Grandparents.  Contributions should not count against RRSP limit and would be non-taxable for the designated child when building a new home.

Question #9 - How would the approaches described in the consultation paper impact you personally and/or your business?

1. The government should not compete with financial institutions
2. Will not affect those of us who are already retired but government must be concerned about future generations

Question #10 - How should any changes to the retirement income system be financed?

1. Changes should be financed by the beneficiaries
2. Government should not punish those who have saved and spent responsibly during their lifetimes.
3. People should benefit on the basis of what they have put in.
4. Government needs to make allowances for those who through no fault of their own have not been able to save.  This would be limited to those who have medical conditions which did not allow them to earn a working income.

As you will note Minister, the input received from my constituents is as diverse as those who reside in my riding.  I believe this report represents a fair cross-section of opinion, which if I were to summarize would be the following.

1. Individual Canadians should be responsible for their retirement incomes with certain health-related and defined exceptions.
2. Changes can and should be made to CPP but should continue to be financed by employers and employees.
3. The Government must do more to educate young Canadians about our retirement income system and to take responsibility for the adequacy of their own retirement income.
4. Lower taxes will provide money for savings and should be encouraged.
5. Employment earnings whether wages, pensions, severance and termination entitlements must be protected in the cases of employer bankruptcy.
6. There needs to be more tax-supported investment options.
7. Savings, whether voluntary or mandatory should apply to all Canadians who should be auto enrolled but have an opt out feature.
8. Responsible Canadians should be rewarded for savings and not be punished at the expense of those who did not save.

Minister, I think you for the opportunity to make these representations on behalf of my constituents.  Should you have any addition comments or questions, please let me know.
Yours truly,


BEV SHIPLEY, MP
Lambton-Kent-Middlesex