The final speaker of the 2013-14 year was ex-politician Moe Sihota
Moe's strong views came through very noticeably today when he chose a topic that will affect all future retirees. If you have been following this issue you will know that many workers do not have a retirement plan. Moe provided some statistics that looked rather bleak. Apparently 12 million Canadians or two thirds of the work force do not have a plan. Only one third contribute to an RSP.
There is talk of enhancing the RSP program, but there is also much opposition to that and as the employer must contribute to the plan in addition to the worker, there is resistance and the plan has been tagged as an employment tax.
One of the points that Moe revealed was the fact that in addition to the government Registered Retirement Plan an employers own pension plan was also a vital element for the employee. But there were two very distinct plans and one of them provided much more security for the employee. He was talking about the difference between a Defined Benefit Pension and a Defined Contribution Pension which does not assure the employee of a secure pension in the future.
It appears that 85% of employers in the Private Sector provide the latter, a Defined Contribution plan, but all of the Public Sector employers provide the more secure Defined Benefit plan.
Moe was pointing how important it was today for workers to ensure that they made provision themselves for their future as the employee pension plans and government plans such as RSP were not going to be sufficient in the future. He pointed out that at the present time, on average workers in the 55-64 age bracket only had $55,000 saved in their RSPs.
He felt that some added provision was required to ensure that retirees in the future were properly provided for and pointed out that one of the platforms that was presented at the recent election on Ontario was for the new government to provide an added retirement plan similar to the Federal RSP. Everyone in the audience seemed to be impressed by this talk and many questions were asked.
If you'd like to compare the difference between a benefit plan and a contribution plan in detail, check out the following link: -
http://www.sunlife.ca/canada/v/index.jsp?vgnextoid=ce3311ff374ee010VgnVCM1000002dd2d09fRCRD&vgnLocale=en_CA