Letter to The Editor, published June 6th 2015, Toronto Star
Your May 28 editorial calls Finance Minister Joe Oliver’s proposal “half-hearted” on the basis that there are already financial vehicles in which Canadians can invest for their retirement.
The Star defends its criticism by saying: “Fewer than 6 in 10 Canadians contributed to a RSP and the average was a modest $3,700” and “just 1 in 10 contributed the maximum to their TFSA.” The piece concludes that, “If pension contributions aren’t mandatory, many won’t make them.”
Some Canadians don’t invest (fully) in their retirement because on one hand they lack the confidence in the existing investment providers and products and, on the other, do not feel qualified to manage investments themselves.
The voluntary CPP top-up option is a great idea. It could be a major step in helping Canadians prepare for retirement because the CPP is just one mean investment vehicle.
It is easy to access (the investor is already identified). It invests in stuff that no private fund let alone investor can. It has generated returns that are extremely attractive. It could offer a very competitive fee structure to manage the funds. It could be made available even after retirement until the RIF years begin. It just is a very strong brand.
The “fewer than 6 of 10” Canadians now investing in RSPs would have the confidence to invest more. And those who are not now investing voluntarily would have an easy-to-use and familiar vehicle to access.
The provision would be attractive to self-employed folks too. Helping more than half of Canadians at all ages and stages without any delta cost to the public purse would be good thing I’d guess.
Let’s forget the debate, implement this program and then argue out further incremental changes to the system over time. Brian Caldwell, Collingwood
