The problem with pensions, both public and private is that , too many are fully indexed to inflation.
If you examine the successful pensions of large Canadian Companies in Canada, the ones that are fully funded or in surplus... these do not have full indexation to the cost of living.
Modest increases for these plans are dolled out according to the health of the plan...or 60 percent or 40 percent, for example, of CPI for the year, up to a fixed cap and no more after that..( which would result in less than a 1 percent increase, if CPI at 2.4 percent for the year.)
The pensioners that have recently retired with higher pensions, might not get any increase in their pension in these fully funded plans for several years...which makes sense.
The ones that are in serious trouble are usually government backed public sector plans(Ontario teachers for example) with fully indexed to inflation clauses...which causes great resentment from the taxpayer, most not having a company pension to fall back on.
Ontario Teachers recently making survival adjustment to pension plan, limiting CPI full increase to pension, of those with service up to 2008,..pension service earned after that will not be guaranteed full CPI increase but possibly portion there of.I think further adjustments will be coming.. so the taxpayer does not end up on the hook.
Who's paying??...two words to keep in mind daily. <<gg>>
Harper just lost a vote, because he decided not to do his job as hired by the taxpayer and keep the house open and accountable to the public.<g> |
