Newspaper article The Canadian Press

Editorial Exchange: A Better Plan for Retirement

Newspaper article The Canadian Press

Editorial Exchange: A Better Plan for Retirement

Article excerpt

Editorial Exchange: A better plan for retirement

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An editorial from the Waterloo Region Record, published June 23:

This week's historic deal to expand the Canada Pension Plan is a political surprise that should be surprisingly good for middle class Canadians when it finally starts paying out.

While CPP reform has been a sticking point on the national agenda since 2009, the subject was so contentious as well as so complicated that no agreement between the federal and provincial governments seemed possible, at least until this week.

Advocates of an enhanced national pension plan argued fiercely that too few Canadian workers, especially the young, have either an adequate company pension plan or sufficient personal savings to ensure them a decent income and standard of living in retirement.

Opponents were as stubborn in maintaining that higher CPP premiums for employers and employees would damage a national economy still recovering from recession and that workers already had enough options to prepare for retirement without the interference of a paternalistic government.

But this week, the supporters of change and those who had resisted it found common ground. Call it a classic Canadian compromise. The federal government, accompanied by eight provinces -- all but Quebec and Manitoba -- moved carefully, even cautiously. They agreed to delay the start date for the CPP expansion until 2019. Furthermore, the increased contributions will be phased in gradually until 2025.

While some in the business community have already denounced the plan as a job-killer, the hike in premiums looks reasonable and affordable -- for everyone. Employers will eventually pay about $408 a year in increased CPP premiums for each employee. In turn, each employee will match the higher premium.

The increase in benefits will be significant though hardly lavish. …

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