Here is a look at the issues facing seniors

1. 2019 ELECTION -
RETIREMENT
AND SENIORS -
CANADA –
SEPTEMBER 2019
BY: PAUL YOUNG CPA, CGA
DATE: SEPTEMBER 19, 2019

2. PAUL YOUNG - BIO
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Financial Solutions
• SME – Business Process Change
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. INTRODUCTIO
N
• This presentation looks at the issues facing
various pension plans across Canada as well
as looks to see if people are saving for
retirement
• This presentation will also discuss the
seniors concerns going into the 2019 election

4. AGENDA • TSX Market Returns
• What is C27
• Pension Plans
• Issues with Pensions / Government
• Pension Fund Returns
• Liberal Policies and the stock market
• NDP and Pensions
• CPP Hikes and business impact
• Blog – Seniors

5. WHAT IS C27
Source - http://www.moneysense.ca/save/retirement/pensions/defined-benefit-pension-plans-due-change/
Bill C-27 is an Act to amend the long-standing Pension Benefits Standards Act.
Those in favour of pure Defined Benefit (DB) pension plans have criticized Bill C-
27, saying it would allow federally regulated employers to replace DB plans, which
provide a guaranteed retirement income for life with no risk, with Target Benefit
Plans (TBPs) which are also generous pensions but because they count on
employees taking on some risk, final retirement guaranteed payments may not be
as iron-glad.
Source - https://canadiandimension.com/articles/view/bill-c-27-pension-reform-an-
unprecedented-attack-on-all

6. MARKET RETURNS / EQUITY - TSX
SOURCE – BMO - ECONOMICS

7. PENSIONS
PLANS
Source -
https://www.fraserinstitute.org/sites/default/files/c
omparing-government-and-private-sector-
compensation-in-Canada-2016.pdf

8. GOVERNMENT PENSIONS
Source - http://o.canada.com/news/auditor-general-government-should-re-
examine-design-of-pension-plans-to-ensure-sustainability
Public servants are working fewer years and living longer in retirement on their pensions
– in fact, about 27 years longer – than when the plans were created more than 40 years
ago. The report found that a further increase in life expectancy over time, of between
one to three years, could boost the plans’ actuarial obligations by between $4.2 billion
and $11.7 billion.
At the same time, the plan has faced the volatility of the market since the 2008 financial
crisis and low interest rates, increasing the cost of pension obligations.
The plans have a major impact on Canada’s debt and deficit. The three plans have
liabilities totalling $152 billion, the second-biggest liability after Canada’s market debt.

9. LIBERALS AND PUBLIC
SECTOR
Source - https://www.liberal.ca/wp-
content/uploads/2015/10/New-plan-for-a-
strong-middle-class.pdf

10. WHAT IS DIFFERENCE BETWEEN TBP, DB AND
DC PLANS
Source - http://www.moneysense.ca/save/retirement/pensions/defined-benefit-pension-plans-due-change/
TBPs can place explicit limits on the volatility of employer contributions. So if a funding deficit
arises in a TBP (because of underfunding, or lower-than-expected investment returns, say), part or
all of it can be compensated for by reducing accrued benefits to employees whereas a traditional
DB plan would require the entire deficit to be funded by increased contributions on the part of the
employer—the federal government (and by extension, the taxpayer).
Less desirable than either DB or TBP plans are DC plans, which are mostly self-directed by the
employees who own them. (If you have a pension with your employer you likely have one of these.)
That means that contributions are completely fixed and mostly paid by the plan holder, and there’s
a lot of uncertainty as to what retirement income payouts will be because that depends entirely on
the way you managed and invested your DC pension money over time.

11. BLOG – NDP AND
PENSIONS
• Seriously? What joke? Do you even grasp how
pension funding works?
• Pensions have rules (GAAP)
• What party wants to hike taxes and keep
carbon tax? That would be NDP!
• I do not see Teachers asking the govt to cut
their matching, why?
•
• https://www.slideshare.net/paulyoungcga/pen
sions-world-and-canada-analysis-july-2017

12. BLOG - PENSIONS
• https://www.cpacanada.ca/-/media/site/business-and-accounting-
resources/docs/aspe-briefing-section-3462-employee-future-benefits-a-focus-on-
defined-benefit-plans-november-
2014.pdf?la=en&hash=52A1B18BCA458C959F7AEBE574CCB8DAE4C027F9
• I have been through audits and you haven’t Pension Funds are tested. The
bankruptcy laws need to be changed
• Pensions plans can be revised, especially if there issues with funding. i.e.
cutting back payments. cost to borrow against pension assets
• That is your opinion on GM, right? Pensions funds are held in trust.
Companies going through restructuring can put a freeze on pension funding as
part of their restructuring. Sears plan had its mistakes, especially the
appointed trustees should not allow bonuses to be paid out
• Private sector in the 1990s moved away from DB to DC plans as the companies
were saying the DB were to risky.
• Govt pensions continue to be review as part of their solvency. I cover that in my
presentation - https://www.slideshare.net/paulyoungcga/pensions-world-and-
canada-analysis-july-2017 Read up on accounting for pensions before you spout
of your expertise!

13. CPP HIKES • Businesses said CPP Hikes were to high -
https://www.cfib-fcei.ca/en/advocacy/cpp-
canada-pension-plan or
https://www.ctvnews.ca/politics/cpp-deal-
bad-for-small-business-canadian-chamber-
of-commerce-1.2956059
• People are saving for retirements -
https://www.cbc.ca/news/business/census-
canadian-saving-1.4287219
• TFSA benefited low to middle class Cdns -
https://business.financialpost.com/personal
-finance/tfsa/exclusive-canadians-maxing-
out-their-tfsas-from-all-walks-of-life
• CPP hikes were done on purpose so that
CPPIB had more funds to invest with
infrastructure projects across Canada
• CPP hikes do not help people already on
CPP or OAS or Income Supplement

14. LISA RAITT VS JUSTIN TRUDEAU CPP
Source - https://twitter.com/lraitt/status/1078842026676781056

15. ARE PEOPLE SAVING FOR RETIREMENT
• Here are my comments to LPC/NDP https://www.canadianmanufacturing.com/human-resources/canada-sole-member-g7-not-
raising-retirement-age-adding-big-costs-report-204743/
• Harper had it right when it came to pushing out the retirement age to 67.
• http://www.msn.com/en-ca/money/other/proposed-cpp-changes-would-hike-premiums-starting-in-2019/vi-AAhnSmb (This is rich
coming from Morneau as he was the former CEO of Morneau Shapell that focused on Pension Plans)
• Morneau - http://www.plant.ca/general/with-the-federal-budget-tabled-morneau-prepares-to-refocus-on-cpp-expansion-
157272/?utm_source=CPLT&utm_medium=email&utm_campaign=CPLT-EN03292016
• Justin Trudeau - http://www.thestar.com/news/canada/2015/06/25/justin-trudeau-pension-plan-could-eliminate-need-for-ontario-
version.html
• Scott Brison comments - http://news.nationalpost.com/full-comment/scott-brison-more-infrastructure-stronger-economy
• John McCallum comments - http://www.cbc.ca/player/News/Politics/ID/2668016113/
• OAS/NDP - https://www.youtube.com/watch?v=32bySE5UMw4
• It is funny how people read the by-lines, but never actually look at the programs and/or asked the question to why people are
not doing more for their retirement. Here are examples of programs including the trends. JT talks about retirement, but has
never once said how he will fund the changes to OAS or CPP, why?
Summary / CPPIB
• Liberals dropped the TFSA to 5,000 - https://business.financialpost.com/personal-finance/tfsa/exclusive-
canadians-maxing-out-their-tfsas-from-all-walks-of-life
• Trudeau also has made statements that CPPIB will be encourage to invest in infrastructure projects -
https://www.theglobeandmail.com/report-on-business/cppib-head-cautious-on-canadian-
infrastructure/article32617837/
• Transit systems are subsidized - https://www.slideshare.net/paulyoungcga/canada-transit-analysis-for-
october-2018
People are saving for retirement
https://www.cbc.ca/news/business/c
ensus-canadian-saving-1.4287219
Government policies and Issues

16. PENSION FUND
RETURNS
Source -
http://www.rbc.com/newsroom/ne
ws/2019/20190205-rbc-its-q4-
2018.html

17. STOCK MARKET / RETURNS
• Liberals are introducing bad policies like carbon tax, C69, C49, small business tax reforms, etc. that
are leading to business competitiveness - https://www.slideshare.net/paulyoungcga/2019-election-gdp-
and-economy-canada - Lower stock market returns put pressure on pension funds
• Government is holding the line on interest rates. Many pensions funds have money market
investments - https://www.thestreet.com/personal-finance/what-is-money-market-account-14860277 -
The BOC is holding rates as there are issues with sluggish economy and high household debt -
https://www.slideshare.net/paulyoungcga/2019-election-who-do-you-trust-more-to-make-housing-
more-affordable

18. BLOG - NDP AND PENSONS
• It is funny how you quote his policy book when in fact it never provides details including Canada’s role with NATO
or the United States, right. Secondly, Mulcair has never come clean what his investments will be in the military, but
if this comments from NDP is reflection https://www.youtube.com/watch?v=32bySE5UMw4 then there will be either
no investment or little investment. Yet, Ms. Leslie’s riding is gaining the economic benefits from the frigate contract,
but no comment from Leslie and/or Dewar, why? http://atlantic.ctvnews.ca/halifax-s-irving-shipbuilding-to-lead-26-
billion-frigate-replacement-program-1.2199422 or http://thechronicleherald.ca/business/1293835-arctic-patrol-
vessels-%E2%80%98really-have-started%E2%80%99-construction-says-irving-president
•
• I bet you come back on the pensioners, right? The NDP never does research on any files as such pensioners are not
different when they make statements:
•
• Federal - http://www.taxtips.ca/seniors.htm
• TFSA - http://www.slideshare.net/paulyoungcga/taxation-policies
• RRIF - Susan Eng – Retirees - http://www.benefitscanada.com/news/budget-could-loosen-rrif-withdrawal-rules-65697
• OAS – Many EU countries have moved OAS age up due to sustainability. Harper had it right!
https://www.theglobeandmail.com/investing/personal-finance/article-how-raising-the-age-for-cpp-and-oas-to-67-would-benefit-
the-whole/
• CPP hikes will not help those seniors on CPP - https://www.cfib-fcei.ca/en/media/2019-cpp-increase-isnt-worth-pain-small-
businesses

19. CPP HIKES AND BUSINESS
Source - https://www.canadianmanufacturing.com/financing/roll-out-of-higher-cpp-costs-
expected-to-affect-hr-budgets-for-wages-benefits-232539/
That’s because the additional CPP cost faced by
employers in 2019 is very modest and each year’s
incremental costs will also be relatively small until all
the increases are implemented in 2025.
“I think some organizations look at that and there
probably isn’t a sense of urgency to do something now,”
Hamilton says.
“But they may feel differently when we’re closer to being
fully implemented and they’re feeling the full impact of
the increase in costs.”
Jean-Philippe Provost, senior partner at Mercer Canada’s
wealth business, notes the employer portion of
contributions will be a full percentage point higher in
2023 than in 2018 before the increases began.
“If you’re working in an industry that has very, very low
margins, a per cent can make a big difference – especially
if people costs (are) the lion’s share of your expenses.”
Surveys conducted prior to implementation of the
enhanced CPP indicate pension plan sponsors have been
looking at what’s being considered by other companies,
but few have taken action yet.
• Government never properly consulted
business groups when they moved
forward with CPP Hikes -
https://torontosun.com/2016/06/21/so-
much-for-saving-for-ourselves-business-
not-pleased-with-cpp-
hike/wcm/8b8f3f38-75bc-4409-a981-
0616b9faa194
• Stock Markets took a plunge late last
year -
https://www.bnnbloomberg.ca/cppib-
ekes-out-1-1-return-on-investments-in-
q3-despite-december-downturn-
1.1214369
• The federal government goal was to
have CPPIB invest in infrastructure
projects -
https://nationalpost.com/news/canada/h
ead-of-35b-infrastructure-bank-pushes-
back-against-political-influence-claims-
defends-low-interest-loan

20. BLOG - SENIORS
• @FilomenaTassiMP
Can you tell me and rest of Canada how carbon taxation will be good seniors or the fact that you never changed
CPP for existing seniors. Seniors have discussed issues with death benefits, right?
https://www.slideshare.net/paulyoungcga/2019-election-retirement-canada-may-2019
@emilia_suze
• Canadian Seniors
• Liberals love to mislead people on what Harper and the CPC did for seniors:
• Carbon tax hurts so people on fixed income – Carbon tax is regressive tax -
https://news.ontario.ca/ene/en/2019/04/ontario-stands-up-for-seniors-by-opposing-the-costly-federal-carbon-tax-1.html
• OAS needs to be affordable - https://www.theglobeandmail.com/investing/personal-finance/article-how-raising-the-age-for-
cpp-and-oas-to-67-would-benefit-the-whole/
• Seniors and Poverty - https://cpj.ca/poverty-trends-2018/
• Harper introduced Pension Splitting https://www.moneysense.ca/news/trudeau-harper-clash-over-pensions-and-income-
splitting/
• Harper spent on Elderly benefits - https://globalnews.ca/news/2222185/reality-check-trudeaus-claim-harper-
No money for Vets
https://torontosun.com/news/national/illeg
al-border-processing-costs-alone-to-
exceed-1-billion-pbo-report Trudeau’s priorities are not with Cdns

21. SENIORS AND POVERTY
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/190226/dq190226b-eng.htm
• Liberals forced carbon tax which has led to issues with seniors, i.e. electricity and food costs -
https://www.slideshare.net/paulyoungcga/2015-election-promise-justin-trudeau-and-liberals-i-will-make-things-more-affordable
• Poverty is still a big issue - https://cpj.ca/poverty-trends-2018/
• GIS needs to be review to ensure it benefiting the seniors - https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-
security/guaranteed-income-supplement/eligibility.html

22. SOLUTIONS
• All new government employees should be moved to defined contribution plans.
• This would eliminate pensions being based on your five best years
• Defined Benefit plans should be slowly rolled into Defined Contribution plans as part of union
negotiations.
• Guarantee Income Supplements needs to expanded to include more people
• Government matching pension should be topped at 4%
• MP life-time pensions should be replaced with defined contribution plans including matching up to
4%
• CPP Hikes should only be tied to inflation.