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HERALD Wednesday August 1991 Money Matters Page 15 Future retirement income needs special attention By PAUL J Herald la The Federal government has long recognized that there should be a means for Canadians to derive an income in their Golden Yean Over the years in addition to pension plans provided by private and government employers social safety nets such as Old Age Security and the Guaranteed Income Supplement were introduced to assist lower income people The Canadian Pension Plan makes provision for additional income to those who were employed on a sliding scale for incomes up to the govern ments inflation adjusted upper limit of earnings which is now about 28 Both of these programs at their best will provide about per cent of final employment income Not usually sufficient Recognizing that this would not be enough tax deductible were introduced by Ottawa several decades ago Rules for tax deductible contnbu to pension plans were revis ed Because of the tax deductions allowed it has the effect of put ting a ceiling on government tax revenue This cap also applies to the deductions available through Registered Pension Plans This ceiling or cap limits the government revenue loss because all of the earnings in these plans are tax free until paid out as pensions or an or deregisttred RRSPs In this way Ottawa and the pro vinces help us save for retire ment The amount of income that you will receive in retirement from an or a is directly related to the amount of money in the plan it can only pay out the earnings of the money in the plan or else the capital in the plan when the capital is gone there will be no more income The Canada Pension Plan pays benefits from CPP tax revenue as it goes along there is no fun ding no pool of capital to invest to pay the benefits The benefits are paid out of current revenue As inflation and a growing number of older people qualify for increased benefits it is the younger employed who are being saddled with the costs of this well intentioned but seriously flawed program In an Registered Pension Plan there is a maximum benefit payable of after years employment or 2 per cent per year times the average of the three consecutiVL years of earnings This upper limit again was set to cap tax deductions along the way Although several ITS YOUR MONEY Paul J Rockfl Meet the managers Customers come first The new manager for both of Georgetown s Royal Banks Steve Hay says his objective is to develop relationship banking versus the traditional transac banking In transactional banking the customer would come in and we d give them what they asked for he said We want to offer rela on ship banking where customers deal with one in dividual and become fully aware of the overall banking facility The whole move towards service oriented and personal banking included a change in management practices which was designed to bring together the Main St and Mountainview Road branches of the Royai Bank as one unit rather than two in dependent banks Mr Hay was hired to be the manager of personal banking for the two Georgetown branches on April 15 to accommodate this change of direction Before taking his current posi in Georgetown Mr Hay took a month business training pro gram to complement the and a half years of experience he s garnered with the Royal Bank He s held various management and senior assistant management positions at Royal Banks in Ontario His last job involved working with wealthy clients in banking at a Royal Bank in Waterloo Mr Hay who now lives in Georgetown is a Georgetown Rotary Club member and direc tor with the Halton Hills Chamber of Commerce married and has a son He said he s found the people in Georgetown to be very friendly and found despite the smaller size of the community Georgetown has a lot to offer THE CORPORATION OF THE Town of Halton Hills 1 lis Drvo P O Box HILLS Georgetown L7G 5G2 NOTICE OF PUBLIC MEETING WARD 2 10th LINE REGIONAL ROAD NO 23 Council for the Town o Halton Hills will conduct a Public Meeting to examine and discuss a proposed amendment to Zoning Bylaw to permit a farm dealership and garden centre operation The subject property is located at the intersection of the Tenth Line and Regional Road No with the property being described as Part of Lot Concession 1 1 Town Halton Hills Further information is available in the Planning Department ALL INTERESTED CITIZENS ARE WELCOME Time Date Monday September Location Council Chamber Halton Hills Civic Centre 1 Hills Drive Hills Georgetown File No AD No changes to pension legislation Bill C52 were passed on June 27 there is currently ongo committee proposals for fur ther amendments It may be that these limits will be raised in some cases We do know that RRSP limits have been raised Let s not talk about the deal the Federal politicians have set up for themselves At the present time however a year employee in a pension plan who earned per year in the last three years is limited to a pension of 2 per cent times 20 years times 000 or per year No wonder the government has increased the limits even for those who have an employer sponsored pension plan Members of the largest pension plans in Ontario may have a lot more to worry about In a provincial task force explored the idea of merging the Ontario Teachers Ontario Public Service Hospital and Hydro pension funds into one big fund similar to the Caisse de depot et placement in the pro vmce of Quebec that among other things could be used by cur rent governments to serve their political ends It was rejected in It would be a huge breach of trust to these employees pen fund monies for political pur poses Now with the current Ontario government it is reported that plans are underway to revive the merger idea If you were a teacher or hydro employee how would you like the government to grab your pension savings to bail out situations like those which have occurred recently in Sault Mane or or even reduce the deficit instead of using all taxpayers dollars They don t seem to understand that it is not their money Speaking of the Ontario Teachers Pension Fund over the years the teachers have negotiated for themselves a plan that provides for very good benefits indexed payout and the like At the same time those charged with investing the money have done a poor job For many years they have lent the teachers money to the Ontario Government at ridiculously low rates of return One pension fund manager told me recently that as a result there is an liability of between to billion dollars not enough money to pay out what is committed to Do teachers think that the rest of the taxpayers should pay for this pro blem again If you were putting per cent of your gross income into saving for retirement how would you like those apples Do you know the difference bet ween an integrated pension plan and a stacked pension plan Do you know what the new limits for are whether or not you have an employer pension plan The bottom line is that it behooves all of us to be more aware of the source or lack thereof of our future retirement income As specialists in retire ment planning independent financial planners can help Not only to sort out the rules tax and otherwise but to advise on a wide choice of various investments For more information contact Peter Fagan Drive Georgetown Ont or phone 877 Paul J the author of the best seller Why I Invest in Mutual Funds and President of Regal Capital Planners Limited a yearold financial planning company with offices from coast to coast in Canada Once again weve reduced our 15piece bucket In price only Now for a limited time you can enjoy a 15piece bucket of delicious Kentucky Fried Chicken for a very enjoyable price Just 99 plus tax Same great taste Only the price has been reduced Nobodys CookinUke Todays MFC AVAILABLE AT 116 GUELPH STREET GEORGETOWN 8775241 12 MAIN ST NORTH ACTON 8532510