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www.insideHALTON.com | OAKVILLE BEAVER | Friday, April 25, 2014 | 20 A Metroland Special Series: Part 1 All work and no play: Ontario's Retirement Crisis "I really can't believe people expect to get by on just CPP," said Susan Eng, vice-president for Advocacy at the Canadian Association of Retired Persons (CARP), the country's foremost advocacy group for seniors. No one ever said growing old in Ontario would be easy. "They (CPP) were always meant to provide a base so that Take for instance, the increased health concerns, intensified the private sector and private savings can fill in the gap. CPP wrinkles and the whole notion that there's less time ahead of just doesn't provide enough to live on." you than behind you. The public may have noticed that seldom does CARP use But, at least we have our retirement years to look forward its full name anymore. Even their website doesn't include the to, right? Retirement is the time in life when we put away the name: "Canadian Association of Retired Persons." work boots and enjoy life -- taking trips to tropic locations, "That's because the name isn't really relevant anymore since maybe touring Europe, or finally buying that luxury car we half of our 300,000 members either can't (afford to) retire, or could never afford. And, of course, we can spend more time choose not to," Eng said. with family. Several ideas have been floated in It's the life we've dreamed of, as recent months on how to address the promised by those popular Freedom shortfall in retirement savings. 55 and Pacific Life insurance comOne solution would see an pany commercials. increase in mandatory contributions Well, Deaven Lewis didn't get that to CPP with the goal of substanmemo. Even at the ripe old age of tially raising CPP pension payments 66, the Malton father of two can only and doubling the current maximum dream of retirement. yearly payout of $12,000. "Is that a joke?" he replies, when asked Funding such an expansion of if he has any plans to give up his partthe CPP would require a hike to time job at the Metro grocery store in premiums paid by workers and Brampton. "If I retire now, I'll be living employers. on beans, water and (pasta). At least this The Canadian Labour Congress job allows me a little disposable income." argues that even a modest increase Lewis, a former financial services to CPP could solve the pension officer in the banking industry, is part crisis. A worker earning $47,200 of Ontario's looming pension crisis -- or more per year, for example, Baby Boomers and future generations could gradually double future who are in jeopardy of living in poverty CPP benefits with an initial preas a result of an increased life expectancy mium increase of 9 cents an and a lack of financial foresight. hour, or $3.57 a week. Lewis said he made a generous salary That's less than the cost in commercial services. But, he never had of a newspaper subscripa pension plan outside of CPP. He and tion, the Labour Congress his wife Deanna live in a semi-detached notes. However, critics of this home in Erin Mills, which they are still option, included among them p u ro G ial paying a mortgage on. the Canadian Federation of (BMO Financ The couple has some retirement savIndependent Business, as well 2014) h rc a M y, e rv su ings put away in the form of Registered as Quebec and Alberta, and to Retirement Savings Plans (RRSPs). some extent the federal gov"But if I could go back, I would have defiernment, have deemed mandatory nitely looked for a work pension plan, not increases a "job killer." much I can do about that now," he said. Calling it an added tax on business, opponents say a mandaAccording to the Ontario government, less than 35 per cent of tory pension plan could put the province at a competitive disworkers in the province have a pension plan at work, while only advantage. The other pension fix being touted is a voluntary 28 per cent of private sector workers belong to a pension plan. plan called Pooled Registered Pension Plans (PRPP). Without a proper fix to Canada's pension system, many Under PRPPs, the self-employed or employees of compamiddle-income earners risk retiring without a fiscal safety net. nies without pension plans, could make voluntary contribu"The cost of not doing anything is the real measure here," tions to a professionally managed pooled fund. said Ontario Finance Minister Charles Sousa. The payout would depend on individual contribution and "Imagine the tsunami of retirees that are going to come up the on investments returns the fund generates. system, relying on CPP and not having anything much more to supCritics of that option, however, counter that unlike CPP, port them. It's going to be a huge cost to our social programs." PRPPs won't require employers to contribute anything. On There is growing consensus in Canada that many middle- top of that, there are concerns a large number of Canadians income workers without a workplace pension plan will face a could choose not to buy into the plan. lower standard of living in their retirement years. Some question whether people who now don't currently However, what many financial and government experts can't contribute to an RRSP would want to contribute to a volunagree on is how to solve this looming problem. tary plan. By PETER CRISCIONE AND LOUIE ROSELLA Can you afford to retire? fund How will you nt? your retireme · CPP: 90% · RRSPs: 88% b: · Part-time jo 59% · Sell home: 49% : · Win lottery 34%