Retirement Income Coalition

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Retirement Income Coalition"

Transcription

1 2005 Pre-Budget Submission STRENGTHENING THE VOLUNTARY PILLAR OF CANADA'S RETIREMENT INCOME SYSTEM SEPTEMBER 2004

2 TABLE OF CONTENTS Page Introduction 1 Unfinished Business 2 Middle Income Canadians Affected 2 Comparison in Growth of Canada's Retirement Benefits 3 Annual Pension by Years of Service 3 Annual Pension As A Percentage of Earnings 4 International Competitiveness 4 Recommendations for Completing Pension Reform Pre-Budget Submission September 2004

3 1 INTRODUCTION The Retirement Income Coalition (RIC) is a diverse coalition of national organizations, all of which have a keen interest in the health and reform of the Canadian retirement income system. The RIC was formed in 1997 with a mandate to work co-operatively with the government, to ensure a responsible and comprehensive approach is taken to any reform of Canada's retirement income system. RIC members reflect the views of plan sponsors, professional associations, business groups and seniors. These groups are working together to ensure that there is an open, consultative process to any changes to the retirement income system and that any changes are made in consideration of the objectives and context of the total retirement income system. The 1982 Green Paper, Better Pensions for Canadians (released by The Honourable Marc Lalonde and The Honourable Monique Begin) sets out three governing principles for Canada's retirement system: 1)"To guarantee a basic income for those without resources of their own." 2)"To assure fair opportunities for Canadians to provide for their retirement years." 3)"To enable Canadians to avoid a serious disruption in their standards of living upon retirement." The Green Paper's proposals were referred to the Parliamentary Task Force on Pension Reform, which conducted hearings and submitted its report to the House of Commons in December In February 1984, the government introduced its Action Plan for Pension Reform through its documents titled "Building Better Pensions for Canadians" and "Improved Tax Assistance for Retirement Saving". Both of these documents restated these three principles and used them as a basis for the action plan. These principles are as important now as they were then and are central to our recommendations for additional reform of Canada's private retirement savings and income policy. In the 1984 budget, Mr. Lalonde noted that the tax treatment of RRSPs "penalizes in particular employees of small business, farmers, fishermen, professionals and others who are selfemployed." He announced an increase in the contribution limit, from $5,500 to $10,000 for 1985, rising to $14,000 for It's remarkable that the limit set by Mr. Lalonde as fair for 1987 was $500 higher than the actual limit of $13,500 in That's because the projected increases were never implemented. Instead governments stopped treating RRSPs as a legitimate pillar of retirement savings. They were viewed as tax measures primarily benefiting the rich, and as such they were repeatedly cut back in the cause of fiscal restraint. September Pre-Budget Submission

4 2 Retirement Income Coalition UNFINISHED BUSINESS The increase from 20 to 30 per cent in the maximum foreign content allowed in RRSPs announced in Budget Plan 2000 gives Canadians the potential to improve their RRSP investment returns, better diversify and raise the value of their retirement savings portfolios. However, since that time the issue of greater diversification through increased foreign content has been virtually forgotten. The RIC views the elimination of foreign content limits altogether as being the next logical step to promote diversification, reduce risk, and to elevate the values of retirement savings investment portfolios. The RIC also welcomes the modest increases to RRSP contribution limits announced in the Budget Plan 2003 as a step in the right direction, despite being disappointed with the limited action taken by the government on the issue. Finance Minister John Manley's 2003 budget provided only a modest increase in RRSP contribution limits. The budget proposes a series of incremental increases ending with $18,000 in 2006, and indexing to the average growth in wages starting in The level for 2003 was raised from $13,500 to $14,500, to $15,500 in 2004, to $16,500 in 2005, to $18,000 in 2006, and indexed to inflation thereafter. The announced increases for RRSP contribution ceilings were a good start, but fell far short of being sufficient, fair and equitable. More must be done to help Canadians to increase their private retirement savings. Depending on one's savings pattern, a pension of 70 per cent of earnings for a full career is a commonly accepted measure of pension adequacy. This is the amount a family needs to maintain its preretirement standard of living. The 70 per cent target recognizes that expenses such as childcare, mortgage payments, contributions to the Canada/Quebec pension plans, occupational pension plans and/or RRSPs do not continue after retirement. Pension plans covering employees of the federal government and provincial governments have long recognized this principle by delivering, in conjunction with the Canada or Quebec Pension Plans, pensions equal to, or exceeding, 70 per cent of earnings to those retiring after 35 years of service. MIDDLE INCOME CANADIANS AFFECTED Many Canadians' retirement savings suffered a significant setback due to the substantial decline in the Canadian stock market. In August 2004, the S&P/TSX Composite Index was still 26% below its peak of August As a result, a multitude of middle-income taxpayers are now unable to reach the 70 per cent target. The misconception that it is the "rich" who are affected by the current maximum RRSP contribution limit persists. However, research by RIC has produced a sample list of professional and administrative positions that very clearly shows one does not have to be "rich" to be affected by the limit: TYPICAL SALARIED POSITIONS AFFECTED BY LIMIT Associate Territory Manager Plumber Area Sales Manager Chief Librarian School Administrator ConstableDetective Registered Nurse 2005 Pre-Budget Submission September 2004

5 3 Low income Canadians can hit the 70 per cent target by saving relatively modest amounts to supplement the pensions they receive from government programs. Unfortunately there are several hundred thousand Canadians who are constrained by the tax limits despite the recent improvements. When they retire, they will receive relatively little from public pension plans and they are prevented, by the tax limits, from contributing enough to their RRSPs to maintain their standard of living when they retire. Through their taxes, they pay towards programs like the Guaranteed Income Supplement and Old Age Security so that others can afford to retire in a manner that maintains their standard of living, yet they themselves are denied this opportunity. COMPARISON IN GROWTH OF CANADA'S RETIREMENT BENEFITS Maximum MP Pension (1) Maximum CPP Retirement Pension GIS/OAS Pension for Low Income Single Seniors Old Age Security Benefit RRSP Limit Contribution Limit to DC Pension Plans Defined Benefit Pension Limit (for a 35 year career) Percentage Increase $18,000 $1,900 $2,700 $1,600 $5,500 $7,000 $60,000 $102,000 $9,770 $12,255 $5,600 $15,500 $16,500 $64, % 414% 354% 250% 181% 136% 7% In 1976, defined benefit pension plans could provide a 70 per cent pension on earnings up to $85,750 - roughly equivalent to an RRSP contribution of $15,500. The maximum annual accrual of $1715 per year limited mainly high income Canadians. Since then, the accrual rate has only increased by 7%, with a further modest increase coming in Since then the accrual rate has remain virtually unchanged. The cost of living and the average wage have increased by more than 250 per cent as have the benefits paid from the CPP/QPP, Old Age Security and the Guaranteed Income Supplement. Retirement benefits are, in real terms, significantly less than they were in the 1970s. As a result, the defined pension limits today affect a wide range of middle income Canadians, as illustrated above. As an example, at General Motors of Canada Ltd., pensions for long service middle managers or professional staff are impacted by the existing defined benefit limits. The maximum pension payable from a registered pension plan was frozen for 25 years. Recent increases do little to correct the damage done by three decades of neglect. Had levels been indexed since 1976, defined benefit pension plans would now cover earnings up to $300,000 and would deliver pensions that are equivalent to RRSP contributions of about $54,000 per annum. The following two tables show that in 2004 upper middle income Canadians cannot earn a pension of 70 per cent of their final earnings regardless of their years of service. The conclusion remains, even after taking into account the increases in the limits that were announced in the Budget Plan 2003 for 2004 and September Pre-Budget Submission

6 4 Retirement Income Coalition ANNUAL PENSION BY YEARS OF SERVICE Canadians' Years of Service (Applicable in 2004) Pre-Retirement Income: Final Year $50,000 $10,000 $15,000 $20,000 $ 25,000 $ 30,000 $ 35,000 $70,000 $14,000 $21,000 $28,000 $ 35,000 $ 42,000 $ 49,000 $90,000 $18,000 $27,000 $36,000 $ 45,000 $ 54,000 $ 63,000 $110,000 $18,333 $27,500 $36,667 $ 45,833 $ 55,000 $ 64,167 $130,000 $18,333 $27,500 $36,667 $ 45,833 $ 55,000 $ 64,167 Regular MP Pension $141,000 $42,300 $63,450 $84,600 $105,750 $105,750 $105,750 ANNUAL PENSION AS A PERCENTAGE OF EARNINGS Canadians' Years of Service (Applicable in 2004) Pre-Retirement Income: Final Year $50,000 20% 30% 40% 50% 60% 70% $70,000 20% 30% 40% 50% 60% 70% $90,000 20% 30% 40% 50% 60% 70% $110,000 17% 25% 33% 42% 50% 58% $130,000 14% 21% 28% 35% 42% 49% Regular MPs Earning $141,000 30% 45% 60% 75% 75% 75% INTERNATIONAL COMPETITIVENESS Even if annual increases in contribution limits projected by the government in 1984 had been implemented, today's limits would be below those found in both the U.S. and U.K. where the retirement systems and living standards are similar to Canada's. US (2003) UK (2003) Canada (2004) Maximum Non-Income-Tested Pension from Social Security Maximum earnings fully tax-shelterable in generous defined benefit pension plan Maximum contribution to taxsheltered savings plan:- limit for individual taxpayer- reduced for member of pension plan Top marginal rate and the income level at which it is first encountered C$29,200 C$280,000 C$56,000 unreduced 38.6% C$437,000 * No limit if joined plan before # Lower amount applies for age 35 and under; higher limit applies for age 60 and over. Note: Exchange rates used in calculations: C$1.40 = U.S.$1; C$2.22 = 1 UK Pound sterling C$8,940 C$219,800* C$38,460-87,910 # reduced 40% C$77,510 C$9,770 (CPP) C$91,667 C$15,500 reduced 46.4% (Ontario) C$113, Pre-Budget Submission September 2004

7 5 In the United States, tax-qualified retirement savings plans cover earnings up to C$280,000, while in the U.K. they cover earnings up to C$219,800. Both limits are indexed. In the United States, employers can contribute up to C$56,000 per annum to tax sheltered retirement accounts for their employees. In the U.K., the corresponding limit on contributions to tax assisted retirement savings is between C$38,460 and C$87,910 depending on an employee's age. Moreover, the UK is proposing to eliminate current limits and instead applying additional annual post-retirement taxation if the present value of a pension exceeds 1.4 million pounds (i.e. C$3.1 million). That is well in excess of 3 times the defined benefit limit in Canada in the year 2005 for a person whose career spans 30 years of service. Inadequate retirement savings limits contribute to Canada's uncompetitive personal income tax regime. Upper and middle income Canadians who move to the U.S. or U.K. are able to save much larger amounts for retirement. Increasingly, internationally mobile employees are taking these factors into account in deciding where to work. Many argue that the government's cost of increasing the retirement savings limit is high, but is it? Those who are constrained by the current $15,500 RRSP contribution limit are taxed at a 30 per cent marginal rate (ignoring provincial taxes). After they retire, their RRSP withdrawals will be taxed at rates between 26 per cent and 40 per cent (once again, ignoring provincial taxes, but taking Old Age Security claw-backs into account). This means that whatever taxes the federal government might forego today by allowing these Canadians to contribute more to their RRSPs will be fully recovered, with interest, when the extra contributions are withdrawn. Not only will the government's "investment" be recovered with interest, but it will be recovered at an opportune time, when the baby boom generation retires and the pension and health related demands on the public purse are at their highest. The federal government has worked hard preparing the country for an aging population. The Canada Pension Plan has been reformed. Deficits have been eliminated. The debt has declined as a percentage of GDP. But there is another risk associated with an aging population. When 40 per cent of Canada's taxpayers are retired, who is going to pay the taxes? If we expect the tax system to generate a healthy revenue stream in 30 years, then some of tomorrow's senior citizens better have good taxable incomes or the tax burden will fall heavily on a smaller working population. As many baby boomers are in their peak earnings period, now is the time to encourage them to maximize their own retirement savings. AGE LIMIT SHOULD BE RAISED The federal Budget 1996 lowered the age at which RRSPs must be annuitized or converted to Registered Retirement Income Funds (RRIFs) from 71 to 69. This measure runs contrary to what demographic trends indicate; life expectancies, at age 70 in 1996, were almost two years longer than in At a minimum, the age limit should be restored to 71; however, given that life expectancies are rising, 73 would be a more appropriate age limit. September Pre-Budget Submission

8 6 Retirement Income Coalition RECOMMENDATIONS FOR COMPLETING PENSION REFORM The Retirement Income Coalition recommends that the next budget commit to: 1. Raising RRSP and pension contribution limits in real terms to $20,500 immediately, rising quickly thereafter until it reaches $27, dollars at which time it should be indexed to the annual inflation rate. This will enable all income earners in the 3rd tax bracket to have full and immediate access to their 18% RRSP contribution threshold. 2. Increasing the defined benefit pension limit by 64 percent (from 1,833 to 3,000), starting immediately. 3. The age at which RRSPs must be annuitized or converted to a Registered Retirement Income Fund (RRIF) should be raised from 69 to 71. RETIREMENT INCOME COALITION MEMBERSHIP Association of Canadian Pension Management (ACPM) Canadian Pension & Benefits Institute CARP, Canada's Association for the Fifty-Plus Retirement Savings Alliance Retired Teachers of Ontario Ontario Teachers Pension Plan The Canadian Real Estate Association General Motors of Canada Ltd. Investment Dealers Association of Canada Canadian Teachers Federation The Toronto Board of Trade Investment Funds Institute of Canada Ontario Municipal Employees Retirement System (OMERS) Canadian Dental Association SuccessCare Solutions Inc. Pielsticker & Associates 2005 Pre-Budget Submission September 2004

THE WAY TO BUILDING A BETTER ONTARIO 2016 Ontario Pre-Budget Submission

THE WAY TO BUILDING A BETTER ONTARIO 2016 Ontario Pre-Budget Submission THE WAY TO BUILDING A BETTER ONTARIO 2016 Ontario Pre-Budget Submission February 2016 Tel/Tél: 416.497.4110 Toll-free/Sans frais: 1.800.268.5763 Fax/Téléc: 416.496.6552 Who is Unifor Unifor is a new Canadian

More information

How Can You Reduce Your Taxes?

How Can You Reduce Your Taxes? RON GRAHAM AND ASSOCIATES LTD. 10585 111 Street NW, Edmonton, Alberta, T5M 0L7 Telephone (780) 429-6775 Facsimile (780) 424-0004 Email rgraham@rgafinancial.com How Can You Reduce Your Taxes? Tax Brackets.

More information

Canadian Retirement System

Canadian Retirement System Canadian Retirement System Instructor: Karen Chen Actuary, PBI Actuarial Consultants John 55 years old Lived in Canada his whole life Worked since age 25 Current employer offers a pension plan With current

More information

Public Consultation Package

Public Consultation Package Public Consultation Package Request for Comments Retirement Income Adequacy in Canada Yukon Finance March 2010 Whitehorse, Yukon March 2010 Message from the Premier and Minister of Finance The Yukon Government

More information

Ensuring the Ongoing

Ensuring the Ongoing Ensuring the Ongoing Strength of Canada s Retirement Income System A Submission to the Federal-Provincial Relations and Social Policy Branch Department of Finance April 30, 2010 On behalf of the Canadian

More information

Canadian Labour Congress Background Information for Individual Responses

Canadian Labour Congress Background Information for Individual Responses 1 Canadian Labour Congress Background for Individual Responses Questions from the Ministry of Finance Ontario Consulting with Ontarians on Canada s Retirement Income System How much income do you think

More information

Improving Retirement Income Coverage in Canada The ACPM Five-Point Plan

Improving Retirement Income Coverage in Canada The ACPM Five-Point Plan Improving Retirement Income Coverage in Canada Month 00, 2012 ACPM CONTACT INFORMATION Mr. Bryan Hocking Chief Executive Officer Association of Canadian Pension Management 1255 Bay Street, Suite 304 Toronto

More information

This strategy gives a person the ability to take advantage of the tax-sheltering ability of a life insurance policy.

This strategy gives a person the ability to take advantage of the tax-sheltering ability of a life insurance policy. Insuring the Future In this Newsletter: Supplementing Retirement Income Who should be looking at this strategy? The Registered Savings Problem John Jordan, CFP CERTIFIED FINANCIAL PLANNER Phone: (519)

More information

PROPOSED CHANGES TO THE CANADA PENSION PLAN

PROPOSED CHANGES TO THE CANADA PENSION PLAN PROPOSED CHANGES TO THE CANADA PENSION PLAN Proposed by Federal, Provincial and Territorial Ministers of Finance Ottawa, May 25, 2009 For further information go to the Department of Finance Canada web

More information

THE TAX-FREE SAVINGS ACCOUNT

THE TAX-FREE SAVINGS ACCOUNT THE TAX-FREE SAVINGS ACCOUNT BY READING THIS DOCUMENT, YOU WILL: Know the different features of the TFSA Master the differences between a contribution to an RRSP or a TFSA Identify target clienteles. Last

More information

Province of Nova Scotia Department of Finance MECHANISMS FOR ENHANCING THE RETIREMENT INCOME SYSTEM IN CANADA

Province of Nova Scotia Department of Finance MECHANISMS FOR ENHANCING THE RETIREMENT INCOME SYSTEM IN CANADA Province of Nova Scotia Department of Finance MECHANISMS FOR ENHANCING THE RETIREMENT INCOME SYSTEM IN CANADA The Government of Nova Scotia is working with other provinces and territories, and the Government

More information

Retirement Planning Your Retirement Transition Plan

Retirement Planning Your Retirement Transition Plan Retirement Planning Your Retirement Transition Plan Planning Your Retirement Picture Your Perfect Retirement What do you want your retirement to look like? The definition of retirement has changed. Today,

More information

Canada s Retirement Security Crisis. National Union of Public and General Employees (NUPGE) Ottawa, Canada: January 2012

Canada s Retirement Security Crisis. National Union of Public and General Employees (NUPGE) Ottawa, Canada: January 2012 Canada s Retirement Security Crisis National Union of Public and General Employees (NUPGE) Ottawa, Canada: January 2012 MYTH1 Most public sector employees have a gold-plated pension. No, in fact the far

More information

Better finances, better lives. Five-Year Tax Reduction Plan. February 28, 2000. Department of Finance Canada. Ministère des Finances Canada

Better finances, better lives. Five-Year Tax Reduction Plan. February 28, 2000. Department of Finance Canada. Ministère des Finances Canada Better finances, better lives Five-Year Tax Reduction Plan February 28, 2000 Department of Finance Canada Ministère des Finances Canada Her Majesty the Queen in Right of Canada (2000) All rights reserved

More information

TAX, RETIREMENT & ESTATE PLANNING SERVICES. Clawback calculator user guide

TAX, RETIREMENT & ESTATE PLANNING SERVICES. Clawback calculator user guide TAX, RETIREMENT & ESTATE PLANNING SERVICES Clawback calculator user guide Table of contents Introduction... 3 Fully taxable and investment income Fully taxable income... 4 Investment income... 5 Deductions

More information

Preparing for the retirement you want

Preparing for the retirement you want Preparing for the retirement you want You deserve an enjoyable retirement Retirement is one of life s most significant events. It marks the transition to a new and very wonderful stage of life. You will

More information

PENTEGRA RETIREMENT SERVICES QUALIFIED PLAN DESIGNING THE RIGHT RETIREMENT PLAN FOR YOUR ORGANIZATION

PENTEGRA RETIREMENT SERVICES QUALIFIED PLAN DESIGNING THE RIGHT RETIREMENT PLAN FOR YOUR ORGANIZATION PENTEGRA RETIREMENT SERVICES QUALIFIED PLAN DESIGNING THE RIGHT RETIREMENT PLAN FOR YOUR ORGANIZATION TABLE OF CONTENTS Your benefit philosophy The objective approach The competitive approach Types of

More information

Toll Free Local Fax KEY YEAR END TAXATION ISSUES:

Toll Free Local Fax KEY YEAR END TAXATION ISSUES: Toll Free 1-866-953-4769 Local 204-953-4769 Fax 204-953-4762 www.knowledgebureau.com KEY YEAR END TAXATION ISSUES: Changes to Tax Brackets, Rates Family Planning with Credits Pensioners Investors Other

More information

John and Jane Client June 2015

John and Jane Client June 2015 John and Jane Client June 2015 Table Of Contents About This Plan 2 Assumptions 3 About You 4 Your Goals & Objectives 5 Opportunities, Concerns & Notes 6 Net Worth Statement 7 Sources of Income 8 Lifestyle

More information

Canada Pension Plan Overview Citizens for Public Justice April 2012

Canada Pension Plan Overview Citizens for Public Justice April 2012 Canada Pension Plan Overview Citizens for Public Justice April 2012 Chris Roberts Canadian Labour Congress Three Pillars of Canada s Retirement Income System Basic pension Old Age Security and Guaranteed

More information

pensions backgrounder #4

pensions backgrounder #4 pensions backgrounder #4 Private Retirement Savings Part 4 in a Series The full series of pension backgrounders are contained in the National Union s Pensions Manual, Fourth Edition available from the

More information

SUSTAINING PROSPERITY FOR FUTURE GENERATIONS NLEC POSITION ON 2013 PROVINCIAL BUDGET PRIORITIES

SUSTAINING PROSPERITY FOR FUTURE GENERATIONS NLEC POSITION ON 2013 PROVINCIAL BUDGET PRIORITIES SUSTAINING PROSPERITY FOR FUTURE GENERATIONS Approved by the NLEC Board of Directors Jan 16 th, 2013 1 SUSTAINING OUR PROSPERITY FOR FUTURE GENERATIONS INTRODUCTION The Newfoundland and Labrador Employers

More information

Election 2015: How proposed tax measures could affect you and your business

Election 2015: How proposed tax measures could affect you and your business Election 2015: How proposed tax measures could affect you and your business October 2015 As the federal election draws closer, the political parties are promoting their platforms which encompass a wide

More information

Planning for Retirement: Are Canadians Saving Enough?

Planning for Retirement: Are Canadians Saving Enough? June 2007 Planning for Retirement: Are Canadians Saving Enough? Document 207055 This study was carried out by the Department of Statistics and Actuarial Science at the University of Waterloo, under the

More information

5. Defined Benefit and Defined Contribution Plans: Understanding the Differences

5. Defined Benefit and Defined Contribution Plans: Understanding the Differences 5. Defined Benefit and Defined Contribution Plans: Understanding the Differences Introduction Both defined benefit and defined contribution pension plans offer various advantages to employers and employees.

More information

Your guide to the Tax-Free Savings Account

Your guide to the Tax-Free Savings Account INVESTMENTS Tax-Free Savings Account Your guide to the Tax-Free Savings Account An important part of any financial plan is savings. Short-term goals such as a vacation or long-term goals like retirement

More information

Your guide to the Tax-Free Savings Account

Your guide to the Tax-Free Savings Account INVESTMENTS Tax-Free Savings Account Your guide to the Tax-Free Savings Account An important part of any financial plan is savings. Short-term goals such as a vacation or long-term goals like retirement

More information

Taxation of Retirement Income

Taxation of Retirement Income Taxation of Retirement Income TAXATION OF RETIREMENT INCOME As our population ages, the need to fund a comfortable retirement becomes a priority for more and more Canadians. Many Canadians planning for

More information

Your Guide to Retirement Income Planning

Your Guide to Retirement Income Planning Your Guide to Retirement Income Planning Your Guide to Retirement Income Planning 3 Your retirement income plan How to create secure income in retirement Your retirement will be as unique as you are. Travel,

More information

Planning for Retirement

Planning for Retirement Planning for Retirement PLANNING FOR RETIREMENT Retirement. It s a period of one s life that most people look forward to, anticipating more time to spend with family and friends, and a welcome end to the

More information

NexGen Tax Cases The Corporate Tax Deferral and Income Program

NexGen Tax Cases The Corporate Tax Deferral and Income Program 2014 NexGen Tax Cases The Corporate Tax Deferral and Income Program Business owners and managers in Canada who have incorporated have two major income tax advantages available to them over those who have

More information

Personal Financial Plan

Personal Financial Plan Personal Financial Plan Pete and Carrie Mitchell 918 Richmond Street Toronto, Ontario M5N 1V5 Disclaimer This document has been prepared to assist in the analysis of your current financial position, thereby

More information

April 8,2005 JEFFREY KUPFER, EXECUTIVE DIRECTOR PRESIDENT S ADVISORY PANEL ON FEDERAL TAX REFORM

April 8,2005 JEFFREY KUPFER, EXECUTIVE DIRECTOR PRESIDENT S ADVISORY PANEL ON FEDERAL TAX REFORM DEPARTMENT OF THE TREASURY WASHINGTON, D.C. 20220 April 8,2005 MEMORANDUM FOR FROM SUBJECT JEFFREY KUPFER, EXECUTIVE DIRECTOR PRESIDENT S ADVISORY PANEL ON FEDERAL TAX REFORM ROBERT CAmoLi& DEPUTY ASSISTANT

More information

YOUR IAM PENSION FUND. Your. to Guide. Retirement Planning

YOUR IAM PENSION FUND. Your. to Guide. Retirement Planning YOUR IAM PENSION FUND Your to Guide Retirement Planning II Retirement Planning Guide Contents What s the big deal about retirement planning?...1 How much money will I need? Where will the money come from?

More information

Preparing for Retirement. A Guide for Employees. Human Resources

Preparing for Retirement. A Guide for Employees. Human Resources Preparing for Retirement A Guide for Employees 010 Human Resources Contents Introduction... 3 Canada Pension Plan Retirement Benefits... 4 Old Age Security... 6 Employment Insurance Benefits at Retirement...

More information

Canadian Medical Association submission to Finance Canada

Canadian Medical Association submission to Finance Canada Canadian Medical Association submission to Finance Canada Response to the Consultation Paper Pension Innovation for Canadians: The Target Benefit Plan A healthy population and a vibrant medical profession

More information

Better finances, better lives. Tax Relief for Canadians

Better finances, better lives. Tax Relief for Canadians Better finances, better lives Tax Relief for Canadians February 28, 2000 Today we are setting out a five-year tax plan so that individuals, families, small businesses and others will know for certain that

More information

CFUW Ontario Council Response To the. Consultations on the Ontario Retirement Pension Plan

CFUW Ontario Council Response To the. Consultations on the Ontario Retirement Pension Plan CFUW Ontario Council Response To the Consultations on the Ontario Retirement Pension Plan February 2015 Submitted by Brenda Robertson President, Ontario Council Canadian Federation of University Women

More information

A superannuation system that is sustainable, flexible and has integrity

A superannuation system that is sustainable, flexible and has integrity SUPERANNUATION FACT SHEET 1 A superannuation system that is sustainable, flexible and has integrity In the 216-17 Budget, the Government announced a package of reforms designed to improve the sustainability,

More information

4Needs your WHAT S AFTER? ELIMINATE DEBT THE FEWER DEBTS, THE BETTER! Wills and Trusts; Reviewing These Are a Must

4Needs your WHAT S AFTER? ELIMINATE DEBT THE FEWER DEBTS, THE BETTER! Wills and Trusts; Reviewing These Are a Must YOUR SOURCE FOR RETIREMENT PLANNING AND POSSIBILITIES e > N xt WHAT S AFTER? But first, some things to think about before 4Needs your retirement income should meet ELIMINATE DEBT THE FEWER DEBTS, THE BETTER!

More information

Pension Sustainability

Pension Sustainability Pension Sustainability Making public sector pensions more secure and affordable gov.pe.ca/pensionplans Minister s message Prince Edward Island s two large public sector pension plans, the Civil Service

More information

Retirement Planning. Rich Widdifield, CFP Financial Planner Assante Capital Management Ltd.

Retirement Planning. Rich Widdifield, CFP Financial Planner Assante Capital Management Ltd. Retirement Planning Rich Widdifield, CFP Financial Planner Assante Capital Management Ltd. Pension Government Benefits Estate Planning Retirement Planning Tax Planning Risk Management Cash Flow Management

More information

Creating a Fairer Pension System in Canada: Ideas to Make Canada's Federal Government Employee Pension System Fair for Taxpayers and Employees

Creating a Fairer Pension System in Canada: Ideas to Make Canada's Federal Government Employee Pension System Fair for Taxpayers and Employees Pension Policy Creating a Fairer Pension System in Canada: Ideas to Make Canada's Federal Government Employee Pension System Fair for Taxpayers and Employees By William (Bill) Tufts and Lee Fairbanks KEY

More information

ONTARIO RETIREMENT PENSION PLAN

ONTARIO RETIREMENT PENSION PLAN THE ONTARIO RETIREMENT PENSION PLAN DISCUSSING A MADE-IN-ONTARIO SOLUTION ASSOCIATE MINISTER S MESSAGE Ask a child what they want to be when they grow up and they ll tell you. A doctor. An astronaut.

More information

A PLAN FOR A DEBT-FREE ALBERTA

A PLAN FOR A DEBT-FREE ALBERTA A PLAN FOR A DEBT-FREE ALBERTA Table of Contents Step 1 - Eliminating the Annual Deficit... 139 Step 2 - Eliminating the Net Debt... 139 Step 3 - Creating a Debt-Free Alberta... 142 Repaying Accumulated

More information

Introducing. Tax-Free Savings Accounts

Introducing. Tax-Free Savings Accounts Introducing Tax-Free Savings Accounts Tax-Free Savings Accounts A new way to save Tax-free savings accounts were introduced by the federal government in the 2008 budget as an incentive for Canadians to

More information

The Great Divide: Income splitting strategies can lower your family s taxes by Jamie Golombek

The Great Divide: Income splitting strategies can lower your family s taxes by Jamie Golombek March 2015 The Great Divide: Income splitting strategies can lower your family s taxes by Jamie Golombek While the new Family Tax Cut credit, which provides a form of income splitting, has been getting

More information

Corporate Report. Recommendation That Council receive the report Employee Pension and Sick Leave Benefits for information purposes.

Corporate Report. Recommendation That Council receive the report Employee Pension and Sick Leave Benefits for information purposes. CITY or ST. CATHARINE Corporate Report Report from Office of the Chief Administrative Officer, Administration Date of Report: April 28, 2015 Date of Meeting: May 25, 2015 Report Number: CAO-136-2015 File:

More information

The Cypriot Pension System: Adequacy and Sustainability

The Cypriot Pension System: Adequacy and Sustainability Cyprus Economic Policy Review, Vol. 6, No. 2, pp. 49-58 (2012) 1450-4561 49 The Cypriot Pension System: Adequacy and Sustainability Philippos Mannaris Aon Hewitt Abstract The fundamental objective of pension

More information

>Most investors spend the majority of their time thinking and planning

>Most investors spend the majority of their time thinking and planning Generating Retirement Income using a Systematic Withdrawal Plan SPECIAL REPORT >Most investors spend the majority of their time thinking and planning around how best to save for retirement. But once you

More information

Retirement Compensation Arrangement

Retirement Compensation Arrangement tax efficient retirement planning tool business GUIDELINES Retirement Compensation Arrangement Supplement Retirement Income while providing Tax Deductible contributions RRSPs and Pension Plans provide

More information

TRANSFERS FROM A registered pension plan to a. Sun Life. nnuity PAYOUT ANNUITY ADVISOR GUIDE. Life s brighter under the sun

TRANSFERS FROM A registered pension plan to a. Sun Life. nnuity PAYOUT ANNUITY ADVISOR GUIDE. Life s brighter under the sun PP TRANSFERS FROM A registered pension plan to a nnuity Sun Life PAYOUT ANNUITY ADVISOR GUIDE Life s brighter under the sun A guide to understanding transfers from a registered pension plan to a life annuity

More information

BEING FINANCIALLY PREPARED FOR RETIREMENT The Scary Facts! $1.00 item in 1972, costs $3.78 today At the average rate of inflation, the price you pay for an item today will be double in 20 years almost

More information

THE TAX-FREE SAVINGS ACCOUNT

THE TAX-FREE SAVINGS ACCOUNT THE TAX-FREE SAVINGS ACCOUNT The 2008 federal budget introduced the Tax-Free Savings Account (TFSA) for individuals beginning in 2009. The TFSA allows you to set money aside without paying tax on the income

More information

2015 Pre-Budget Submission: Unlocking Assets for Community Benefit

2015 Pre-Budget Submission: Unlocking Assets for Community Benefit February 9, 2015 The Honourable Charles Sousa Ministry of Finance 7 th Floor, Frost Building South 7 Queen s Park Cres., Toronto, ON M7A 1Y7 Dear Minister Sousa, 2015 Pre-Budget Submission: Unlocking Assets

More information

ONTARIO HOME BUILDERS ASSOCIATION SUBMISSION ON THE ONTARIO RETIREMENT PENSION PLAN ---FEBRUARY 2015---

ONTARIO HOME BUILDERS ASSOCIATION SUBMISSION ON THE ONTARIO RETIREMENT PENSION PLAN ---FEBRUARY 2015--- ONTARIO HOME BUILDERS ASSOCIATION SUBMISSION ON THE ONTARIO RETIREMENT PENSION PLAN ---FEBRUARY 2015--- ABOUT OHBA The Ontario Home Builders Association (OHBA) is the voice of the new housing, land development

More information

IMPLEMENTING THE RESTRICTION OF PENSIONS TAX RELIEF: NAPF SUBMISSION TO THE HMT/HMRC CONSULTATION

IMPLEMENTING THE RESTRICTION OF PENSIONS TAX RELIEF: NAPF SUBMISSION TO THE HMT/HMRC CONSULTATION IMPLEMENTING THE RESTRICTION OF PENSIONS TAX RELIEF: NAPF SUBMISSION TO THE HMT/HMRC CONSULTATION Executive Summary The NAPF welcomes the Coalition Government s decision to adopt a tax regime based principally

More information

Easy Guide to Retirement Income Options

Easy Guide to Retirement Income Options Easy Guide to Retirement Income Options Contents PAGE 1: Your retirement income choices... 2 1. Convert your RSP into an annuity... 2 a. Life Annuity... 2 b. Term Certain Annuity to Age 90... 2 2. Convert

More information

Pension Income Splitting

Pension Income Splitting Pension Income Splitting And Other Recently Announced Changes for Retirees New tax rules were recently introduced by the federal government that will allow senior couples to split their pension incomes

More information

TO HELP YOU MAKE THE MOST OF YOUR RETIREMENT DAYS

TO HELP YOU MAKE THE MOST OF YOUR RETIREMENT DAYS RETIREMENT GUIDE TO HELP YOU MAKE THE MOST OF YOUR RETIREMENT DAYS Whether it s a long-term project or a dream that s about to come true, you likely have no shortage of ideas to fill up this exciting period

More information

Australia. Qualifying conditions. Benefit calculation. Defined contribution. Key indicators: Australia. Australia: Pension system in 2014

Australia. Qualifying conditions. Benefit calculation. Defined contribution. Key indicators: Australia. Australia: Pension system in 2014 11. PENSIONS AT A GLANCE 215: COUNTRY PROFILES AUSTRALIA Australia Australia: Pension system in 214 Australia s retirement income system has three components: a means-tested Age Pension funded through

More information

Financial Services Commission of Ontario Commission des services financiers de l Ontario

Financial Services Commission of Ontario Commission des services financiers de l Ontario Financial Services Commission of Ontario Commission des services financiers de l Ontario SECTION: Life Income Fund/Locked-In Retirement Account INDEX NO.: L050-500 TITLE: LIF Explanation and Tables for

More information

Trends in University Finances in the New Millennium, 2000/01 2012/13

Trends in University Finances in the New Millennium, 2000/01 2012/13 Spring 2015 Trends in University Finances in the New Millennium, 2000/01 2012/13 Since the turn of the 21st century, universities in Canada have undergone significant changes. Student enrolment has exploded.

More information

The Individual Pension Plan. An opportunity to have your cake and eat it too!

The Individual Pension Plan. An opportunity to have your cake and eat it too! Special Report An introduction to: The Individual Pension Plan An opportunity to have your cake and eat it too! Gerard Hass, CA, CFP, CFA Portfolio Manager Raymond James Ltd. 1 What is an Individual Pension

More information

Your contributory period ends at the earliest of the following:

Your contributory period ends at the earliest of the following: Canada Pension Plan and Old Age Security A. CPP Overview Canada Pension Plan is a contributory, earnings-related insurance program. This means that you must have contributed to the program in order to

More information

TAX-FREE SAVINGS ACCOUNT (TFSA)

TAX-FREE SAVINGS ACCOUNT (TFSA) TAX-FREE SAVINGS ACCOUNT () A practical addition to your client s savings portfolio Advisor s document Investment THE TAX-FREE SAVINGS ACCOUNT () The Tax-Free Savings Account () is probably the single

More information

Topics. AMA Private Health Insurance Comparison 2016 Budget Breakdown Top Ten Tax Tips for 2016. AMA Private Health Insurance Comparison

Topics. AMA Private Health Insurance Comparison 2016 Budget Breakdown Top Ten Tax Tips for 2016. AMA Private Health Insurance Comparison Prime Time Advisory News Update May 2016 Newsletter Topics AMA Private Health Insurance Comparison 2016 Budget Breakdown Top Ten Tax Tips for 2016 AMA Private Health Insurance Comparison Recent price increases

More information

CRITICAL ELEMENTS OF THE CURRENT TAX INCENTIVE STRUCTURE

CRITICAL ELEMENTS OF THE CURRENT TAX INCENTIVE STRUCTURE October 8, 2012 The U.S. retirement savings system encourages individuals to save for retirement by providing income tax exclusions or deductions for contributions to employer-sponsored defined contribution

More information

Canada. Ottawa, February 10, 1993 92-007. Immediate release. Notes for an address

Canada. Ottawa, February 10, 1993 92-007. Immediate release. Notes for an address Immediate release Ottawa, February 10, 1993 92-007 Notes for an address by the Honourable Don Mazankowski Minister of Finance to the 50th annual conference of the Canadian Home Builders Association Toronto,

More information

THE TAXATION OF RETIREMENT SAVINGS IN CANADA

THE TAXATION OF RETIREMENT SAVINGS IN CANADA THE TAXATION OF RETIREMENT SAVINGS IN CANADA Laurence E. Coward, Canada 1 INTRODUCTION Retirement income for the elderly is provided through a combination of state pensions, employment pension plans and

More information

Clients want to know: How can I keep more of my retirement income?

Clients want to know: How can I keep more of my retirement income? Clients want to know: How can I keep more of my retirement income? After reading this, you should understand: The strategies that enable pensioners to pay less tax Regardless of the source of retirement

More information

PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES ICELAND

PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES ICELAND PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES Online Country Profiles, including personal income tax and social security contributions ICELAND Iceland: pension system in 2008 The

More information

Strengthening the Canada Pension Plan: Take it to the public

Strengthening the Canada Pension Plan: Take it to the public Strengthening the Canada Pension Plan: Take it to the public by Ken Battle, Sherri Torjman and Michael Mendelson November 2013 Strengthening the Canada Pension Plan: Take it to the public by Ken Battle,

More information

99 Metcalfe Street, Suite 1202 99, rue Metcalfe, bureau 1202 Ottawa, Ontario K1P 6L7 Ottawa (Ontario) K1P 6L7. June 23, 2014

99 Metcalfe Street, Suite 1202 99, rue Metcalfe, bureau 1202 Ottawa, Ontario K1P 6L7 Ottawa (Ontario) K1P 6L7. June 23, 2014 99 Metcalfe Street, Suite 1202 99, rue Metcalfe, bureau 1202 Ottawa, Ontario K1P 6L7 Ottawa (Ontario) K1P 6L7 June 23, 2014 Minister Kevin Sorenson Minister of State (Finance) Department of Finance Canada

More information

PENSION INNOVATION FOR CANADIANS: THE TARGET BENEFIT PENSION PLAN

PENSION INNOVATION FOR CANADIANS: THE TARGET BENEFIT PENSION PLAN PENSION INNOVATION FOR CANADIANS: THE TARGET BENEFIT PENSION PLAN SUBMISSION TO THE DEPARTMENT OF FINANCE, CANADA, FROM THE CONGRESS OF UNION RETIREES OF CANADA, JUNE 23, 2014. The Congress of Union Retirees

More information

Reuter Benefits Group Plan Member Newsletter September 2009

Reuter Benefits Group Plan Member Newsletter September 2009 Reuter Benefits Group Plan Member Newsletter September 2009 Accessing Your Retirement Savings As you approach retirement, you will need to turn your Pension and RRSP, as well as any nonregistered savings,

More information

Salary vs. dividends for business owners

Salary vs. dividends for business owners Salary vs. dividends for business owners One of the most recurring questions business owners ask is - should they take salary or dividend income from their business? Some accountants suggest a bonus-down

More information

Tax Planning Strategies

Tax Planning Strategies Chapter 3 Taxes in Your Financial Plan 95 Tax Planning Strategies For people to pay their fair share of taxes no more, no less they should practice tax avoidance, the use of legitimate methods to reduce

More information

e-brief The Piggy Bank Index: Matching Canadians Saving Rates to Their Retirement Dreams

e-brief The Piggy Bank Index: Matching Canadians Saving Rates to Their Retirement Dreams e-brief March 1, 2010 PENSION PAPERS I N D E P E N D E N T R E A S O N E D R E L E V A N T The Piggy Bank Index: Matching Canadians Saving s to Their Dreams By David A. Dodge, Alexandre Laurin and Colin

More information

The Employee Benefits Landscape in Canada

The Employee Benefits Landscape in Canada The Employee Benefits Landscape in Canada Canadians are living longer and facing increased responsibility to save for their retirement. Because life expectancies are on the rise, retirement savings will

More information

Can We Afford Social Security When Baby Boomers Retire?

Can We Afford Social Security When Baby Boomers Retire? May 2006 No. 22 Can We Afford Social Security When Baby Boomers Retire? by Virginia P. Reno and Joni Lavery How affordable are Social Security cash benefits projected to be when baby boomers retire? This

More information

TIME FOR ACTION. CPP Expansion: A critical part of the solution. Prepared by the Pensions Committee FEI Canada Policy Forum May 1, 2014

TIME FOR ACTION. CPP Expansion: A critical part of the solution. Prepared by the Pensions Committee FEI Canada Policy Forum May 1, 2014 TIME FOR ACTION CPP Expansion: A critical part of the solution Prepared by the Pensions Committee FEI Canada Policy Forum May 1, 2014 Debate has intensified on how best to help Canadians plan for retirement

More information

Early Retirement Strategies

Early Retirement Strategies If you or a member of your family is facing a permanent lay-off, voluntary early retirement or forced early retirement, there are many important decisions to be made decisions that can have a significant

More information

The Canadian Retirement Income Guide 2014 Edition. Maximizing your retirement income while minimizing your taxes

The Canadian Retirement Income Guide 2014 Edition. Maximizing your retirement income while minimizing your taxes The Canadian Retirement Income Guide 2014 Edition Maximizing your retirement income while minimizing your taxes Introduction When you retire, not only does your daily routine change, but your pay cheque

More information

Ontario Retirement Pension Plan Proposal MEPCO DISCUSSION PAPER

Ontario Retirement Pension Plan Proposal MEPCO DISCUSSION PAPER Ontario Retirement Pension Plan Proposal MEPCO DISCUSSION PAPER JUNE 17, 2015 1 Ontario s Registered Pension Plan Proposal Background: In the 2014 Provincial Budget, the Ontario Government announced that

More information

Ontario Trends in Occupational Defined Benefit and Defined Contribution Pension Coverage

Ontario Trends in Occupational Defined Benefit and Defined Contribution Pension Coverage Ontario Trends in Occupational Defined Benefit and Defined Contribution Pension Coverage richard@shillington.ca www.shillington.ca Informetrica Limited Ontario Trends in Occupational Defined Benefit and

More information

RETIREMENT INCOME CRISIS: INEVITABLE OR AVOIDABLE? THE ECONOMIC REALITY

RETIREMENT INCOME CRISIS: INEVITABLE OR AVOIDABLE? THE ECONOMIC REALITY RETIREMENT INCOME CRISIS: INEVITABLE OR AVOIDABLE? THE ECONOMIC REALITY A MESSAGE FROM HOOPP PRESIDENT & CEO, JIM KEOHANE March 17, 2014 The following White Paper, entitled Retirement Income Crisis: Inevitable

More information

It's 2016 Do You Know What Your Tax Rate Is?

It's 2016 Do You Know What Your Tax Rate Is? It's 2016 Do You Know What Your Tax Rate Is? Jamie Golombek Managing Director, Tax & Estate Planning, CIBC Wealth Strategies Group April 2016 There s been much discussion about tax rates this year, with

More information

UPDATE ON FISCAL ARRANGEMENTS

UPDATE ON FISCAL ARRANGEMENTS Budget Paper D UPDATE ON FISCAL ARRANGEMENTS Available in alternate formats upon request. Update on Fiscal Arrangements CONTENTS INTRODUCTION... 1 CURRENT TRANSFER ARRANGEMENTS... 1 Major Transfers to

More information

Invest. Tax-Free (It will make you smile) Tax-Free Savings Account

Invest. Tax-Free (It will make you smile) Tax-Free Savings Account Invest. Tax-Free (It will make you smile) Tax-Free Savings Account A Saving & Investing Revolution The Tax-Free Savings Account (TFSA) is considered to be the most important personal savings plan introduced

More information

The Canadian Retirement Savings Market, 2012. Market Trends and Future Prospects for Registered Retirement Savings Plans

The Canadian Retirement Savings Market, 2012. Market Trends and Future Prospects for Registered Retirement Savings Plans The Canadian Retirement Savings Market, 2012 Market Trends and Future Prospects for Registered Retirement Savings Plans Topics to be Covered Include: Market Size & Growth Market Shares by Sector Market

More information

Income Tax Personal Allowance. The impact of changes on living standards

Income Tax Personal Allowance. The impact of changes on living standards Income Tax Personal Allowance The impact of changes on living standards Introduction This paper examines income tax personal allowance and the impact of changes in the allowance on living standards. All

More information

Submission to Treasury Laws Amendment (Income Tax Relief) Bill 2016

Submission to Treasury Laws Amendment (Income Tax Relief) Bill 2016 Submission to Treasury Laws Amendment (Income Tax Relief) Bill 2016 SEPTEMBER 2016 Business Council of Australia September 2016 1 Contents Business Council of Australia supports efforts to curtail bracket

More information

Maximizing GIS. A background paper on retirement financial planning for Canadians with very low incomes

Maximizing GIS. A background paper on retirement financial planning for Canadians with very low incomes Maximizing GIS A background paper on retirement financial planning for Canadians with very low incomes a Contents Contents Purpose of this paper 3 Summary of GIS eligibility criteria and advice for low-income

More information

Little known facts about the Canada/Quebec Pension Plan (cpp/qpp)

Little known facts about the Canada/Quebec Pension Plan (cpp/qpp) Little known facts about the Canada/Quebec Pension Plan (cpp/qpp) TAX MANAGED STRATEGY 8 For Canadians at or nearing retirement, the Canada/Quebec Pension Plan (CPP/QPP) remains a bit of a mystery. Many

More information

PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES UNITED KINGDOM

PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES UNITED KINGDOM PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES Online Country Profiles, including personal income tax and social security contributions UNITED KINGDOM United Kingdom: pension system

More information

The Economists Voice

The Economists Voice The Economists Voice Volume 2, Issue 1 2005 Article 8 A Special Issue on Social Security Saving Social Security: The Diamond-Orszag Plan Peter A. Diamond Peter R. Orszag Summary Social Security is one

More information

flow-through limited partnerships: tax planning

flow-through limited partnerships: tax planning flow-through limited partnerships: tax planning A guide for investors and investment professionals 2 introduction 2 about flow-through shares 3 about flow-through limited partnerships 4 about mutual fund

More information

TAXES: BUDGETING MADE EASY:

TAXES: BUDGETING MADE EASY: TAXES: BUDGETING MADE EASY: WHAT YOU NEED TO KNOW SAVE MONEY, SOLVE PROBLEMS A free publication provided by Consolidated Credit Counseling Services of Canada, Inc., This complimentary a registered publication

More information

Designations on RRSPs, RRIFs, and TFSAs

Designations on RRSPs, RRIFs, and TFSAs Member RETIreMENT SERVICES Designations on RRSPs, RRIFs, and TFSAs Ensuring Your Objectives With Designations on RRSPs, RRIFs & TFSAs Liability for Income Tax on RRSP or RRIF The estate is required to

More information