It’s a contrarian view to say the least, but a veteran advisor says the government is doing right in pushing on with the controversial pension plan
News this week that an Ontario nursing care provider is threatening to dump its employer obligation under ORPP on its employees is giving advisors one more reason to reject the Ontario government’s initiative to increase retirement savings in the province.
Many advisors don’t like it because they consider it a waste of money by a province that isn’t known for its thriftiness or its ability to stick to a budget. In other words it’s bad policy.
But not everyone sees it that way. Some see the move as vital to the future health of Ontario retirees.
“I’m actually very much in favour of mechanisms that can help to make sure that people have better safety nets in retirement. The challenge, of course, is that people tend not to save enough, as shown in research data from Statistics Canada and other sources” Rapport Credit Union financial planner John Kehoe told WP. “I know a lot of advisors argue in favour of the pooled retirement pension plan. The problem is that it’s just another voluntary option and the research says many people don’t use voluntary options adequately. I’ve never seen the value of it.”
“I’m in favour of ORPP – at least in principle” said Kehoe.
Kehoe sees ORPP as the only real step forward for Ontarians given that the enhancement of CPP is likely many years away from happening if at all.
“I was originally in favour of enhancing CPP,” said Kehoe. “Obviously that wasn’t going to happen under the previous government. The problem with revisiting that now [CPP] is that even with the federal government in favour of doing so, two thirds of the provinces have to sign off. I don’t know if practically the CPP can be enhanced.”
Advisors have had plenty of opportunity to ratchet up the savings of clients and while statistics show Canadians with advisors have far more investable assets than those not using an advisor, researchers have generally found that we all do a poor job saving.
And for those who believe that the Ontario government has no business meddling in the retirement plans of its taxpayers, Kehoe sees things a little differently.
“This argument that people should be left entirely to their own devices doesn’t hold water because people already are left to make this decision on their own; they have been all along and many don’t take action,” said Kehoe. “If they don’t do it, they’re going suffer in retirement as a result, so we should remember an important philosophy in Canada and in most social democracies – that safety nets are good for everyone.”
Think Tommy Douglas.
Many advisors don’t like it because they consider it a waste of money by a province that isn’t known for its thriftiness or its ability to stick to a budget. In other words it’s bad policy.
But not everyone sees it that way. Some see the move as vital to the future health of Ontario retirees.
“I’m actually very much in favour of mechanisms that can help to make sure that people have better safety nets in retirement. The challenge, of course, is that people tend not to save enough, as shown in research data from Statistics Canada and other sources” Rapport Credit Union financial planner John Kehoe told WP. “I know a lot of advisors argue in favour of the pooled retirement pension plan. The problem is that it’s just another voluntary option and the research says many people don’t use voluntary options adequately. I’ve never seen the value of it.”
“I’m in favour of ORPP – at least in principle” said Kehoe.
Kehoe sees ORPP as the only real step forward for Ontarians given that the enhancement of CPP is likely many years away from happening if at all.
“I was originally in favour of enhancing CPP,” said Kehoe. “Obviously that wasn’t going to happen under the previous government. The problem with revisiting that now [CPP] is that even with the federal government in favour of doing so, two thirds of the provinces have to sign off. I don’t know if practically the CPP can be enhanced.”
Advisors have had plenty of opportunity to ratchet up the savings of clients and while statistics show Canadians with advisors have far more investable assets than those not using an advisor, researchers have generally found that we all do a poor job saving.
And for those who believe that the Ontario government has no business meddling in the retirement plans of its taxpayers, Kehoe sees things a little differently.
“This argument that people should be left entirely to their own devices doesn’t hold water because people already are left to make this decision on their own; they have been all along and many don’t take action,” said Kehoe. “If they don’t do it, they’re going suffer in retirement as a result, so we should remember an important philosophy in Canada and in most social democracies – that safety nets are good for everyone.”
Think Tommy Douglas.
