SENIORS IN CRISIS: CANADA PENSION PLAN CRISIS

1. SENIORS IN CRISIS:CANADA PENSION PLAN CRISIS HUGS November 30,2009

2. AGENDA • What is CARP? • Who is Dennis Peroni? • Poverty is Making us SICK! • Seniors • Canada’s Retirement Income System • The Need for Change • Summary • Questions

3. History of CARP • Began operation in 1984 under guidance of Lillian and Murray Morgenthau (Founders retired in 2008) • Membership has grown to approx. 350,000 – largest association of its kind in Canada • Receives no operating funding from any level of government • Is non-partisan, not-for-profit organization • Maintains arms-length from industry groups • In December, 2008, Moses Znaimer, became Executive Director of CARP (Oct. 2008 became President) • New Vision of Aging • Stronger Advocacy—Health, Finances, Rights • Objective to achieve 1 million members (March to a Million) • Commitment to build spirit of community

4. CARP—A New Vision of Aging for Canada The ABCs of CARP • Advocacy. A national non-profit, non-partisan, association that is an advocate for the interests and rights of Canadians as we age • Benefits. The value-adds in products and services with membership in CARP • Community. Building a sense of community and social impact through common voice and common cause. Chapters and alliances with other organizations

5. Advocacy • CARP Advocacy is built on three major planks: • Health, Finance and Personal Rights • National Pharmacare Program& Caregivers Strategy • Retirement income security. Pension reform (universal pension) • Fight mandatory retirement, ageism in workplace & health care

6. Building the Member Benefits portfolio • Must cover the key categories that reflect what members want / need: • Health • Money • Travel • Home • Leisure / entertainment / lifestyle

7. Confirmed Still being negotiated

8. Collaboration & Building Alliances • Where there is common cause we encourage Chapters to work with and build relations with other community and service groups. CNIB, Lions, Exploritas, Probus, Rotary, Royal Canadian Legions, YM&YWCA, Golf Clubs, Curling clubs, Businesses, etc.

9. Dennis Peroni CA, CSA HBComm, Laurentian U. 1979 CA 1982 CSC 1995 Insurance 1998 CSA 2004

10. Poverty as a cause of Illness Doctors Point to Poverty as Major Cause of Illness The report, "Why poverty makes us sick," authored by The Ontario Physicians Poverty Work Group, reveals that poverty substantially raises the rate of chronic illness, infant mortality and lowers life expectancy. One of the most dramatic conclusions in the report is that poverty is likely the most important determinant of illness and early mortality. Ont Medical Review - May 2008

11. Poverty as a cause of illness Poverty is making us sick: A comprehensive survey of income and health in Canada Wellesley Institute and Community Social Planning Council of Toronto December 2008 www.wellesleyinstitute.com

12. Poverty as a cause of illness Contrary to some popular beliefs, poverty is making Canadians sick – not simply lifestyle choices – robbing hundreds of thousands of their health and leading to widespread preventable illness and creating huge costs for the health care system. “High income does not guarantee good health, but low income almost inevitably ensures poor health and significant health inequity in Canada,” “This important new research establishes in the most complete way the strong link between low income and poor health,” says Rick Blickstead, CEO of the Wellesley Institute, which co-sponsored the study. “Prof. Lightman and his colleagues have demonstrated that health equity is truly an issue of national significance. The results confirm for the first time that relatively small increases in incomes of poor Canadians will lead to substantial increases in their health.”

13. Poverty as a cause of illness The researchers demonstrated that every $1,000 increase in income leads to substantial increases in health. For instance, an annual increase of $1,000 in income for the poorest twenty percent of Canadians will lead to nearly 10,000 fewer chronic conditions, and 6,600 fewer disability days every two weeks.

14. Poverty as a cause of illness The researchers, found that the poorest one-fifth of Canadians, when compared to the richest twenty percent, has:  more than double the rate of diabetes and heart disease;  a sixty percent greater rate of two or more chronic health conditions;  more than three times the rate of bronchitis;  nearly double the rate of arthritis or rheumatism. The poorest fifth of Canada’s population face a staggering 358% higher rate of disability compared to the richest fifth. The poor experience major health inequality in many other areas, including 128% more mental and behavioural disorders; 95% more ulcers; 63% more chronic conditions; and 33% more circulatory conditions.

15. Poverty as a cause of illness We need to call on governments to take pragmatic steps to raise the incomes of the poorest people. There are a variety of policy options – income transfers, tax policies, market solutions. The new research underlines the critical necessity for ensuring that there is a health equity lens in poverty reduction plans. There is growing international and national pressure on the federal government to set out its own poverty reduction plan. We need to encourage governments to include health equity into those strategies.

16. Canada’s Seniors Percentage of Canadian population comprised of persons aged 65 or older, 1921 to 2005 and projections to 2056 Sources: Statistics Canada, Censuses of Canada; Population projections for Canada, provinces and territories.

17. Today’s Senior - Income Median after-tax income received by elderly families and unattached individuals, 1983 to 2003. Sources: Statistics Canada, Survey of Consumer Finances; Survey of Labour and Income Dynamics.

18. Today’s Senior - Income Low Income Cut-off (LICO) • STATS CAN estimates the Incidence of Poverty using LICO. • In 2005 Stats Can estimated rate of poverty for Seniors at 6.7%. • That equates to 306,000 Canadians. • Expected to grow to well over 600,000 by 2031.

19. Today’s Senior - Income

20. Canada’s Retirement Income System Canada's retirement income system has three levels: Old Age Security ( OAS), the Canada Pension Plan (CPP) and private pensions and savings. The CPP, which was established in 1966, provides basic benefits when a contributor to the Plan becomes disabled or retires. At the contributor's death, the Plan provides benefits to his or her survivors.

21. Canada’s Retirement Income System Old Age Security ( OAS) $6,204 + $7,826 GIS Canada Pension Plan (CPP) 10,905 Total Income 17,109 14,034 Currently, CPP and QPP premiums are set at 9.9 per cent of income (up to $46,300), with contributions split equally between employers and employees. CPP was established to replace 25% of pre-retirement income.

22. Canada’s Retirement Income System What you need to know · 17.6 million: Number of people in the Canadian work force. · 11 million: Number of Canadian workers without pension plans. · 4 million: Number of those workers with registered retirement savings plans. · 10,000: Number of pension plans in Canada. · 4.5 million: Workers with pension plans who have defined benefit plans that guarantee the pension income of retirees until they die. · 55 per cent: Amount of those plans held by public sector employees. · $25,000: Average pension per year. (Source: Infometrica, University of Toronto professor Keith Ambachtsheer)

23. Canada’s Retirement Income System • Pensions: • 84% of public service workers have pensions. • 78% of these plans are gold plated defined benefit pensions • 25% of private sector workers have a pension plan • 16% of these plans are gold plated defined benefit pensions • 11 million workers, or 60 per cent, of Canada's workers have no pension at all • 8 million or 45 per cent, have no pensions or registered retirement savings plans (RRSPs)

24. Types of Pensions • Defined Benefit Plans • Dollar amount of retirement income guaranteed until death. • Expensive • 78% of public servants and only 16% of private plans are DB. • During good times, some businesses siphoned off a portion of pension surpluses while others took pension contribution holidays. • major Canadian pension plans - those with more than $1-billion of assets - saw assets swoon by an average of more than 18 per cent last year. • estimates show the average Canadian corporate plan is 20 per cent ($50 Billion) short of the assets it needs to fund its pension obligations. • The recession has forced a number of Cdn companies to liquidate or restructure their operations. Hidden behind these bankruptcy statistics are a growing number of crippled companies with pension deficits.

25. Types of Pensions • Defined Contribution Plans • A savings plan in which both employer and employees make pre-defined contributions that are generally based on a percentage of employee salary. • Contributions are tax deductible and accumulate on a tax-deferred basis. Amount accumulated is used to determine annuity amount payable upon retirement. • Dollar amount of retirement income not guaranteed. • Cheap • Chance that one could outlive their money. • Recession has lowered estimated pensions by almost 20%.

26. CARP HALIFAX, Nova Scotia: October 21, 2009 CARP calls on government to honour Canada’s pension promise and releases Universal Pension Plan. Canada is not honouring its promise to keep Canadians out of poverty in retirement says CARP which calls for immediate pension reform to help Canadians now at risk as well as to prevent such insecurity for future generations.

27. CARP • CARP is recommending urgent reform in all Four Pillars of Canada’s Retirement system: • Pillars One & Two – increased Public Pensions to Prevent Poverty • Pillar Three – rebalance the interests of employers and employees and to provide a universal pension plan for those without workplace pensions • Pillar Four – Support for Family Caregivers.

28. CARP Pillars One & Two – increased Public Pensions to Prevent Poverty The Cdn public pension system does not meet its essential goal of mitigating poverty in old age since the guaranteed level of income falls below the governments’ own poverty line. CARP recommends that the levels of OAS and GIS be substantially increased to bring the guaranteed income to at least the LICO appropriate for urban centres. Claw backs in GIS for casual earnings must be removed and the Allowance should be available based on income regardless of marital status.

29. CARP Pillar Three – rebalance the interests of employers and employees and to provide a universal pension plan for those without workplace pensions CARP recommends a Universal Pension Plan modeled on the CPP with mandatory enrolment, utilizing the existing payroll deduction mechanism, professional management, a governance role for the members, a mandate that is focused entirely on optimal performance and independence from government or any single employer and defined benefits as one way to achieve all of these goals. CARP recommends that the federal and provincial/territorial governments convene a Pension Summit as soon as possible to start the process of pension reform to rebalance the interests of employers and employees and to provide a universal pension plan for those without workplace pensions and ensure that knowledgeable representatives of retirees, those who have pension plans and the majority who do not, have a material role at the Summit.

30. CARP Pillar Four – Support for Family Caregivers. The World Bank in its formulation of the pillars of retirement security defines the fourth pillar as including the informal support sector, whether family support or public and states the need to incorporate this fourth pillar explicitly into the design of the pension system. In a similar vein, the 2002 Romanow report recommended that home care services be treated as the next essential service. According to a 2008 Statistics Canada report, in 2007, about 2.7 million Canadians aged 45 and over, or approximately one-fifth of the total in this age group, provided some form of unpaid care to seniors (people 65 years of age or older) who had long-term health problems. Between 2002 and 2007, the number of people providing care to seniors increased by more than 670,000. Estimates of the value of the unpaid labour contributed by family caregivers vary but one estimate provided to the Senate Report on Aging is $25 billion.

31. CARP Pillar Four – Support for Family Caregivers. CARP recommends a National Family Caregiver Strategy to support the millions of Canadians who are providing informal care to an older loved one by providing them with financial support, workplace protection as well integration with the formal health care system.

32. Your Retirement Income Most of the civil service has an indexed pension of around 60 to 70% of pre-retirement income – This is what experts say we need to live on. WE provide a retirement security for our public servants that is magnitudes richer than what we can afford for ourselves. What are YOU going to do about YOUR Retirement Income? SEEK PROFESSIONAL ADVICE!!!

33. CARP & Gerontology Finally, my colleagues and I in the Canadian Geriatric Society and GERI are very pleased to note that CARP ( Canada’s national association that advocates for a New Vision of Aging for Canada) has announced as one of its 25th Anniversary initiatives that it is establishing a Scholarship Fund for students pursuing studies in Geriatric Medicine, Nursing and Gerontology. CARP recognizes that there is an imperative in an aging society to attract and increase the number of health professionals in these fields. For further information on the Scholarship Fund, please contact CARP at www.carp.ca. Colin Powell: Professor of Medicine, University of Calgary Internist-Geriatrician, Seniors’ Health, Rockyview Hospital, Calgary Advisory Board Member, CARP

34. Thank you Questions?