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1. CPP EXPANSION MYTHBUSTERS Alberta Federation of Labour Remarks by Paul Moist CUPE National President April 30, 2011 :te/cope 491

2. What We Want… • Phased in doubling of CPP • Current max $11,520/year * • Proposed max $23,040/year * • Increase GIS by 15% • Pension Insurance Fund * Based on YMPE $48,300

3. MYTH • “CPP expansion..............an excessive response to a problem that affects only a segment of the population.” • FACTS • 65% of workers have no workplace pension coverage. • In 2008, only 34% of tax filers made an RRSP contribution. • 2005 median value of individual RRSP - $60,000. • Private sector employers, large and small, arebacking away from pension plan sponsorship.

4. MYTH • “Increasing CPP premiums could cost jobs.” • FACTS • No evidence for such assertions. Unemployment rate fell during 5-year phased CPP contribution hikes (1990s). • John Kesselman, Jack Mintz, Professor Bev Dahlby, Princeton Economist Alan Blinder, countless others reject the job-killer argument.

5. MYTH “CPP expansion will not benefit those close to retirement” FACTS This table assumes a worker will not draw CPP pension before age 65 and will make at least $47,200 per year. The pension income shown in each example is in addition to the pension entitlement earned from prior contributions.

6. MYTH • “The private sector should be encouraged to develop innovative savings vehicles to meet Canadians’ needs.” • FACTS • 44 years of private sector innovation hasn’t worked. • Average management fees Canadian balanced fund: 2.6% • CPP Investment Board fees 2010: 0.5% • $10,000 investment, annual compounded 5% (ROR) achieves asset of $72,000 after 45 years with less than 0.5% management fee. • $10,000 investment, annual compounded 5% (ROR) achieves asset of $29,500 after 45 years in a mutual fund with a 2.5% management fee.

7. MYTH • “Now is not the right time to expand the CPP”. • FACTS • CPP expansion opponents will never agree to a “right time” to expand CPP. • Hundreds of billions in corporate tax cuts by feds/provinces since 2000. These and small business tax cuts more than make up for increased employer costs. • $16-billion purchase of new F35 fighter aircraft a greater national priority? • CPP covers all workers, levels the playing field for all employers.

8. MYTH • “Is 70 the new 65? Canada must catch up • on trend to raising retirement age.” • FACTS • Raising the retirement age avoids the real problem which is that Canadians are increasingly concerned about retirement income. • 40% aren’t saving for retirement because they can’t afford to, and expect to have to work in retirement. • Only 25% of Canadians are very confident they will be able to save enough. • Only 5% want to work passed age 65. • Source: CUPE/Environics polling August 2010

9. MYTH • “Public Sector Pensions are the problem”. • FACTS • CFIB campaign to attack public sector workers pay/pensions. • 30-year public employee, earning $40,000 average salary, receives an $18,000 workplace pension plus CPP. • CUPE/Environics poll August 2010, 80% of respondents thought typical public sector pension was “about right/too low.”

10. MYTH • “The proposed Pooled Registered Pension Plan (PRPP) is a viable solution”. • FACTS • Banks, fund companies lobbied hard for PRPP, which mirrors proposal made in 1984 by federal Liberal government but never implemented. • No different than group RRSP—a system that hasn’t worked. • Voluntary PRPP won’t induce employers who currently don’t sponsor an RPP or group RRSP. • Six in 10 Canadians oppose Ottawa’s move on PRPP and delay of CPP improvements (CUPE/Environics poll January 2011). • March 17, 2011 – Québec budget introduced PRPP.

11. FACTS: CPP vs. PRPP

12. MYTH • “Financial literacy is the solution”. • FACTS • Federal Government Financial Literacy Task Force dominated by business, financial interests. • Saul Schwartz, Carleton University : • “Why should consumers have to protect themselves from risky financial products?” • “Why should impoverished seniors have to apply for old-age benefits to which they are legally entitled?” • “Why should companies be allowed to let their employee pension plans fall into insolvency?”

13. FACT • Don Stewart, CEO Sun Life, Chair Federal Government Financial Literacy Task Force. • DB plan estimated at $1.4 million/year (indexed). • Sun Life workers get RRSP plan. • Average Canadian CEO pension $930,000/year (source: Globe & Mail).

14. FACT Many workers have had their workplace pension “promises” broken

15. FACT • Canadian CEO’s: “DO AS I SAY…NOT AS I DO…” • Michael Sabia, Former CEO, Bell Canada (9 years)…received 26 years of pension credit…$835,000/year (2007). • Gerald McCaughey, CEO, CIBC (2.7 years)…pension service for each year worked …$1.61 million/year pension (61 yrs). • Note: Both Bell Canada and CIBC changed their staff DB plans to DC plans for new hires.

16. FACT • Harper Government: “DO AS I SAY…NOT AS I DO…” • MP’s Pension: • 6 years to qualify • 3% x yearly salary x years of service, indexed for life • Stockwell Day – 15 years as an MP • 2011 Pension - $64,760/year • 2011 CPP Maximum - $11,520/year (*if YMPE is $48,300)

17. FACT • “Canadians get it and support CPP expansion.” • 80% of Canadians think CPP expansion should be top priority for governments (74% of Conservative supporters agree); • Two-thirds of Albertans want their government to work with others to improve CPP; • 81% believe retirement security/pensions important issues to debate in federal election. • Source: CUPE/Environics polling January 2011

18. Remember… Our arguments are strong…we’re united… CPP expansion is a key federal election issue… And we will win!