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Dispelling public pension plan myths

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Norm Johnston:

Add in $18,372 for CPP & OAS makes total pension about 70% of pre-retirement earnings. Also add in guaranteed inflation protection, disability benefits, employer contributions about 125 % of employees deductions and overly generous employer subsidized early retirement makes in my mind every reason not to dispel the myth. Generous benefits funded by taxpayers who in many cases have no employer pensions.

Wednesday, August 28 at 1:16 pm | Reply

Ron:

I must take exception with the comment that “DC pensions less than even the modest pension produced by HOOP and other DB Plans”

To be fair one must use the same inputs in both situations and in today’s DB world, if one takes into account employee contributions, employer regular contributions and employer additional contributions to pay for plan deficiencies, the total dollar inputs are often close to 20% of covered payroll. If you accumulate those dollars in a DC plan over a working career, the two pension amounts are now close together. As well, the tone of the comment about DC fund charges implies that DB investments come free of charge which they certainly don’t, even they are done “in-house” so to speak there is still a inherent fund cost plus the cost on the entire infrastructure of the “in-house” investment team. So let’s be fair and compare apples to apples.

Thursday, September 05 at 1:39 pm | Reply

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