Reinventing the wheel

The Canadian government is offering the idea of a separate, pooled, private pension plan "in a bid to encourage more Canadians to save for retirement".

Am I the only one scratching my head here? We already have a pension plan - two of them actually - they're called the Canada Pension Plan or CPP and Old Age Security. They're both broken. They don't offer Canadians the kind of money they need to retire comfortably. If you do manage to save up your own nest egg, or earn another pension from another source (note the word 'earn' there), the government claws back some of the pension money you'd be entitled to.

My thoughts are simple. Stop side-stepping the real issue and fix the existing pension vehicles that hard working Canadians pay into their whole lives, but barely get to withdraw from when it's time to reap the benefits of the pension(s). Stop finding excuses why Canadians can't reap what they're owed because they happen to have income from various sources. It doesn't make sense and it penalizes people who go the extra mile to set aside even more of their money - no more claw-backs. It will require that the funds are managed better, that the pension funds are not lumped in with general tax revenue and that our contributions will have to go up. But wouldn't you be willing to pay a little more if it meant being able to depend on the investment to live a comfortable life in your twilight years?

Creating a separate, opt-in, privately managed pension solves nothing. All it does is set the stage either for the dismantling of the CPP, or at the very least takes the heat off of the government to actual try and fix the CPP. Meanwhile, the private corporations likely to manage this new fund are drooling with anticipation.

I wish I could manage my own funds going to the government. Let me pool my Employment Insurance (EI) and pension contributions and add extra if I want to and when I can afford it (tax free).