May 10, 2006
Take action, defend our Pensions, Hargrove says
Attempts to change Canada’s pension system to further rely on individual savings such as RRSPs is doomed to fail and in the to the
Conference Board of Canada, Hargrove outlined the dangers of moving to greater privatization of pensions.

“Rushing to a system where individuals are left on their own to provide for retirement will inevitably result in increased hardship for
many workers,” Hargrove said.  “The arguments for privatization in the public system and the push to shift to individual pensions in
the workplace, ignore the inherent superiority of collective schemes for providing adequate retirement incomes.”

Public plans such as the CPP/QPP and in the workplace, defined benefit plans, can much better deal with variables such as inflation,
layoff, stock market and interest rate volatility, the flexibility to provide early retirement and to deal with disability, he said.

Defined benefit plans provide increased flexibility allowing early retirement and pension indexing. In addition because of their
collective basis, defined benefit plans, expose workers to much less risk than when workers are left on their own.

“Any system which depends on individual savings to pay for pensions will always experience incredible rates of poverty among
seniors, and incredible inequality,” Hargrove said.  In countries like Chile or Britain that have tried such private approaches it has
failed miserably.

Click here to read Hargrove’s complete speech on pensions

Source:  CAW NewsNow
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