HEY AMERICA – THIS IS COMING YOUR WAY.
I am constantly reading from American visitors to Galganov.com how much they envy Canada’s economy and government. THEY SHOULDN’T.
On January 26, 2012 I wrote: “HAVE YOU HAD ENOUGH YET?” dealing with the duplicity of Canada’s government concerning Canada’s reneging on a fixed and firm Pension COMMITMENT.
IT’S NOT AN ENTITLEMENT:
Prior to 2012, anyone who PAID-IN to the Canada Pension Plan . . . let me repeat this – PAID-IN, which implies investment opposed to entitlement, would be able to begin receiving an Early Pension by the age of 60 years old.
HERE ARE THE RULES ESTABLISHED BY THE FEDERAL GOVERNMENT:
1 – You only get back from the Federal Pension, a preset return on how much you’ve contributed over the years. The formula for what you get is so simple, that literally in seconds, a phone call to the Federal Pension Office with your Social Insurance Number to the bureaucrat with whom you’re speaking gives you the amount you will receive to the penny.
2 – If you opt for an Early Pension, you then agree to surrender 25% of what you would normally receive if you took your full Pension at 65 years old.
3 – If you waited until 70 years old to receive your Pension, you would receive 25% MORE than if you took your Pension at 65 years old.
4 – If you opted to receive an Early Pension as Anne and I did as of February 12, 2010 (me) and December 24, 2011 (Anne), we STOP paying into the Pension Plan, as does our employer, which happens to be us since we are self-employed.
5 – The Government’s own WRITTEN rules dictated that neither Anne NOR I could continue to contribute to the Canada Pension Plan once we opted to take the Early Pension, meaning that our company would also no longer have to contribute matching funds. This was not a choice but a firm rule imposed by the government.
6 – Once we opted for the Early Pension, there would be NO GOING BACK even if we wanted to.
IS THAT CLEAR ENOUGH?
In my mind, not only are the rules clear enough, they established an unambiguous CONTRACT between the government and all the people who before 2012 opted to collect their Early Pensions. AND THAT’S THE RUB.
The government of Canada RENEGED on their contract with the people who opted to take their early Retirement Option by changing THEIR OWN GOVERNMENT rules in the middle of the game.
So, as of January 1, 2012 . . . everyone who is in my position must now continue to pay for their Pension as if the prior rules never existed. And companies must now contribute matching funds, also as if the prior rules never existed.
So, instead of receiving a paltry sum of about $9,000 COMBINED BEFORE TAXES per year for Anne and myself, we will be LOSING more than $1000 per year because the government of Canada CHEATED on their OWN contract.
WHY DID THE CANADIAN GOVERNMENT CHEAT ON ITS OWN RULES?
The ONLY reason for Canada to have changed the rules in the middle of the game is because Canada is BROKE. Canada is not that great shining example of fiscal responsibility the Canadian government wants everyone to believe that it is.
IN TRUTH . . . CANADA IS NO MORE FISCALLY RESPONSIBLE THAN IS THE USA.
No one is going to hold a tag day for Anne and myself. But, we are not rich by any stretch of the imagination. And if we want to maintain the non elitist lifestyle we currently enjoy, we will have to work until the day we die.
Like MOST people in our age bracket, Anne and I don’t sleep at night worrying about what will happen to us when we can no longer work? How will we continue to pay the exorbitant costs of living imposed upon us by government incompetence and theft?
That measly Pension that Anne and I receive is NOT an entitlement. It is a very poor return on a great deal of money the government of Canada FORCED us to contribute over the years whether we wanted to or not.
And they are NOT giving us back something that is NOT already ours.
They are only giving us back a slight portion of what we would have otherwise received had we invested that same amount of money over our entire working lives in something as safe as bonds, where the return would be in excess of 1.5 MILLION dollars EACH, instead of the monthly insult we receive from the government.
But, that’s the way it was. And there was never a choice. So, I’m not going to cry over what could have been, because the government’s own rules made what could have been an impossibility.
Like MOST people in the Private Sector, Anne and I worked our entire lives and NEVER took a government handout EVER. As employers, we’ve paid out MILLIONS of dollars in salaries, commissions and bonuses. And never once did we renege on a deal with anyone who worked for us.
A TALE OF TWO PENSIONS:
A couple of years ago, I met a man who worked for a very small Ontario City (Cornwall) with a population around 50,000 people. He worked for 30 years or so cleaning government city buildings, and at age 55, he decided to take his retirement.
During a conversation, he complained to me that he had to continue working, because after taking his City Pension at FIFTY-FIVE years old, he discovered that it wasn’t enough for him and his wife to live on, even though his wife has a job with the federal government.
So, not being shy, and always being curious, I asked him how much the City of Cornwall was paying him not to work. His response almost made me puke:
“After thirty years of working for the City, all I have to show for it is a lousy $3500 per month.”
I looked at him with absolute incredulousness – That’s FORTY-TWO THOUSAND Dollars per year, which is almost TEN TIMES what I’m collecting at 60 years old.
This guy in retirement at the age of FIFTY-FIVE years old was making MORE money NOT working than most poor working families do with two incomes. AND HE WAS COMPLAINING.
But it gets worse – It’s insult on injury. His wife is a retired senior military officer who will also receive a very generous Pension from the military when her retirement age kicks-in. And what about her current government job . . . from which she will receive yet ANOTHER generous Pension?
But, that doesn’t end it for them, since in addition to his City Pension, he will also receive his Canada Pension and Old Age Pension, while his wife will receive her Military Pension, her Federal Job Pension, her Canada Pension and her Old Age Pension.
IN EVERY RESPECT – this couple of Public Sector Workers who’ve NEVER created a job or met a payroll, or worried about being unemployed, will retire in RICHES compared to the people who’ve carried them on their Private Sector TAXPAYING shoulders during their entire working lives.
SO WHO IS GOING TO PAY FOR ALL OF THESE UNGODLY PENSIONS?
There is a great deal of anger just beginning to build over the Pensions of our elected Members of Parliament.
For every dollar each Member of Parliament contributes to his or her Pension Plan, TAXPAYERS like Anne and myself contribute as much as, and perhaps MORE than $23.
HOW SICK IS THAT?
WORSE – These politicians only have to serve 6 years to be on the gravy train to start collecting their pensions at age FIFTY-FIVE.
By the time all levels of Government; from building cleaners, to teachers, to bureaucrats, to elected politicians get finished GORGING their GLUTTONOUS appetites on the PRIVATE SECTORS’ TAX MONEY, there will be NOTHING left for the people who pay the full shot, but growing unsustainable debt and a future of poverty.
AND I WON’T STAND FOR IT.
As I wrote in my last editorial . . . if the politicians want to declare war on me, I can just as easily declare war on them – AND IT’S COMING.
Best Regards . . . Howard Galganov