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Liberals to call for a voluntary supplemental pension plan
Ottawa (3 November 2010) – The federal Liberal party appears to be contemplating an election platform on pensions that does not include an expansion of Canada Pension Plan (CPP) benefits, according to a "white paper" prepared by a party working group on retirement income security, a group co-chaired by Liberal MP Judy Sgro, the party's seniors and pension critic.
The paper was obtained by the federal New Democratic Party, and given to Postmedia News.
The major policy planks in the Liberal paper calls for a voluntary supplemental pension plan and significant easing of rules that now limit to one-year retroactive payments for late claimants of Canada Pension Plan benefits.
ccording to the Postmedia News report, the NDP accuses the Liberals of "running away" from what it says is the best solution for the majority of Canadians.
An enhanced CPP is the major policy in the NDP's retirement income platform. "Strengthening the universal, indexed CPP is the simplest, cheapest, most effective, guaranteed, defined benefit pension option available to Canadians," the party said.
The Liberal paper recommends that its voluntary supplemental plan be "managed within the existing CPP governance and regulatory structures," a system that, it says, has deservedly earned a reputation as a safe and trusted savings vehicle.
It suggests limits on contributions of 18 per cent of income, which mirrors the current limits on RRSPs, and says that a contribution to the voluntary plan of $5,000, for example, would reduce the amount someone could contribute to an RRSP by the same amount.
Conservative Finance Minister Jim Flaherty and most of his provincial counterparts (Alberta being the exception) are believed to favour a "modest" enhancement of CPP benefits, as well as other private savings options to encourage Canadians to sock away more for their retirement. They meet again in Kananaskis, Alberta on December 19-20 to consider how to begin to implement enhanced CPP benefits.
The Liberal report also recommends addressing a long-standing unfairness within the current CPP. People who are late claiming their CPP benefits, can only claim one year of past benefits. The report states the CPP claimants should be allowed to claim up to five years in retroactive benefits if they file late.
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