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What About That Other 3% ?

April 24, 2013 by .(JavaScript must be enabled to view this email address) at 07:23 AM

Here's an interesting interview with JIm Leech, the outgoing CEO of the Ontario Teachers' Pension Plan. Read the transcript here if you can't view the video. He answers some questions such as: Why can't plan members contribute more to the plan? and how he justifies a plan that is only funded to 97%. (There is a $5 billion shortfall.) One of the reasons he gives, besides poor past investment performance, is that teacher-retirees are living longer. Believe it or not, there are some retired teachers who will be recieving pension benefits for more years than they actually worked!

Why should this concern the average Ontario taxpayer? You pay through your taxes because school boards match the pension contribution. To date, the liability that sits on school boards' books for benefits totals well over $3 billion.

Here are some facts from the OTPP 2012 Report (H/T BT and Fair Pensions for All):

(Don't forget they are eligible for $12,500 in CPP and $6,500 OAS.)

FAST FACTS
• Number of pensioners has tripled since 1990
• On average, a member teaches for 26 years and is retired for 31 years
• 58% of pensioners are under age 70
• Average new unreduced pension starting in 2012 was $48,000
• Pensioners who retired before 2010 have full inflation protection
• At 1% interest rate, the plan must set aside $985,000 to secure a $40,000 annual pension
• There were 107 pensioners over 100; the oldest was 109

In that light, it will be interesting to see the fine print in the new deal with the OSSTF and ETFO!

(P.S. for those who gripe about corporate creep and the classroom, the OTPP owns a sizable chunk of some of the largest corporations in the world, including Microsoft )

Comments

Haven’t even counted the other public sector pension funds. Tossed in other policies such as foreign worker program, and other changes that impact the private sector, plus the rising taxes that people are paying that has risen according to the Sun, “The tax bill has ballooned 1,787% since 1961, the report says.”

So everybody in the public sector can play the ‘pauper’s game of robbing Peter to pay Paul. From what I have read in the economic papers - its unsustainable. Sooner or later it will come crashing down, and more so when foreign workers of cheap labour are taking away Canadian jobs.

http://www.torontosun.com/2013/04/23/tax-bill-for-average-canadian-family-up-1787-since-1961-report

Posted by Nancy on 04/24 at 09:27 AM

I think that we should all vote Liberal in the next provincial election and let them clean up their own mess. Kathleen would love to raise personal and corporate taxes to pay her union buddies and the countless bureaucrats in the public sector, but with the new hydro rates coming down the tubes, and clawing at the corporations’ profits, she’s going to scare business and investment (our tax base) out of Ontario! Now she wants more gambling. What won’t she do to please the public sector!
The Liberals have been accused of not taking the deficit/debt seriously enough. If Ontario faces another downgrading in their credit rating, it will verify the ‘Cons’ accusations.
Our premier must know the strain that just these gold-plated pensions are putting Ontario under; yet she’s avoiding tackling the problem!
If we vote the Liberals in again, we can sit back and watch—while the problems they’ve created by genuflecting to the public sector continue to worsen—it’ll at least be interesting.

Posted by Bev on 04/25 at 09:22 AM

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What About That Other 3% ?

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