The Canadian Labour Congress has openly criticized the federal government’s plans to push ahead with its Pooled Retirement Pension Plan, calling it a “lemon.”
Meanwhile, Hon. Ted Menzies, minister of state (finance), has embarked on a cross-country blitz to promote the plan, despite not being able to offer details about how it will work.
“Minister Menzies says his government’s PRPP experiment is the solution to the country’s looming retirement income crisis, but can’t offer any specifics about how or if it will actually work,” says Ken Georgetti, president of the CLC.
Georgetti says Canadians are unlikely to opt into any workplace pension plan that doesn’t guarantee employers will buy in, doesn’t protect against inflation or future market turmoil, and doesn’t promise management fees charged by private sector brokers won’t bleed away future earnings.
Instead, he suggests the federal government should expand the Canada Pension Plan as soon as possible.
According to Georgetti – whose organization includes unions responsible for 80% of negotiated workplace pension plans in Canada – the Conservative PRPP scheme puts the interests of the financial services industry first.
Georgetti is particularly concerned about the fees private brokers will charge employees. Menzies admits he does not know how much those fees will cost and can’t promise they will be lower than what people currently pay.