Workers deserve to retire in dignity, expand the CPP

OTTAWA, ONTARIO--(Marketwired - Sept. 3, 2015) - To mark Labour Day, the Canadian Union of Public Employees is calling on its members and all Canadians to support an expansion to the Canada Pension Plan that will help ensure all workers can retire with dignity and out of poverty, and to support the only party fully committed to expanding the CPP - the NDP.

"While enjoying this holiday long weekend with family and friends, we should take a moment to think about the over 11 million Canadians without a work place pension plan," said Paul Moist, national president of CUPE. "If we don't address this growing crisis, millions of our neighbours face retirements in poverty. But there is something we can do and do right now - expand the CPP."

The CPP currently replaces 25 per cent of a retiree's annual working earnings below $53,600. This means the maximum CPP benefit is $12,780 per year, but the average retiree gets around $7,300 - about $600 a month.

"The CPP is well run and fully sustainable, but clearly the current benefits are not enough for a retiree to survive on," said Moist. "With a modest increase to the contributions made by employers and workers CPP benefits could be doubled. This would mean millions of Canadians could retire with a decent and secure income."

The doubling of CPP benefits could be achieved by phasing in increased contribution made by employers and workers over seven years. These increases would be less than 0.5 per cent per year. For a worker earning $30,000 per year, initial increases would be about six cents an hour, less than $2.30 a week, in contributions.

"Using this plan to expand the CPP is the most efficient, effective and affordable way to ensure as many Canadian workers as possible have a decent retirement income," said Moist.

Less then 25 per cent of Canadians contribute to RRSPs, which on their own are an ineffective way to prepare for retirement. Many workers who don't contribute say they simply can't afford to. RRSPs, and most other voluntary savings tools, are also subject to high management fees and don't have the same kind of security as the CPP.

"Pension experts, provincial and territorial leaders, and according to many polls, the vast majority of Canadians believe this is the best way to keep seniors out of poverty," said Moist. "Thomas Mulcair and his NDP team also see this, and are the only party fully committed to expanding the CPP. That is the type of leadership Canadian workers need."