To the Editor,
Re: Unfunded pension liabilities are a burden, Letters, Sept. 29.
Two recent letters disputed information in my letter.
Predictably one is from a “former business person.” He proffers the same old chestnut that higher pension contributions from business will negatively affect their ability to accumulate capital, foster growth and encourage employment. However, at a time when so called “dead money” set aside in Canada by business is at historic highs amounting to approximately $700 billion, there is apparently no shortage of funds that could possibly help fund pensions for those who are unable to benefit from the generous corporate tax concessions created by the Harper government.
The other letter asks whether I have forgotten that tax set aside by individuals to fund their own pensions is taxed when it is withdrawn. That is correct, but the idea behind RRSPs is that tax is levied on a presumably lower income when the taxpayer is retired. Tax-free savings accounts if accumulated by an individual at the current limit of $5,500 annually can lead to substantial accumulations of tax-free dollars on the interest or investment income and is also paid in depreciated future dollars. For those who earn too little to use either savings vehicle, they not only lose the current tax benefits, but remain vulnerable at retirement time.
At a time when insecure minimum wage work, temporary foreign worker programs and unpaid internships are increasing it makes good sense as well as being fair to all to increase guaranteed basic pension funding through the CPP.