THE BOILERMAKERS’ International Executive Council scholarship committee announced the winners of its 2013 scholarship program this past April. The committee awarded $54,000 to 27 recipients, with $42,000 being allocated to U.S. applicants and $12,000 to Canadian applicants.
The one-year grants included five $3,000 awards, 17 $2,000 awards, and five $1,000 awards. The committee selected scholarship recipients from a pool of 107 Boilermaker dependents in their senior year of high school. Applicants were judged on their academic achievements, leadership skills, participation in extracurricular activities, and performance on a 300-500 word essay.
by Alicia Mehling
As the time for retirement draws near, workers hope to be secure financially and pension plans are there to absolve that fear, but a growing pension crisis may prevent pension plans from accomplishing their one duty- easing the financial burden of retirement. Many fear this mounting problem that they might outlive their income even more than being able to pay off their house or sending their children to college. Now, more than ever, with cost of living continuing to rise, our society needs to implement pensions to alleviate the financial pressures of retirement. Our society needs pensions for numerous reasons including, but not limited to, security in retirement, safety nets, a way to tie the laborer to the company, stimulation of the economy, and financial support for the family in the event of death.
Poverty runs amuck among the elderly simply because they do not have enough to live on. Social security does not cut it. Retirees need a solid, constant income that is enough to get by on. A company has an obligated duty to take care of its workers, especially the retired work force, who have dedicated a lifetime to working, and who long for something in retirement to show for it. Pensions liberate workers from these fears by offering security in their retirement. With pension plans retirees will be able to bask in the pleasure of retirement without having to worry how they will get by until death. Pensions also provide a safety net for the unexpected, which at some point is highly likely to happen. When it comes to sickness or accidents, retirees should not fret and worry about falling into debt. Once again pensions absolve that fear. It protects the majority of the retired working class from falling into what would be inevitable poverty.
Not only do pension plans lift retirees from poverty, they attract and tie a worker to his or her company. For employers to keep valuable workers, they want to offer a rewarding pension plan, and in return a worker will boast a certain loyalty toward his employer. In return for their pension, they will be more willing to work hard, efficiently, and respectfully. The worker is the force behind a company driving it to success and providing a pension is only the right thing to do. Employment is a two-way street-the employee serving the employer and the employer protecting the employee.
Once workers hit retirement, they do not stop consuming, and in fact, they do the opposite. They are a prime target for medication, retirement homes, and vacationing. Whole goods and services, such as medical services, are dedicated primarily to them because they are the majority of consumers in these areas. Without pensions, retirees will be less likely to partake in the consumption of certain goods and services that thrive off the retired demographic. Jobs will be lost in response and unemployment will rise, unless pension plans are implemented. Pension money also acts to stimulate the economy, by raising demand for products and services that would interest retirees. Their consumption creates a circle of money flow that would otherwise be nonexistent.
The last reason on why our society needs pensions comes personally. In the event of a retiree's death their pension supports those who survive him. My family faced this heart breaking circumstance just a few years ago, when my father, a retired boilermaker, died of a staph infection that attacked his heart. Luckily for my family, his pension plan saved us from worrying about any future financial problems. Thanks to his defined-benefit pension plan, a plethora of stress was lifted off our shoulders and we were able to dedicate our attention to my father's memory at that shattering moment. Widows receiving this pension money may continue supporting a family without fear.
Instead of looking toward retirement with joy, many workers fear that they will outlive their paychecks, and many also believe they will need to work in retirement because they will not have enough money otherwise. Hence, these golden years have turned into the black years, as many dread awaiting circumstances. A number of factors have contributed to this growing crisis. Due to retirees living longer, thanks to improved medical care, and lower birth rates, which take away from the working class, the ratio of retirees to workers has grown much greater than before. Resources for pension obligations are dwindling as this gap widens. The recession has also taken its toll on pensions, by limiting further funding for pensions, resulting in lower pensions for future retirees.
Certain core values separate a good pension from a great one, and these are accountability, dignity, effective communication, and dedication. All pension plans must have accountability and assurance that they will be enacted fully and with no mistakes. A pension plan's dignity upholds truth and responsibility. Through effective communication, goals of both the employer and the employee can be realized and seen through. Lastly, a pension plan must be dedicated to meeting the expectations of the retiree. In the end pensions serve one mission. A pension's mission is to provide esteemed workers with financial security throughout retirement while upholding the utmost care, responsibility, and dignity.
by Breanne Dmytriw
Pension plans play an important role ·within our society as the plans interdependently link the contributions made by working citizens and the country's functioning economy. A pension plan is in many ways a promise that is made between an employer and an employee- as well as the government's working citizens. The plan vows to financially fund an employee by guaranteeing a sufficient amount of money will be available for the employee after they are no longer able to work to support their families. Secondly, pension plans are often regarded as a form of forced savings that positively benefit workers by simply managing the money that many do not have the discipline to save and control. Furthermore, this plan of action decreases the possibility for poverty at old age in the future, and reduces the need for citizens to rely on the country's welfare programs. In addition, this security of funds benefits companies in the workforce by attracting and retaining workers through the incentive of well developed pension plans. Lastly, the format of the pension plan offered, or made available through the labour and job industry, weighs heavily on the overall investments, bonds, and stocks functioning within our society nationally and internationally.
A pension plan should hold within it a set of core values to protect and put the interests of the employee first. Within a plan there should be an ethical and responsible management system of the funds to prove the accountability, and protection of the money. This information, that is constantly monitored, should be reported to the employees on how their money is being handled, how their funds have grown, and where the money is being invested. The credibility of the accounts may also be observed by a third party to ensure that the money is kept separate and held in trust. Most importantly, a pension plan must commit honesty and act with full integrity for the employee's best interest.
There are many vital components in well developed pension plans that contribute to the overall success of the program. The benefits of a pension plan must be clearly laid out to the employees and all contributions should be clearly stated. Education and information about the pension plan should be accessible to the employees ensuring that they have the knowledge needed in understanding where their money is going and how to handle their funds. Information must be communicated to the employee through accurate reports of what is taking place within the pension currently. This supports the need for accountability and an auditing component that must be controlled by a third party as the money should be segregated and held in trust. In addition, the pension plan must have inflation protection. This protection, overtime, is designed to offset the rising cost of living. In addition, many pension plans may have a liquidity component with money that you can access. Within a defined contribution plan, investment opportunities must exist and be made available to allow for employees choices. This type of plan must have investment mandates outlining high and low risk investment opportunities. Overall, and most importantly, a pension plan must have a clear retirement formula that is easy to understand.
Many current trends can be seen within today's pension plans. Two of the most common types of pensions are the defined contribution plans, and defined benefit plans. Employer pension plans are not mandatory but many companies want to have one to support their employees as it becomes a beneficial option to retain and retract employees. The pension plans are also an ethical process in guiding employees out of the workforce and supporting them through retirement. The Canada Pension Plan (CPP) that is facilitated by the federal government ensures that all Canadian citizens have a plan for the future by regulating contributions through payroll deductions. Old Age Security (OAS) is a government pension that everyone in Canada receives, regardless of whether or not you have contributed to the Canadian workforce. At the age of 65, Canadian citizens receive this cheque which amounts to, on average, $546.07 per month. This amount is clawed back if you have a high income and it can vary on the citizen's financial situation. It is also important for employees to know that they can not access this pension until the age of 50 to 55 years.
In a defined contribution plan the employee is granted the opportunity on where they want to invest their money through cash, bonds, and stocks. The company will then contribute the same amount of money that the employee is allotting (employee puts in x amount of dollars, and employer matches x amount of dollars). This plan's risk falls on employees to make it work and that they have the awareness to correctly invest their money. A defined contribution plan may have a few draw backs for some as the investor's behaviour and emotions may lead to poor decisions with investments. These resolutions may lead to an employee's money not growing as fast as they had planned.
In a defined benefit plan, the money saved for retirement is defined as an allotted amount of money. This amount is often calculated to equal around 6o% of the employee's entire salary. This risk falls upon the employer as the challenge is found when the pension is under funded due to low interest rates and low performance in the stock market. Very few companies offer defined benefit plans because of this risk and depending on the situation, it is possible for the employee to switch plans and enter a retirement foundation that works best for them.
Government workers do not need to worry about pensions being under funded because of taxes. There is however worry that the old age security plan could be discontinued because no money is being contributed into the fund from the workers. This puts pressure on the government and CPP taxes as many question if there is enough money set aside to support these citizens in the future. This trend can be seen today within the baby-boomer generation, as much of our population is nearing and going through retirement. Furthermore, the government has also had to explore the reality that the life expectancy has increased as people are living longer and are needed the financial support into older ages.
Through the process of writing this essay I have been educated on how important pension plans are to the citizens of Canada on a personal level, and also on a national economic level. It is important to me to further my knowledge in this area of financial planning as I will encounter the prospect of joining a pension plan as I will be entering the workforce. I can now understand the full use of CPP when it is taken off of my pay cheque and how these funds will support my country and me in years to come.
My mission statement for a pension plan would be focused around the core values of a plan. The pension plan should put the interest of the employee first and take into account the best investment options for the individual. The pension plan must commit full honesty to the employee with pure accountability of how their money is being invested. With integrity, the plan is held in trust and outlines a clear retirement formula for the employee.
by Dustin Bennett
Pensions: a guarantee for the future. Pensions are a backbone of workers' benefits, and for a good reason: they provide crucial services that employees need for the peace of mind they deserve. Pensions offer financial security so that a diligent worker can go home assured that he'll be taken care of when he's older. He can be comfortable knowing that his family will manage, should anything happen to him, thanks to the insurance component of his employment-based pension. Knowing that working through to retirement will let him relax and enjoy himself motivates him to work hard and be the best employee he can! Pensions let workers put money toward their retirement without having to worry about remembering to deposit it into an account or trying to calculate how much they should put away, and they let them do so without overbearing banking fees. Another kind of pension, Social Security, eases the burden on the disadvantaged, the elderly, and those that take care of them, giving them the means to live as they should. Pensions truly help people from all walks of life.
Good pensions share a few key traits. A plan of quality should have transparency, letting its constituents know how it works and what it does to get them what they deserve; consistency, so pensioners won't have to worry about ever-changing payments or steadily-rising retirement ages; and most importantly. consideration for their customers, a thorough and attentive dedication to helping those that look forward to relaxing in their retirement.
Despite being beneficial in so many ways though, pensions are in danger! As life expectancy increases, companies are forced to take more of a worker's payment to save for his constantly expanding future. Also, as national debt increases, all kinds of laws are being passed to increase federal revenue, including those that affect pensions! Companies are struggling in the recession too, forcing them to cut down more and more on their retirement programs. Pensions may be essential, but they're facing their own set of challenges.
"To ensure the well-being of our constituents, and to keep their hearts happy, their minds at ease, and their hard work well-rewarded"
by Heather Hobday
Pensions are an important part of society because they are undoubtedly one of the best retirement options to invest in. They offer benefits for workers and employers, are more secure than individual retirement accounts, and have high investment returns - all while supporting the local economy. One of the most prominent reasons pensions are so important to society is they are the major source of income for retired workers and have been since the 1960's for both Americans and Canadians alike. Pensions ensure that retirees live out of poverty through a series of investments and monthly contributions, so retirees can live a life of dignity for their years of labour. This appeal alone has a positive impact for employers, as workplace benefits offered by pensions contribute towards a solid workforce. With pensions essentially being workers' deferred wages, workers will likely stay with a company if it means access to benefits for retirement. In other words, a workplace with good pension options will increase productivity and set a good reputation for employers. While the intentions of pensions are definitely promising for workers and employers, there are definitely risk and cost factors that come into play when considering other retirement options like RRSP's and Tax-Free Savings accounts. In the grand scheme of things, however, pensions continue to be an important asset for society because they offer a greater comfort zone through pooled risks. Unlike RRSP's and Tax-Free Savings accounts, pension plans have several beneficiaries that cannot withdraw any money until retirement. In terms of cost effectiveness, pensions are ideal to society as they are more economically friendly than individual savings accounts. Because pension payments are administered by a portfolio of participants, the investment management fees would be cheaper than running several individual savings accounts. With the extra money that is not absorbed by management fees, retired citizens have higher investment returns that they can use to their own contents. Where the retirees intend to spend their benefits has a positive impact on society, both on a national and local level. By putting forth contributed benefits towards goods and services both locally and nationwide, that money is contributing back to the economy, and ultimately showing the signs of a stable, developed nation.
Some of the core values that all pensions should have are security, family values, and equality. Pensions should value security by ensuring older citizens are sheltered from poverty and also ensuring that beneficiaries' money is used solely for the purpose of retirement. For mandatory pensions like the Canada Pension Plan, contributors should feel secure that their money is used for promised retirement benefits down the road, just as retirees should not have to fret about going bankrupt. Even with the inflation of baby boomers retiring and the high dependency load of North America, the core value of security should always remain intact. In addition to security, pensions should also value family. Considering that pensions' main intent is to act as a safety net for retirees, pensions should provide the same benefits to the spouse and/or child(ren) after the worker has passed. Pensions valuing both the worker's and family's wellbeing is both relevant and important, as article 23 of the Universal Declaration of Human Rights specifies, "Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity ..." Pensions should recognize that providing payment for a higher quality of life for both workers and their families is important, and therefore should be made a core value. Finally, workers of any ethnicity/sex/orientation/religion should be eligible for retirement benefits to accommodate the diverse range of people living in North America today. By having equality as a core value for pensions, it promotes a diverse workplace environment while promising multitudes of workers a secure retirement.
While the intents of pensions are arguably a good thing, there is a problem that exists today known as the "pension crisis". The major problem with pensions today is that there is not enough money in pension funds to deliver a comfortable retirement as a result of shifting demographics. Life expectancy is rising as birth rates are lowering, or in other words, retirees are living longer than workers can support them, all at a fixed retirement age. As a result of this age gap, there is an underfunding of pensions noticeably affecting Europe and North America. Since 2009, 45 states in America have cut back benefits for teachers, police and other public workers, just as the Canada Pension Plan in 2012 lowered benefits for retirees under the age of 65. Pension cuts as a solution to underfunding has created quite a stir through protests, campaigns and lawsuits from labour unions and retired public workers. Some workers have responded by following a defined contribution plan instead of the traditional defined benefit. Either way, in the midst of the pension crisis, there is still hope in new reform ideas and proposals to help alleviate underfunding.
Our mission as a workplace pension plan is to provide members with suitable retirement benefits to ensure financial security and dignity. We aim to administer pension plans, benefit plans, and funds in a professional manner while taking necessary action in investment markets at minimal risk. We value protection, equality and the importance of compensation towards the community and society.
Having a Future
by Jaylyn Miller
Most people do not want to think about retirement expenses until that time arises. In reality though, a plan must be set forth at an early stage in a person's career so that the person is not in a bind when he or she approaches retirement age; therefore, pensions keep the economy circulating through all ages. Employer contributions can be a huge part of a good pension. Employers use pensions as motivational tools to draw employees in. This helps keeps the unemployment rates from rising. Pensions put an ease on taxpayers. People will always have guaranteed income from pensions; therefore, it is less likely for people to fall behind on their mortgage loans and lose their house. Pensions allow for more contributions towards college loan funding which helps to make room for the younger generation to take over.
A good pension would allow employers to offer contributions to their employees' pension funds. It is extremely beneficial to employees who are given the luxury of pre-taxed
contributions as well as tax exemptions. Since people often do not save enough on their own at a young age for retirement, a good pension allows for retirement security and gives the employees peace of mind. As of today, people look for a good pension that helps them maintain a middle class standard life.
Current trends impacting pensions today are a huge topic in the United States. Social Security is becoming a drained supplemental plan so people cannot expect to rely solely on it for their retirement benefits. Those who have pensions are in better standing when they hit retirement age. Shockingly, poverty rates in elders are rising due to the lack of funding that is now available for them. Another issue is that healthcare programs are continuously changing making them unstable. Lastly, a controversial issue would be "double-dipping." Retired employees are being rehired and taking advantage of retirement benefits along with the income they are receiving through their employer.
Pensions benefit the society in many ways, and everybody needs to understand the importance of having a pension. The economy will boost if young people realize what they should invest their money in. The economy may be shaky, but pensions can help save many people from going into debt. A brief mission statement for a reliable pension would be, "This pension plan will provide knowledgeable advice that benefits our members while we demonstrate courteous and respectable attitudes towards them."
by Korey Kellogg
The best pension plan is the one that gives you peace of mind. Having a reliable and stable future going into retirement is essential. The use of experience, knowledge and resources to deliver quality results for your retirement benefit plan is a necessity and top priority.
Pensions are a critical lifeline to America's seniors. Keeping these vital systems healthy should be a high priority so that pensions can continue to keep the promise for future generations. It is very important to have a retirement plan in place and for it to be maximally beneficial to the employees in which it has been created. A strong pension will be able to support the retirees in a company or union and give them the peace of mind they need in going into retirement. Giving employees that peace of mind is the first
reason pensions are so important in society today. It allows for senior citizens to continue to receive income after they have retired, reducing the chance of devastating situations such as poverty and possible bankruptcy. Strengthening the finances of our elders will allow them to up keep a way of life that they have worked so hard for. Giving financial stability will help those in retirement to be self-sufficient and allow for prosperity to subsist. A second reason is to allow for a more balanced lifestyle, reducing the amount of money someone must have built up in order to survive after departing from employment. Creating this balance is an intricate process, but it can relieve many stresses or burdens that can appear. The retired employee should not have to adjust their lifestyle when entering retirement, but continue to be a reliable fiscal being. Another reason that pension plans are important for society today is that it gives employees job security and increases the retention of employees for long term due to the benefits found in having such a plan. This allows for higher productivity in the workplace, higher wages, experience and helps to boost the economy in areas where retention is high. Pensions also reduce the amount of government dependence. Lowering the extent that people depend on their government to support them if they enter a personal depression is a definite benefit held within a
pension. The final reason, within this essay, that pensions are important to our society is that instead of risk being pushed onto the employee it is given to the employer. An employer has the ability to hire asset managers who are more experienced in investing which leaves pensions with a greater chance for success and increases reliability through diversification of financial market risks. In recent years with the market downturn and economic recession affecting all Americans having a group-based defined plan are in a better position to weather the storm. A major trend of today regarding pensions is the increased average lifespan. This increased lifespan puts more stress on a better retirement plan if the age for retirement remains the same.
Importance of Pensions
by Mallory Kelly
Pensions are a critical aspect of our society; however, they are often disregarded. In this essay, I am going to discuss many reasons why pensions are important, highlight the essential values of a good pension and examine the current trends affecting pensions.
The first and rather obvious advantage of a pension is the fact that it provides financial security to individuals. They have worked hard towards their retirement and deserve to have the comfort of knowing they will have sufficient funds in their old age.
Another comfort that comes with a pension is the way it allows individuals to maintain their integrity and independence. Having a well-planned retirement prevents individuals from becoming a burden to their family or society. Pensions also allow individuals to maintain a decent standard of living. An anxiety that often accompanies retirement is the fear of losing quality of life. However, a good pension satisfies necessities and often provides for some luxuries, too.
A good pension also practices good risk management. It should have qualified administrators to strategically review how investments are working out, based on practical expertise and simple business principles.
Another aspect of a good pension is the manner in which it rewards honesty and loyalty. Most pension benefits are based on years of pensionable service, and people are rewarded for their commitment to the work force. This reward is also an advantage for employers, because it makes it easier for them to attract and keep employees.
Not only does a pension offer advantages for individuals and employers, but it also presents economic benefits to communities. When pension money is spent locally, the businesses see a rise in profits which means they can expand or hire more workers. This creates stability in the community.
Something else that a good pension should do is having an effective method of communication. It's important to know the expectations and aim for the goals of all stakeholders.
Although there are many benefits that come with pensions, there are also many things that are holding them back One of the current trends which is having an impact on pensions is the current retirement wave that Canada has been facing. Thousands of people are presently reaching retirement age and it is putting the country into a state of demographic shock According to Statistics Canada, from 1995 to 2010, there has been an increase of 1 000 000 people that are covered by a registered pension plan.
This is going to become an ever bigger issue in the next ten years, because of the baby boomers. People born after the Second World War will be retiring. Families are also getting smaller, so less people will be supporting the system. This means that the system will be strained and the government will have to reduce services and benefits to the elderly. However, this decline of public plans only stresses the importance of having a pension.
Another trend that is affecting pensions is the structural changes being made to the economy. Unemployment, privatization and the globalization of market have left people feeling insecure about their economic well-being. To compensate, they make choices to either delay their retirement or lower their retirement standard.
In conclusion, I believe that a pension provides advantages to individuals, employers and communities. I also believe that a good pension rewards loyalty, involves good risk management and successful communication aimed at meeting objectives. A mission statement that represents these things is "To help devoted people achieve financial prosperity and peace of mind."
by Marissa Stack
Pensions are extremely important to American society and the well-being of so many of its citizens for many reasons. For example, most retirees do not have enough money in personal savings to live off of comfortably after they are done working. Especially with such tough economic times, people can barely afford to the basic needs that they have while working, let alone be able to afford keeping extra money for the future. Therefore having a pension that is an accumulation of money collected throughout life ensures that the retiree will still have a secure life after working for so many years. Another reason that a pension is so important is because Social Security given to these retirees is not a livable wage and therefore a pension can make up this deficit and therefore help the elderly financially. Pensions also serve as a high goal for the active worker to work hard to achieve. Though the hours and years of working may seem long, if a worker knows that he or she will be able to not have to work one day and still receive money, working becomes more worthwhile. To ensure that the retired worker is adequately compensated so that they have the means to give back to their community, pensions offer the financial support needed for the retirees to remain active participants in contributing to the local economy. Finally, these influential pensions not only secure the lives of the retiree but also serve as a safety net for the worker's spouse should an unforeseen tragedy happen to the worker that caused him or her to die.
In order for a pension to be successful, there are certain values and characteristics that should be met. Any responsible pension fund should be invested in mostly low risk, low return, and long term investments. Only a small portion should be allocated for high risk, high return type investments. The goal of any pension fund should be to reward the retired worker more than the investment banker who manages it. Furthermore, all investments should be public knowledge and easily available to all pension fund participants to ensure fairness, cooperation, and happiness for all.
There are many current trends that are also impacting pensions. Most influentially, the stock market crash of 2008 affected them dramatically due to overall losses in the stock market and new government regulations created as a result. Boilermakers have tripled their pension contributions in the five years since to adjust. With recent record high stock market numbers, pension funds are doing well since the crash but have suffered such large losses that it will take a long time to fully recover, both on the personal and business level.
If I were the administrator of a pension plan, I would ensure that all investments would be adequately researched and full disclosure of the finances would be given to all participants. It would be my goal to make money for the customer and therefore I would do everything in my power to give as much security as possible to all the Boilermakers that have been working so hard their entire lives for this money. It would be important to me to make sure that all finances are fair and held to the highest ethical standards and that everyone is pleased with what they are going to receive after they finally get to retire. The most important aspect of a pension is cooperation and harmony between those working hard to receive money and those in charge of investing this money and creating the pension plans.
by Ryan Younge
There are many reasons why pensions are important to our society.
# 1 First of all it is important to point out that pensions are one of the biggest assets you will accumulate in your life. Depending on how they are set up, pensions are something that you work towards investing in each and every week or month . Retirement should be met with excitement and in order to do this people need to prepare to retire comfortably.
# 2 Second of all, it is important to note that pensions are critical as they work to provide a safety net for families as they get older. We are well aware that poverty is a prevalent issue in society today. Many older families face poverty due to the fact that they have not saved enough through their lifetime to meet their basic needs.
# 3 Pensions will help support you in your later years and ensure that you can maintain a good standard of living that you are accustomed to. Persons without valuable pensions tend to work longer than they would normally aspire due to the inability to afford retirement.
# 4 Pensions are important also due to the fact that pensions are designed to take care of those that you love if and when you become deceased. Pensions are not just about taking care of you -they are about you being able to provide for those you love once you are gone.
# 5 Finally, as financial insecurity of the economy lures on the cuff of our society, workers who have pensions to rely on can gain a sense of comfort and ease knowing that the financial sacrifices that they have had to endure over the course of life will be reaped in the realms of retirement benefits.
Some of the core values and characteristics of pension plans includes quality of work that is provided by the people who make a company successful. In addition to this communication is key to employees that is demonstrated in a manner that is open and honest. Furthermore another core value is based on advice that is championed by accountability and risk management. Finally another core value of a pension is integrity that is based on providing opportunities and solutions provided to employees.
There are many trends that will continue to affect pension plans for generations to come. As most of us are aware, Canada is an aging society. As our baby boomers reach retirement we will see an increase strain on our public pension system. The reverse of this is true as well . In more recent years, we have seen a m or decease in our birth rate and this will affect the contributions rates in years to come. The economic instability of our Country also impacts pension plans as well. The downward spiral of stocks has had huge impact on public pensions along with employer sponsored pension plans. Another problem is the employer sponsored pension plans are not plentiful due to the fact that they are met with increasing obligations on the part of the employer.
As leader of a company I would want our pension mission to he as follows.... "Promote retirement security for today and future generations through outstanding service and dedication."
by Shan Leung
A sliver of sun illuminated the snowy fields that morning. There was little movement amongst the snow, save for a long figure that trudged along at a slow, steady pace. After pushing his way into a clearing, he paused for a moment, dusting off the powdery snow which had begun to collect on his greying beard. John Doe had seen over thirty years in Canada, drawn to there by the promise of work and rumours of the gold which could be found there. However, the new land had met John with only misfortune and an accident had put his gold mining endeavours to an end. For the next twenty years he had scraped by on odd jobs, wandering around in search of work and by the turn of the twentieth century John was nearly fifty, quite old by the standards of the day. John knelt in the snow as he remembered hearing in his youth a story of how the Inuit would wander off into the snow when they felt old and useless; he remembered how foolish he had thought them to be. John let out a long sigh, his breath rising upwards as a wispy cloud of steam. He'd never thought he'd experience such terrible luck. With no work and no relatives in Canada to support him, John truly did feel useless. For a moment all was silent in the clearing and a lone figure could be seen hunched up in the snow, but then the wind blew again and began to obscure the shape with a powdery coating of snow.
While much has changed in Canada in the past hundred years, the needs of the people have largely remained the same. In the times of John Doe from the story; most people had to either rely on their children to provide support for them, or else had to work until they were no longer able. It was not until the Old Age Pensions Act of 1927 that the elderly would receive support from the government. The Old Age Pensions Act, and later, the Old Age Security Act have allowed seniors to retire without having to worry about relying on support from family members.
Pensions also allow seniors to enjoy a better standard of living. This not only benefits the pensioners themselves, but also relieves strain on the medical system, as seniors who are able to keep in good health are less likely to become ill and require medical support. In this way, pensions also benefit the families of pensioners who are not required to support their elderly family members. Through maintaining a good standard of living, pensioners will continue to purchase goods at a similar rate to when they were employed which contributes to the economy as well.
In addition to providing for the retired, some pension plans also have provisions for those who become disabled and unable to continue working. This is important as it allows such people to continue living without worrying as much about having enough money to pay for expenses. As pensions are paid into by the workers themselves, disability payments through pensions also put less strain on a country's welfare system.
Although the main purpose of pensions has not drastically changed since the time of their introduction, pensions are, like many other things, affected by changes in society and economy. A current trend affecting pensions is that the minimum age for collecting pensions is increasing, due to an increase in life expectancy and an increase in average age of Canadian workers. In addition to this, increasing amounts of Canadians are finding that they must continue to work past retirement age as their pensions are not sufficient to cover their expenses. With increasing cost of living more and more people must continue to work in order maintain a good standard of living.
A good pension should provide sufficient funds for retirees to not have to worry about expenses. However, pensions should also be balanced so as to not put too much strain on a worker's income. A pension should be like a well built house; it should have a good foundation and be thoughtfully constructed. It should be paid into during employment, and provide for the pensioner through retirement.
by Zachary Hawco
Pension plans are vitally important to our society. Unfortunately, many people fail to take advantage of these crucial financial instruments. Pensions are so essential to our society, pension funds are the largest source of investments in the western world and pump trillions into the private sector. People spending their pensions provide billions of dollars for the economy. Life expectancy rates are very high and are climbing, the population of much of the western world is aging and pensions allow older people to retire early and live comfortable lives. A good pension plan should provide a retiree with enough income to live out the rest of their lives, but it should not mean that they have to live without while they are working to pay for their pensions.
Firstly, pension funds hold the largest amounts of investible capital in the world. It is estimated that over seven trillion U.S. dollars lie in pension funds around the world. This vast amount of money can be invested in the private sector. Not only to grow the amount of money in each pension plan, but also to fuel the slumping world economy. The majority of jobs in the world are in the private sector, and investing a multitude of money into the private sector would create thousands, possibly millions of jobs which is especially significant with the current, shaky job market and uncertainty in our economy.
Secondly, a good pension plan provides retirees with disposable income. Rather than not spending any money out offear of poverty, retirees can enjoy their retirement and do things such as travel and pick up hobbies they were not able to do while in the workforce. In 2006, $358 billion of the economic output in the United States came from people spending money received through their pension plans and an estimated 2.5 million jobs were created through pension spending in America alone. This means if the amount of people with pensions is decreasing, job creation will also decrease as a consequence.
Thirdly, the life expectancy in Canada stands at 80.8 years old and in The United States, the life expectancy is 78.2 years. In 1920 the life expectancy in Canada was about 60 years. Evidently, the life expectancy rate in the Western World is growing rapidly, and with new advancements in health care, this rise is expected to continue. If people are living longer, this means they will need a better pension plan to cover their expenses for a longer period of time. Pensions now have to be stretched over a longer period of time than they did in the past, so why should pension plans stay the same even though people are growing older?
Also, the population of much of the Western World is aging. The median age of Canadians in 1956 was 27.2 years old, fifty years later in 2006 the median age in Canada was 38.8 years. If this trend continues and the population continues to age, there will be a much greater need for pensions as more people will be reaching the age of retirement simultaneously.
Finally, a pension should be a reward to retirees for their years of service and hard work. Retirees should be able to live out the rest of their lives in comfort and with dignity. Retirees should not be living in poverty or worrying about their fiscal matters. If people are more certain about their futures they will retire earlier, meaning their jobs will have to be filled by younger people who are looking for work or out of work in today's unimpressive job market.
A good pension plan should provide retirees with a sufficient amount of money to last them until their deaths. They should not have to worry about money and they should not have debt that will become a burden for their family after their passing. Though retirees should receive a bountiful pension, they should not have to suffer during their working years to pay for their pension. The responsibility of paying for the pension should not be placed on the individual alone. The cost should be shared among the government, the employer and the individual. When pension funds are pooled they should be invested responsibly and transparently, in other words people should have a say in how their funds are being invested and who handles them.
There are several trends impacting pensions presently. The growing amount of people reaching retirement age equates to more people requiring pensions at the same time. Also our population is aging meaning pensions need to be able to sustain a retiree for much longer than in previous years. People are opting out of pensions for programs such as 401(k) and related plans. Less people saving for pensions means less money in the pension pools. Uncertainty and fluctuations in the markets in recent years result in less money being made from investments as well as investors being less willing to invest pension funds in the market out of fear of another crash. Governments are also trying to find ways to combat growing deficits in their nations and as a result many people are feeling a blow in the form of cuts to their pensions.
Consequently, these trends that are impacting pensions call for updated mission statements for pension plans. A possible mission statement for a pension plan, which addresses these trends is; "All workers are entitled to a pension which satisfies their fiscal needs, from retirement to death. The burden of paying for pension will not be placed on the worker alone. The co-operation of the government, the employer and the workers themselves is essential to make a pension plan feasible. Investment of pension funds will be honest and straightforward and WILL NOT jeopardize the pension funds of the workers. With these regulations, an affordable, sufficient pension will be possible to obtain for all workers."
Furthermore, pension plans are imperative to our society because they provide money to retirees so that they may live the rest of their lives in comfort and dignity. As well, pension funds provide trillions of capital to be invested in global markets and kick start a global economic recovery. Though pension plans face many hurdles in today's economy, with people living to be older, larger amounts of people retiring and a lack of confidence in the markets, sufficient pensions can be achieved with pension reform and a new mission statement for pensions which takes all of these problems into consideration.