Should Canada introduce a compulsory personal savings plan?

[Machjo]

To replace the OAS and any other similar plan, should Canada introduce some kind of compulsory personal savings plan?

I could see it as a plan that you could use:

1. on education for yourself or anyone else you want,
2. To cover essentials in hard times,
3. To access once retired, and
4. under certain other circumstances such as during a nationwide economic depression or other serious economic collapse.

The advantage I see with this is that because it would be a personal plan, we would not have to worry about others taking our money since each person would be investing into his own personal savings plan. This would eliminate the immigration issue regarding the OAS altogether.

Any thoughts on this?

I personally voted yes in the poll. To be fair, I do think the government has a duty to ensure all have a chance to work of course, and it should take care of those who can't. That said, I don't see why we could not impose a compulsory personal savings plan on all who work in Canada, even if they are foreign workers. We could possibly even make arrangements with other countries, whereby if it's a foreign worker from a country that has no compulsory savings plan, then when he leaves Canada, well, we'd have to make a decision as to whether we force him to keep his plan in Canada until he retire or spend it on education or one of the other requirement, or whether we simply give them all their money back, or whether we exempt foreign workers from this compulsory plan altogether. For countries that have a compatible plan, we could allow the person to amalgamate his plans, whether he's a Canadian working in that country or a foreign worker in Canada. This would also help us to deal with Canadian working abroad for many years and not saving anything, a problem other countries likely face and would appreciate cooperation on this. Such a plan would be very versatile and transportable since after all it would be a personal savings plan you yourself paid into.

Any thoughts on this?

 

[damngrumpy]

The reason I say no is because there are thousands of people out there that will never
save anything. Addicts, chronic alcoholics, drifters, and others who we will never be
able to collect from. We are having a hell of a time collecting taxes from some people
let alone those who will never pay. You can't force people to save and have an equal
playing field. Think of how much it cost to administer the gun laws and long gun
registry and that is a miserable failure. There are more guns buried in back yards than
we can shake a stick at.
The only way to get people to save, in the mainstream is through setting an example
when the child is young, and encouraging them to save. And secondly teaching it in
the schools the importance of saving. You will never be able to enforce the savings
as more and more people will work underground like they are now.

 

[Machjo]

The reason I say no is because there are thousands of people out there that will never
save anything. Addicts, chronic alcoholics, drifters, and others who we will never be
able to collect from. We are having a hell of a time collecting taxes from some people
let alone those who will never pay. You can't force people to save and have an equal
playing field. Think of how much it cost to administer the gun laws and long gun
registry and that is a miserable failure. There are more guns buried in back yards than
we can shake a stick at.
The only way to get people to save, in the mainstream is through setting an example
when the child is young, and encouraging them to save. And secondly teaching it in
the schools the importance of saving. You will never be able to enforce the savings
as more and more people will work underground like they are now.

For the salaried, their old age contribution is already being automatically deducted. It's just a matter of doing the same thing but at a higher percentage, but then putting it all into his own personal account, each person with his own account.

As for drug addicts and others, well, first off we help them get off the drugs. Failing that, we'll probably witness them die from illness at a younger age anyway, and if they do manage to live long, then all they get is room and board, and we leave it at that. They are usually a smaller percentage of the population anyway.

As for taxes from the poor, if we're no longer providing as many services to them, then we don't need as much in taxes anyway.

 

[lone wolf]

How about the folk who don't earn piddlepots full of money - an ever increasing number in our call-centre economy? Have you ever tried putting the extra cash you just never get aside?

 

[Machjo]

How about the folk who don't earn piddlepots full of money - an ever increasing number in our call-centre economy?

Good question. I suppose one solution could be to introduce something like this:

Co-determination - Wikipedia, the free encyclopedia

This could give them a chance to negotiate higher salaries potentially. Another possibility could be to increase government funding for education and shorten summer and winter holidays so as to increase the amount student learn, but also make education more relevant to skills they could sell on the market.

Without a doubt we do have a responsibility to ensure all receive the education they need to succeed. It's a fine balance. We need to help them get on their feet, yet ensure they take responsibility too. Again, this is where I think social corporatism finds a nice balance between capitalism and socialism, or between compassion for our fellow man and personal responsibility.

How about the folk who don't earn piddlepots full of money - an ever increasing number in our call-centre economy? Have you ever tried putting the extra cash you just never get aside?

Also, I don't think the solutin necessarily always lies in giving the poor more money, but rather by stabilizing the economy and giving them more opportunity. For example, military spending also contributes to national debt, higher inflation and interest rates, etc. all of which hurt the poor. Establishing some kind of international police force for example could help to pool national contributions to a single military force thus saving all of them more money, or some other imaginative means of saving money on all fronts. Of course there can be no sacred cows. If we expect the left to cut its pet projects, then the right must too.

 

[lone wolf]

If you're going to increase government funding for education and establish international policing, you've just found a home for all that tax money you just promised was going to be saved by getting rid of OAS.

 

[Machjo]

If you're going to increase government funding for education, you've just found a home for all that tax money you just promised was going to be saved by getting rid of OAS.

Perhaps. Honestly, I don't think we can afford tax cuts at this time, even if we did reduce government spending, so that's a non-debate in my mind. The question though is how to spend money more wisely while avoiding even the impression of people exploiting the system, such as older immigrants. I figured that focusing any socialist element on public education is more palatable since it finds a healthy balance between the socialist idea of compassion and the capitalist one of personal responsibility whereby we fund their education but they must still study, one aim of that education being to learn a trade or profession so as to become a contributing member of society. As for old age security, well, that's more of a hand out requiring no reciprocal effort, unlike in education whereby we fund the education but they must still study. It's a matter of teaching a man how to fish rather than giving him a fish.

As for old age pensions, that I think should be an individual responsibility. Again, if we want the compassionate socialist side to present itself here, then a compulsory savings plan would essentially protect those who don't know or lack the motivation or circumstances to save on their own, while still maintaining the capitalist idea of personal responsibility to work and fund their own savings plan.

This is why I tend to prefer some form of social corporatism over socialism, since it finds that right balance between the two extremes, ensuring compassion, ensuring a kind of welfare state whereby the government does help the most needy and vulnerable, yet does so in such a way as to help them via their own efforts.

Now I could also see some kind of compulsory charity plan of 10 or so % of income too, and if you don't contribute to a charity, then the government takes it to help the poor. I would limit it ot charities that meet certain criteria of course. This would help the poor at the grassroots while avoiding government bureaucracy to some degree.

 

[damngrumpy]

The problem is that most people in this country already live pay check to pay check.
Most could not survive beyond three weeks if they lost their job. We would also be
assuming that everyone has disposable income. Many young people are paying off
student loans and trying to live on what they have. We would have a new class of
poor. Then we are also going to punish people who have a savings plan. And
believe me we are not going to get away with cutting services to the poor, this nation
goes along with that for short periods but Canadians have a very deep social conscience.
I am not saying we shouldn't try to get people to save money, but we must not try a one
size fits all policy. We have tried that with other things and it never works somehow.
We have this notion that everyone is the same in the country.
I know all kinds of people who will never save a dime. I have even seen a few who ended
up with money, that came their way. Normal people not addicts or drunks or other baggage
who got money and within a very short time they were just as broke as ever. The problem
is not saving money it is knowing how to manage it and when to spend it.
Even people who know how to make it run into problems.
This is both an education and a social issue and not easily solved. If you were to force me
to save money at a percentage of income, and I was poor, I would then work under the table
to avoid it in order to survive. There in lies the problem, we can't enforce it, we can't be sure
we are collecting it and the biggest problem would be, I doubt we could get consensus from
the population at large and a law is not successful if people don't support it. The long gun
registry is a prime example.I should clarify when the public does not support a law over a
long period of time.

 

[El Barto]

The problem is that most people in this country already live pay check to pay check.
Most could not survive beyond three weeks if they lost their job. We would also be
assuming that everyone has disposable income. Many young people are paying off
student loans and trying to live on what they have. We would have a new class of
poor. Then we are also going to punish people who have a savings plan. And
believe me we are not going to get away with cutting services to the poor, this nation
goes along with that for short periods but Canadians have a very deep social conscience.
I am not saying we shouldn't try to get people to save money, but we must not try a one
size fits all policy. We have tried that with other things and it never works somehow.
We have this notion that everyone is the same in the country.
I know all kinds of people who will never save a dime. I have even seen a few who ended
up with money, that came their way. Normal people not addicts or drunks or other baggage
who got money and within a very short time they were just as broke as ever. The problem
is not saving money it is knowing how to manage it and when to spend it.
Even people who know how to make it run into problems.
This is both an education and a social issue and not easily solved. If you were to force me
to save money at a percentage of income, and I was poor, I would then work under the table
to avoid it in order to survive. There in lies the problem, we can't enforce it, we can't be sure
we are collecting it and the biggest problem would be, I doubt we could get consensus from
the population at large and a law is not successful if people don't support it. The long gun
registry is a prime example.I should clarify when the public does not support a law over a
long period of time.

Totally agree.
To add tho anyone with a low income shouldn't have credit cards. On the same note something should be done about how the credit cards are gouging into ones financess by the exorbant percentage rates. The buy now pay later store plans should be outlawed.
Sorry to say but people are stupid. With this low mortgage rate young couples buying thier first house go for the biggest they can get. Up to thier chin in payments and don't seem to derprivethem selves with much as most have the state of the art tv and soundsystems and so on too.
If you are going to set a plan like that , then you are going to need a debt plan too , limiting how much on can be indebted.
To me this should be taught at school , right next to math and reading.

Any programs or laws you make will cross the line in personal rights. Tho simular things have been done too as in smoking laws. Where the smoker is a burden on everyones health, one could say someone overly indebt could be a burden on the economy.....just a thought.

 

[Liberalman]

no because of Canada pension plan

 

[TenPenny]

After a while, I tire of the government mandating every aspect of my life.

I'll decide how I want to save, and how much, thanks.

 

[JLM]

No, as a supposedly free country there's not much that I feel should be compulsory, on the other hand a savings plan for this purpose could be put in place and anyone who chooses NOT to contribute to it should sign a waiver stating that they would NEVER go to the Gov't. for help in time of need.

 

[TenPenny]

No, as a supposedly free country there's not much that I feel should be compulsory, on the other hand a savings plan for this purpose could be put in place and anyone who chooses NOT to contribute to it should sign a waiver stating that they would NEVER go to the Gov't. for help in time of need.

I don't see anything wrong with that; mind you, I've been saving for my own retirement since I started working.

That's also exactly what I feel should be done with the Wheat Board - allow farmers to opt in or out, with the proviso that they have to live with the concept of a free market if they opt out.

 

[wulfie68]

Another No vote here for pretty much the same reasons:

- too many people don't have the disposable income to do this
- isn't this what EI & CPP contributions and for that matter the entire "social safety net" are SUPPOSED to be for?
- I don't want the government telling me how or when I must or must not save money that I have earned

I used to max out my RRSP contributions every year and that has started a nest egg (I still contribute what I can) and the tax deduction is a great way to encourage this type of saving. I also agree with Juan that we need to teach financial common sense in school because too many people aren't as responsible(?) as my parents were when they taught me some of the basics such as determining wants vs needs, whether or not you can afford your wants and just some basic savings and investment thoughts. People complain about not being good with numbers but this isn't about numbers as much as some good rules to live by.

 

[taxslave]

CPP is a compulsory savings plan. It is also the only way it can work, taken off your paycheque. Most people have neither the will or the after tax money to do their own. Anyway what can you do to those that blow their money without contributing? Fine them?

 

[#juan]

If a man and wife work and contribute to CPP for forty years, they will have a combined income of roughly $2300.00 per month. If this couple's home is paid off, they are not going to be desperate. If they have saved $40,000.00 over the last twenty years, they should be quite comfortable. Should that savings be compulsory? No. It should be up to the tax payer.

 

[JLM]

Another No vote here for pretty much the same reasons:

- too many people don't have the disposable income to do this
- isn't this what EI & CPP contributions and for that matter the entire "social safety net" are SUPPOSED to be for?
- I don't want the government telling me how or when I must or must not save money that I have earned

I used to max out my RRSP contributions every year and that has started a nest egg (I still contribute what I can) and the tax deduction is a great way to encourage this type of saving. I also agree with Juan that we need to teach financial common sense in school because too many people aren't as responsible(?) as my parents were when they taught me some of the basics such as determining wants vs needs, whether or not you can afford your wants and just some basic savings and investment thoughts. People complain about not being good with numbers but this isn't about numbers as much as some good rules to live by.

Good post Wulfie- Many times new laws/regulations are redundant and we are not putting to good use what is already in place. (C.P.P.) increase the compulsory contribution commensurate with inflation.

 

[Machjo]

No, as a supposedly free country there's not much that I feel should be compulsory, on the other hand a savings plan for this purpose could be put in place and anyone who chooses NOT to contribute to it should sign a waiver stating that they would NEVER go to the Gov't. for help in time of need.

Hmmm... that's clever, actually. It would put a person on the spot too. for instance, a person who simply does not make enough money to save the required percentage might go to the government office to sign the waver. At the office, they'd ask him why of course, and if he says it's because he's haing a hard time paying the rent, then they'd realise even if he does sign the waver, he'll likely end up on the streets the moment he needs help. In that case, before letting him sign, they could offer him some alternatives, help him find more affordable accommodation, etc.

Now, I'm not saying the government should spend tons of money building social housing. Rather, it should look at deregulating the housing market so as to eliminate any bureaucratic restriction to the building of micro-apartments, dorm buildings, etc. I'm sure some of the poor would appreciate that. Now of course some local residents might oppose that and want to impose NIMBY-ist bylaws. At that stage, we need to accept that while we have no right to government services, the government has an obligation to remove any artificial obstacle to us. So if a local community decides to pass NYMBY bylaws thus making it harder for construction companies to build less expensive accommodation, the poor ought to be allowed to sue that local government. At that stage, I'm sure the locals would rather let the free market handle this rather than pay exorbitant taxes to pay for all of these lawsuits. In that case, such NYMBY laws would help the poor since they could then sue the government to get enough monthly compensation to afford the housing that the bylaws allow.

Once such a law is in place, local governments would be quick ot deregulate those aspects of the housing market that hurt the poor.

That said, we also need to fight usury, and that means prohibiting us from lending money a interest to people below a certain wealth bracket, while giving us the right of course to ask for proof of assets before giving a loan. This would make it harder for the poor to go into debt in the first place, and again the construction industry would respond to the free-market demand for smaller apartments near people's work, or even dorm-style housing for the poorest of the working poor.

Not helping the poor is one thing. Hindering them through NYMBY laws is another issue altogether. We can't have it both ways by passing local NYMBY bylaws and then blaming the poor for bein homeless.

If you're going to increase government funding for education and establish international policing, you've just found a home for all that tax money you just promised was going to be saved by getting rid of OAS.

Just to clarify something about international policing: while it's ture that increased education funding would mean more governemnt spending, an international police force would eman LESS government spending since unlike with national military forces, multiple countries would be funding it together, and so unlike the situation now, they could all pitch in their chare to maintain this force rather than have each country have to maintain its own.

 

[winniethepooh]

Heck no - we don't need any more legislation, least of all to force people to save.

 

[ironsides]

What a ridiculous idea, just another example of government saying you cannot take care of yourself. Next they will be tucking you in at night.