IUOE News Spring 2014

Benefits Plan
Avoid the Retirement Lottery
Planning for your
retirement should
never be a game of
chance
Shawn Hatch,
Administrator
It seems that not a day goes by without a newspaper article
covering the retirement income crisis facing Canadians today.
Case in point: the Guelph Mercury ran an article in its
January 29, 2014 edition entitled “Maybe marry your boss—
and other retirement strategies”.
In this article the author sarcastically suggests that the only
way most Canadians can hope to have enough to live on in
their retirement is to marry their boss. The article goes on to
report that ING Direct has conducted a survey showing over
50% of retirees have had to return to work at inferior jobs
because they do not have enough to survive.
The article goes on to say that the Old Age Security, Guaranteed
Income Supplements, and the Canada Pension Plan
“…may keep away hunger or homelessness, but perhaps not
both at the same time. They’re designed to supplement a retiree’s
own savings and private pension plan”.
The problem is that only 25 per cent of private sector
employees have any kind of pension plan, and if they do, “it’s
usually a defined contribution plan, where the pension
amount is based on the market at the time of retirement and
the investment risk is borne by the employee. Imagine retiring
in late 2008, when many plans lost 30 per cent of their value.”
On February 3, 2014, the Toronto Star reported that a BMO
Financial group survey found that 40 per cent of those
surveyed were counting on an inheritance to fund their retirement,
while 34 per cent reported they were hoping to win the
lottery! As for the Canada Pension Plan, the survey reported
that 31 per cent intend to rely on CPP heavily—even though
the average CPP monthly payout is less than $600.
Waiting for that lottery ticket to pay off is no way to plan
for retirement. This shows just how bad the Canadian retirement
system is, and there does not appear to be any real
political solution coming anytime soon.
The Value of Union Membership
With union membership comes the opportunity to enroll
in our defined benefit pension plan.
The Operating Engineers’ Pension Plan is not one of those
unpredictable defined contribution plans the Guelph Mercury
article refers to. We invest for the long term, with the assistance
of expert financial advisors and investment managers,
and we strive to provide certainty regarding the benefit you
can expect to receive at retirement.
Moreover, under the current plan rules, 12 continuous
years of union membership immediately prior to your retirement
(i.e. without a suspension or withdrawal) will
significantly increase the value of your pension benefit. The
average monthly pension under the Operating Engineers’
Pension Plan, as of April 30, 2012 for members between the
ages of 60 and 64, was over $1,100, and many members receive
pensions far in excess of this average.
District 4 Members’ Representative Herb Conat performing the Oath of Obligation with Brothers Austin Roberts and Jason Hladchuk. Brother
Bohdan Dutka (far left) looks on.
24 News March 2014