Will your pension be there when you need it?

March 26 2008 by Ellen Roseman

You work all your life and pay income taxes, as well as contributing to Canada Pension Plan and Employment Insurance. So what do you get when you retire?

Some people are furious to find their income from government plans adds up to only $12,000 a year. They can’t live on that, so they have to keep working if they can. Not always easy.

And what about the workplace pension plan? You can rely on it for decent lifetime support under certain conditions:

–You have long years of service with the same employer.
–You have a defined benefit plan with automatic inflation protection.
–Your employer does not go out of business or merge with another.
–Your employer doesn’t switch in midstream to a defined contribution plan.

Under a defined contribution plan or group RRSP, employees have the responsibility to invest and manage their savings properly, while on the job and later in retirement. Is this fair?

Employees may have limited experience as investors. They may be given a limited selection of investments with high costs. And if they’re not forced to join the plan, they may just stay out altogether.

Here’s some of the input I got from Star readers on pensions and retirement income.

The end of customer service

March 18 2008 by Ellen Roseman

I happen to like scanning my own groceries, but I always feel like a traitor to the team. Will supermarkets eliminate human help as gas stations did? It seems like a dangerous trend to make customers do a cashier’s work and not pay them for it.

There’s a cover story in the latest Time magazine on 10 ideas that are changing the world. The end of customer service is on the list. “With self-serve technology, you’ll never have to see a clerk again,” the article says.

Companies love self-service for the money it saves. But why do consumers play along? Maybe the service we get is so minimal that we figure we might as well do it ourselves. Or maybe we’re in such a hurry that we can’t stand lining up.

I’d argue that the self-check-in kiosks at airports have actually improved our travel experience by cutting the waiting time. So have the self-serve screens at movie theatres.

Time cites a British experiment with machines that let customers not only buy merchandise on their own but also return it. There’s a chain of sushi restaurants in Malaysia with order screens linked to the kitchen — so much for waitresses. And a U.S. hospital will soon use check-in kiosks for emergency room visits. Simply touch the image of the human body where it hurts.

By adding all these new tasks to our daily routine, are we overstressing ourselves and reducing our quality of life? It’s an interesting debate. Just don’t expect to have it with a clerk.

This follows an earlier cover story in Businessweek magazine about consumer vigilantes. These frustrated folks use the Web and YouTube to get companies to respond to their anguished complaints.

Take Bob Garfield, a National Public Radio host, who set up the Comcast Must Die website. After repeated delays with his own cable TV service, Garfield suggested that customers post their account numbers on the blog. Dozens of customers followed his suggestion and many said Comcast called them back shortly after they posted their account numbers and rants. (This sounds like what I’m doing with Bloomex complaints here.)

There are also websites like The Consumerist that publish secret phone numbers and email addresses for executives that respond to high-profile customers and media personalities. Many companies are reluctant to talk about their executive customer service — or even to tell people that it exists. But The Consumerist does it here for Fedex and here for Microsoft.

If you’re at loggerheads with a big company, chances are I have a contact or can find one for you. So keep those complaints coming.

Wills for poor people

March 13 2007 by Ellen Roseman

After a Sunday series that focused on family fights about money, I got many comments and questions about writing a will. Here’s a letter from a reader about his dad’s will:

I have enjoyed reading your columns in the Star for years. As an accountant I think of myself as fairly financially savvy but I often learn new things through it.

In reading the Jan. 28 column, it strikes me that one situation that I have seen very little written about or discussed is the death of poor people. I guess this is particularly true because of my own involvement in such a situation.

My father passed away in September of 2003. He was 78 and lived alone on CPP, OAS and GIS. When he died, he lived in a cramped one-room apartment with less than $1,000 in his bank account and no other assets and just a small amount of credit card debt. I am one of seven surviving sons or daughters (two from a previous marriage that I have never met), and my mother predeceased him, so that made the seven of us his “next of kin”. He died with no will.

I found dealing with all the complications frustrating and complex. With no will, there is no executor, so it was hard to cancel things (phone, cable, credit cards, etc.). I did look into the Ontario Public Guardian’s office, but the paperwork and cost (more than his estate!) were simply way too involved to contemplate. And the thought of the complications I would have to go through in terms of searching for survivors also put me off.

In terms of his income taxes and estate return — again, legally, one must be the executor to complete — so in the end none of these forms were completed. (I have no idea what I will say to CRA if they ever come knocking about this.)

Luckily, my brother knew the bank manager at our Dad’s bank so we were able to close the account. Up to a year later I was still getting mail from places like Rogers about his account. I got tired of telling them he was dead, so I simply threw away the mail.