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.


  1. Lynn

    Mar 29 2008

    I’m in my early 30s and I put away as much money as I possibly can. I am not counting on any money from anyone when it comes time for me to retire.

    When I first graduated from university, I worked at a women’s clothing store. I remember we had a new salesperson, a 70 year old woman who had been retired after working at Eaton’s for 30 years. I guess their pension was spent by the company or something, her husband had a stroke and most of their money had to go toward paying people to come in and help her take care of him. Once the Eaton’s money stopped, she had no choice but to go back to work. I vowed that would never happen to me.

  2. Ryan C

    Apr 1 2008

    Nobody has a bigger vested interest in either my savings or my pension than me. Because of that I look for every way to maximise both. I’ve always looked after my DC pension and am thankful that it is portable unlike many DB pensions, thus I don’t feel the “golden handcuffs” tying me down anywhere – but thats another angle. If people don’t take an interest in these things, then I don’t think it is the employers place to push retirement or savings/investing incentives. Don’t want me to top up your DC pension? Don’t care? Won’t take the time to educate yourself on your future pension? No problem.

    On second hand, if I was the employer and an employee (particularly one that handled money/contracts/finance for my company) didn’t take advantage of “free” money given to the employee, I’d question whether I’d want to employ that person in the first place.

    Ryan C.

  3. Brian Poncelet, CFP

    Apr 5 2008

    Hello Ellen,

    With the new TFSA (tax free savings account), everyone with a pension or an RRSP should consider this as an extra source of income for future retirement. This of course depends on if you can.

    The old saying, “never keep all your eggs in one basket,” makes sense.

  4. CanadianRetiredGuy

    May 5 2008

    Everyone should avail themselves of Canada Revenue Agency’s Statement of Contributions Online Request page at:


    This will give one a projected payout at age 65 and will remove most doubt as to what to expect when the time comes. Free for the asking.