Category Advocacy

Nortel pensioners’ annuity vs. commuted value decision: Current thinking in personal context

In a Nutshell Just passed the half way point in the Nortel annuity vs. lump sum decision, it’s time to review my current thinking on my personal decision. Prior to receiving the option letter I was heavily inclined to take the commuted value (lump sum) if it was reasonably close to the actuarial fair value, […]

Expanded CPP agreement reached- in principle

In a nutshell The expanded CPP is a key element addressing Canada’s pension crisis. Proposed level of expanded CPP is acceptable, but the 49 year phase-in period makes addressing other problems of Canada’s retirement income system urgent. Needed changes include: higher savings rates, low-cost accumulation/decumulation vehicles, longevity insurance, fiduciary level of care/advice for all retirement […]

Don Ezra’s “Most people need longevity insurance rather than an immediate annuity” (A review)

 In a nutshell  Ezra argues that the vast majority of retirees will be better of purchasing a longevity annuity rather than an immediate annuity.  He opines that “the so-called annuity puzzle is not a puzzle…(but) if longevity insurance were widely available but still shunned, then that would indeed be a puzzle for social scientists to investigate.” […]

Will that be annuity or lump-sum?

In a nutshell The annuity vs. lump-sum decision is explored as a function of lump sum offered. Qualitative and quantitative considerations are reviewed, as well a tool is provided to allow consideration of: the required break-even return rates and stock allocations under various conditions, the impact of age when 60% (survivor benefit) kicks in, and pensioners’ […]

Hot Off the Web-October 22, 2015: Pensions and Retirement Income (incl. Nortel’s Canadian pension update)

Contents: Nortel pension update, USSteel/Stelco reaffirms no private sector pension protection in Canada, ORPP or CPP- putting all the eggs in one basket? actuarial delusions? target-date funds glide-paths still not right- it depends, Vanguard: next 10 year 60/40 portfolio return expected in range of 3-5% real, income replacement ratio is not target retirement metric, fiduciary? […]

On-track to retirement? Objectives, plans and feedback to align: savings rate, retirement age, and expenses

In a nutshell An annually exercisable feedback mechanism in tax-deferred retirement accounts (e.g. 401(k), IRA or RRSP) is provided to assess whether a pre-retiree is on track to achieve financial objectives for retirement and identify corrective steps required to align plan execution and expectations. Shortfalls to objectives can be eliminated by adjusting: annual savings-rate, retirement age and if necessary the planned retirement […]

Input to Government of Canada request for consultation on voluntary CPP

In a nutshell The Government of Canada has recently announced a call for “Consultations on a Voluntary Supplement to the Canada Pension Plan” . The deadline for inputs is September 10, 2015 and the contact information is provided in the link. If you are opinionated on this important subject, please do so before the indicated deadline. […]