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Originally Posted by Slava
No, it doesn't "seem that this money is about to start going into the same bucket as public sector plans...". That is just based on some guy writing a column and trying desperately to equate the two. The two are only linked in the sense that public sector employees contribute to CPP and as a result they would be eligible to collect. As far as I know the funds from unions and from CPP are completely separate, under separate management and have nothing to do with each other. I would change my tune if that was shown to be otherwise?
It's also a stretch to call this a tax. Is it a tax if your employer runs a DB plan on your behalf? They take money off your cheque and out of your control. You have a very similar arrangement with those plans as you do with CPP, and potentially they're taking money from your own retirement contributions to do that. How is that different?
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Well, this quote says that the connection between say, the Ontario Teacher's Pension Plan, and CPP is this:
https://www.otpp.com/documents/10179...b-73b504a72464
Quote:
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As a result, when you turn 65 (or when you begin receiving a CPP disability pension) your Teachers’ pension is similarly reduced on the portion based on your average salary up to the CPP maximum.
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So basically what it is saying that the more CPP you get, the less Teachers pension you get (not completely 1:1, but a reduction nonetheless). So now that everyone gets way more CPP, the payout from the OTPP is much less than before, and immediately reduces the liabilities of the OTPP.
A lot of other public pension funds have similar relations with CPP as well, which is what I believe the writer was going for.