Quote:
Originally Posted by CliffFletcher
There’s a big difference between defined contribution and defined benefit pensions. And being able to negotiate with government to secure funding for pension fund shortfalls isn’t something the great majority of people are able to do. Very few private sector workers will have pensions as robust and secure as teachers. Even those who set aside as much money as teachers do. That’s just a fact.
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On the other hand, with RRSP matching or other employer non-pension plan retirement contributions, the money is actually yours. If someone on a pension dies early, their money funds other pension members. Whereas if someone with an RRSP dies, their heirs get it.
And it can be a considerable amount of money. I've done the math for BC, and if a teacher contributed their normal amount to an RRSP for the last 30 years and the employer matched even just 4%, they'd have about $1.3-1.4M in retirement savings with an equity/bond mix.
No, it doesn't have quite the security of a defined benefit pension (though you could probably pull out $40-50K a year inflation adjusted without any worry), but it's also a life-changing amount of money for your heirs if you happen to die earlier than normal.