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DB Members Don’t Collect GIS

Canadian retirees with defined benefit pensions are far less likely than other retirees to collect the government’s Guaranteed Income Supplement (GIS), shows a study on the economic impact of DB pension plans. The study ‒ commissioned by the Healthcare of Ontario Pension Plan (HOOPP), the Ontario Municipal Employees Retirement System (OMERS), the OPSEU Pension Trust (OPTrust), and the Ontario Teachers’ Pension Plan (OTPP) ‒ confirms that an estimated 10 to 15 per cent of DB beneficiaries collect the GIS, compared with 45 to 50 per cent of other Canadian retirees. DB pensions reduce the annual pay out of GIS, a supplementary government benefit provided to low-income seniors, by up to $3 billion a year. It also finds that DB recipients contribute $14 billion to $16 billion annually to government coffers across Canada through income, sales, and property taxes. Bill Hatanaka, president and CEO of OPTrust, says “DB retirees can count on greater certainty in retirement with a stable monthly income based on the number of years they contributed to their plan, so they are more comfortable in spending what they receive, helping fuel the Canadian economy. Not only do they pay up to $63 billion annually for goods, services, and related sales and property taxes, they pay an additional $7 to 9 billion in income taxes every year.” Jim Keohane, president and CEO of HOOPP, adds that “most people aren’t aware that up to 80 per cent of the funds used to pay defined benefit pensions come from returns on plan investments. Canadians should look at how we can replicate this success story for those without adequate or, in many cases, any workplace pensions.”

Courtesy of Benefits and Pensions Monitor website News Alerts

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