Jack Mintz is the Benedict Arnold of retirement savings

Too late
 
Calgary Herald
January 3, 2010
 
Re: "Don't panic on pensions," Editorial, Dec. 27.

I fully concur with your position on this issue. You and other media have, however, missed one of the key points in Jack Mintz's paper: "Retirement income adequacy depends not only on saving, but also on the investment performance of retirement funds." It is obvious that the amount of savings necessary to generate adequate levels of retirement income is reduced if there is an after-tax return of three to five per cent or more, rather than one or two per cent.

It is ironic that Mintz is the author of the current paper on retirement income adequacy, considering his earlier role in creating the false belief that income trusts caused tax leakage through the RRSP structure.

That belief was presented by the government as a key justification in getting rid of income trusts, a tool that millions of Canadians used to improve retirement income returns with no change in investment risk. In addition, many will recall that the tax change announcement in 2006 also caused a sudden drop in the net worth of retirement accounts that rivals the effect of the current recession.

If there is merit in improving the adequacy of retirement income, it is important to remember the investment return on retirement funds as well as the saving side of the equation. For the many Canadians nearing retirement or already retired, it is too late for the latter.

Clinton T. Broughton, Calgary

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