Book Reviews ‘P – T’

Pension Funds and The Bottom Line

Author: Keith P. Ambachtsheer

For each employee to value a retirement scheme as part of their overall compensation, they must understand it.

As society ages, there will be fewer workers to support each pensioner in the decades ahead. The productivity of labor and capital has to keep increasing, or else the standard of living we enjoy will fall. Pensions funds will play a large role in determining North American Living Standards. Companies have rules on how their pensions are managed. “Funds Goals: The Primary purpose of the fund is to secure the benefit promises made by the corporation under the terms of its pension plan to its former and current employees. Read More

Author: Geoffrey N. Calvert

The government uses the CPP as a cheap way to borrow money for roads and infrastructure projects.
“The CPP has become the backbone of provincial debt financing,” states its advisory committee, pointing out that in the four years to March 31, 1974, the CPP furnished 38% of all provincial borrowing. “A bloody rip off!” is how a highly informed non - government observer in Ottawa described this procedure. Whichever way it is viewed, it does not stand up to the normal tests of a pension funding operation. “ CHAPTER FIVE: The Public Pension Plans/ PG 85. I found out about this book on Pg 39 of ANN FINLAYSON’S WHO’S MONEY IS IT ANYWAY: The Showdown on Pensions. Geoffrey Calvert is a distinguished New Zealander turned actuary. He created a pioneering statistical data bank for the World Bank in Washington D.C.

Author: Monica Townson

The Canada Pension Plan is a major source of income for seniors and is being assulted by special interest groups that want it replaced with a privatized system.

The CPP provides full coverage, inflation protection and portable benefits. These are taxable and allow the government to recover some tax revenues. A reserve fund has been established to supplement contribution revenue. CPP legislation requires that the fund
maintain two years' worth of benefits just in case. A contribution to the CPP entitles you to a tax credit instead of a deduction. This results in taxpayers receiving the same tax benefit for the same amount of contributions regardless of income level.

"The CPP guarantees a retirement pension related to lifetime earnings and years of contributions to the plan. An RRSP or mutual fund investment does not guarantee any particular benefit."Read More

Author: Harry Weitz

The Canadian Pension system includes Old Age Security (OAS), Guaranteed Income Supplement (GIS), the Canada and Quebec Pension Plans(C/QPP), and the benefits for special groups. These apply to the entire population and are provided exclusively by the government. The depression of the 1930s undermined the public’s confidence in private pensions for old age workers. In 1935, the United States responded to the demand for a government retirement program and introduced the Social Security Program in 1935. Ottawa and Quebec were always at odds but on June 4 th 1964 they reached a historic agreement. Two separate plans, one for Quebec, the QPP and one for the other nine provinces and the territories, the Canada Pension Plan. The benefits would be transferable between the two and covered workers from the age of eighteen. After 1970, more plans were selecting age sixty-five as the normal retirement age. People are living and working longer.

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(a history by-) Author:  Duncan McDowell

Between 1910 to 1925 Royal Bank merged with five other banks. Always seen as Canada’s most progressive bank by rivals. The Royal Bank became the most skilled practitioner at the art of takeover. “Each acquisition served to fill another gap in his jigsaw of national expansion. Each piece brought a special regional advantage  greater reach into western farming communities, a fuller blanket of urban branches, or service to special niches in the economy.”

Chapter 4:  GROWTH THROUGH AMALGAMATION 1908-1925” PG 158. It was the first Canadian bank to reach assets of one billion dollars, to install a computer and to open a full service branch in Shanghai China. It was the only major bank to be listed in the first issue of “ The Financial Post’s 100 Best Companies in Canada. They also encouraged employees to share in the bank’s profits. In 1985 The Royal Employee Savings and Share Ownership Program was introduced. By the early 1990s, 85 per cent of Royal Bankers owned shares in their own bank. The segmented market resulted in the objective retail banking to provide a “cradle  to  grave's strategy. Tailor suited to saving, spending, investing and retirement needs throughout an individuals life cycle. Lots of photos from the late 1800s through to the nineties, this book is intimate, witty and educational.

Author: David Trahair, CA

The employees of the financial institutions know more about the products than you.

The big banks aren't in the business of securing your safe and joyful retirement. Their profits come from your pocket and in order to keep shareholders happy, it must always be maximized. Many products that are designed by their employees to be purposely complicated and confusing. Millions of dollars are pumped into slick advertising campaigns which create insecurity and fear. Retired people will be fishing or talking to a loved one about how confused they used to be. We then hear all about how an insurance company or bank solved all their problems and that's why they are now financially free. When it comes to buying insurance, term life will cost you several thousands of dollars less but whole life will be promoted first. After all, it makes the seller more money. What are the two major issues with RRSPs? How do mutual fund fees drain away your hard earned savings? Why are the statements issued to you so confusing? Why is a good idea to pay off your credit card debt as soon as possible? The second last paragraph on page 168 sums it up nicely. "Spend time educating yourself about investing." (Chapter 11: SUMMARY: WHAT YOU'VE LEARNED AND WHAT TO DO NEXT).

Author: Mark J. Heinzl

Anyone with a little education and experience can invest on their own.
When hiring a painter, drywaller or plumber, you'll have a good idea of the costs for parts and labor. You will also be guaranteed that the job will be done professionally and with the highest degree of integrity and quality. When it comes to investing, people are generally not as informed. Fees have a major impact on returns to investors. The higher the fees, the lower the expected return. Financial planners and advisors like fund products with yearly fees. This means bigger incomes for them and lower returns for you. They also aren't likely to share information that will help you make better informed decisions.

"Mutual fund companies rarely discuss individual stocks and companies in any detail, because they wouldn't want you to get too familiar with the names of companies in Canada and around the world. The fund companies don't want you to get the notion that you could buy these stocks on your own."Read More

Author: Donald Christensen - lives in New York City and is the co-author of "Investing with the Insiders" and publishes the respected newsletter "The Insider Outlook"

Many wealthy people have achieved success by collecting fees after convincing those with hopes and dreams to play and gamble in the speculative markets.

For the greater part of this century, a bank's role was to protect the saver's money while at the same time making loans to people and businesses that needed it. Depositors were protected from the complex world of finance and could go on and enjoy life without worrying about it. Following in the steps of the fund promoters, bankers also started manufacturing their own family of funds. They are using bank branches as distribution networks in order to sell them directly to customers. Compared with traditional fixed and guaranteed products such as government and corporate bonds, the profits margins on mutual funds are much more attractive. The popularity of these funds has allowed promoters to raise prices resulting in an increased bottom line.Read More

Author:  Philip Smith

The Huron & Erie Savings and Loan Society started up in 1864. Caution and financial conservatism symbolized the society’s mortgage loans. The money that was advanced to the borrower was less than one third of the value of the property given in security. One half of the cash value of the land was opposed as too risky. Farm property with thrifty farmers and a high quality soil located in prosperous areas. Being choosy reduced risk because the bank used information and assessment to make an informed and responsible decision about the deployment of its funds. Through a long series of mergers and acquisitions, Huron and Erie becomes Canada Trustco Mortgage Company in April of 1976. The name would be shorted to Canada Trust. The principles of savings and soundness, and long term planning allowed this company to thrive in the depression of 1929 and thrive in the cut - throat age of the big banks. Canada trust eventually falls prey to a takeover from a larger company.

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