Attempts to enhance the Canada Pension Plan (CPP) failed this week as Ottawa decided to kick the can down the road and wait for the economy to improve before making any changes to contributions and benefits.  Provinces are now looking into their own solutions, including a voluntary pension option.

The current average CPP payment to retirees is $7,234.32 a year and the maximum payment is $12,150.   Meanwhile, just one-quarter of Canadians made RRSP contributions last year, even though two-thirds don’t have a workplace pension plan.

RelatedLet’s play necessity Tetris: Retirement income edition

Confronting our pension failures.  That’s the premise of a new book titled, The Third Rail, written by Jim Leech, CEO of Ontario Teachers’ Pension Plan, and Jacquie McNish, a senior writer at the Globe and Mail.  The book showcases examples from Holland, New Brunswick, and Rhode Island, as places which have adopted pension reform to fix their broken pension programs.

The authors argue that, unless immediate action is taken to reform our inadequate pension system, retirees will find themselves in financial limbo and taxpayers on the hook for soaring elderly support payments.

I’m reading the book now, and it’s fascinating – as far as arguments about pension reform go.  A definite must-read for Canadians who care about workplace pensions and the long-term health of our pension system.

The book publisher sent me an extra copy to give away, so if you’d like a chance to win a copy of this book, just leave a comment at the end of the post.  I’ll close off the entries on Thursday December 26th at 5:00pm EST and announce the winner on December 27th.

Weekend Reading

Now let’s take a look at some interesting personal finance articles, videos, and podcasts from around the web this week:

1.  We recorded episode six of the Because Money video podcast this week, where we discussed small business finances and why it’s so hard to separate your business from your personal finances.  We also touched briefly on charitable giving and some reasons why Canadians are Scrooges when it comes to donating money.

2.  Mark Seed from My Own Advisor was on the More Money for Beer and Textbooks podcast last week talking about some of the mistakes he made when he first started investing, which included high MER mutual funds and investing in penny stocks.

3.  Speaking of My Own Advisor, Mark featured me in his investing series titled, What’s in your portfolio?  Check out what I had to say about my investing goals and strategy, as well as some advice for other investors using a similar approach to me.

4.  CBC’s Amanda Lang looked at ways the financial system is rigged against you in this video that aired on The National.

5.  Dollar cost averaging has long been touted as the best way to invest your money, but what if you have a large lump sum – like from a year-end bonus?  This article on Canadian Business says that the odds favour investing it all right away.

6.  The Globe and Mail’s Rob Carrick lists his nine favourite investing websites.  All solid resources that should be bookmarked on your computer.

7.  Canadian Couch Potato Dan Bortolotti says it’s the possibility of achieving market-beating returns that keeps investors away from a more sensible, passive approach.

8.  Why do academics always talk about risk-adjusted returns?  Mike Piper explains why risk-adjusted returns matter over on his Oblivious Investor blog.

9.  Another investing question answered – this time about whether stocks become more or less risky over time.  Michael James has your answer.

10.  Big Cajun Man argues against a claim that the government is losing money by allowing the TFSA program to continue.  What’s your take?

Christmas break

We’ll be taking a break from our regular Monday and Wednesday posts next week to enjoy the Christmas holidays.  We’d like to wish you all the best over the holiday season, and we’ll see you back here next Friday with some final thoughts on the year 2013.

Don’t forget to leave a comment for your chance to win a copy of The Third Rail.

Thanks for reading, and have a Merry Christmas!

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