Canadian Finance Blog

Posted: 14 Feb 2012 02:00 AM PST

As a young teacher I try very hard not to come across as a "know-it-all" to my co-workers. I work in a small school, and out of about 15 staff members, I am the only one under 40. When certain topics come up, it is very difficult to keep my mouth shut, especially when people are dead wrong! A situation like this occurred yesterday.

It all began when one of my co-workers (Staff Member A) brought up the fact that they had heard that the USA was looking at increasing the pension age to 67, and she stated this "fact" while visibly upset. Staff Member B quickly jumped in and stated that he had recently read that Prime Minister Harper was looking to kill the Old Age Supplement (OAS). This quickly degenerated into how crazy it all was and the politicians were all crooks etc. Maybe it was the head cold, maybe it was because I expect more out of people who are supposed to be educating our future leaders, but whatever the reason, I just couldn't take this banter any longer. So I stated in a calm voice, "If I could opt out of every single pension plan right now, including OAS, CPP, and our teacher's pension I definitely would. I would sign that away in 30 seconds without thinking twice."

This drew a lot of stares. As the youngest person in the room on a daily basis I guess I've become the representative for my generation by default. Here is the conversation that followed:

Staff Member B: "Why do you say that?"

Me: "Well, it's very simple, government-ran retirement was never meant to support a person for 30+ years. If you guys are this upset about possibly working a couple more years in order to make the pension fund solvent, then there will be nothing left for me. The bottom line is that people over 40 are the only ones voting, so I'm sure my interests will be kicked to the curb for the next few decades and I'm going to be forced to support your generation. I'd rather just worry about myself if given the choice," (Man, looking back, that sounds like a Ron Paul stump speech).

Staff Member C: "Well, we're supporting our parents right now, and we've worked damn hard for our retirement."

Me: "Ya, you've supported your parents, who had a life expectancy of 75-80. Also, there was way more of you than there are of them. Today's retirees are living 5-10 years longer, and the population pyramid just doesn't work anymore. Something has to give, either my taxes go up, current social programs get slashed, or you guys have to contribute a little more to the plan before you retire."

Staff Member A: "Well I don't know about all that crap, but I know I've worked too damn hard to work another 8 years!"

Me: "I know I work too damn hard to have the government steal all of my money. You all had better hope my generation doesn't just take its ball and go home. Anyway, I wouldn't worry too much, they will absolutely have to phase in an extended retirement age over time since it would be political suicide to piss off the tail end of the baby boomer generation and no politician would ever do that without softening the blow considerably. Plus, the OAS is NOT CPP. CPP is what you paid into, and there has been absolutely no mention of cutting that back. OAS comes out of the new budget every year. Why should someone earning 40K-100K a year be entitled to a further OAS 'top up?' "

Staff Member B: "It just doesn't seem fair that we've paid into this all our lives and now it's changing."

Me: "But the situation has completely changed. Actuaries had calculated your contribution amounts based on the idea that you wouldn't live that long after retirement, and the returns from the market would be higher than they currently are. Something has to give now that you're living longer and returns are lower."

Staff Member B: "Yeah, I don't pay attention to that politics stuff, I just want my retirement."

At this point I am absolutely screaming inside my head. It is no wonder our democracy appears broke beyond repair some days. I wanted to you yell, "You are not fit to teach high school students! Your head is so far into the sand, and yet your vote is worth as much as mine is?!" I'm fine with views opposing mine, and there are some good arguments out there that the pension age should not be raised, and that if we up our immigration levels everything can still work out fine, but to simply say, "I am part of the most privileged generation the world has ever seen, and I don't care about anyone else, I just want my retirement and I won't listen to anything different," really boils my blood.

Finally, after a semi-awkward silence, a fourth co-worker spoke up. Now this is a guy I really respect, and he is often the final voice at the table. Just one of those people filled with wisdom. He states, "You would even pull out of your teacher's pension? They get great returns, and are privy to investment options that you can't get as an individual investor."

I responded, "That's true, our fund does beat about 95% of mutual funds out there." At this point everyone around the table nodded their heads as they no doubt had read the brochures that our union sends out every quarter. Then I continued, "But they still trail their benchmark index by .5%."

"How could that be?"

"Where are you getting your information from?"

"You'll see when you're 55 how great our pension is."

The comments cascaded down and I basically just smiled and played it all off for the sake of sane relations going forward. I mean it really isn't worth it right? I'm not changing anyone's mind anyway. Then my stupid mouth kicked in again before I could stop it.

"Regardless of everything else, why am I not allowed to opt out of our teacher's pension if I want to? Isn't it somewhat against my rights as a free citizen to have my money taken from me on the basis that I don't know what to do with it and that someone else knows better? For that matter, why am I forced to pay into the CPP? Shouldn't there be a waiver I can sign that says I am not entitled to any of that money, but yet I don't have to pay any premiums? It just doesn't seem right that more and more of my money is taken at gunpoint every year."

Staff Member A: "What do you mean 'at gunpoint'?"

Me: "The tax man calls the cops, who have guns right?"

After this the conversation kind of died down and we all went back to teach the students that will eventually be responsible for my pension (now THAT is a scary thought). The more I thought about this conversation, the more I realized that the youthful support that Ron Paul is getting down in the Republican Primaries is really not all that unusual at all. My generation has a right to be scared. Very few of us vote, most of us gave up on government efficiency and democracy in general a long time ago. These negative citizenship habits just get reinforced every time we see our money gets taken from us by the bigger voting block that precedes us and we can see no end in sight.

The staff room I'm in is the logical conclusion of the cradle-to-crave "someone else please take of me" philosophy that we all seem to have embraced. Regardless of what political stripes you have, if you are never forced to truly be responsible for your own well-being, then you likely have no idea about what you're talking about and have never taken the time to become truly educated on the issues. If we were all responsible for our own retirement plans I bet more people would know what a benchmark index plan was, or just how important demographics are to the whole question of retirement age! Instead we put our collective head in the sand, stick our hand out and yell, "My piece is too small, give me more, I don't care who it hurts!"

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The Generation Gap originally appeared on Canadian Finance Blog on February 14, 2012.

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