Georgetti Responds to Recommendations of Financial Literacy Task Force

OTTAWA, ONTARIO--(Marketwire - Feb. 9, 2011) - Canadians need better government policy rather than lectures on how to save money, says Ken Georgetti, president of the Canadian Labour Congress. 

Georgetti was responding to the release of recommendations from the federal government's Task Force on Financial Literacy. "This report heaps blame on 'uninformed' individuals, and completely ignores the predatory behaviour of financial institutions. This is what we might have expected from a Task Force co-chaired by the CEO of Sun Life Financial and the Chairman of BMO Nesbitt Burns," Georgetti says.

Georgetti says that workers attended most of the Task Force hearings across Canada in 2009 but the report ignores their advice. "We told them again and again that expansion of the Canada Pension Plan is a far better savings option than RRSPs and the Pooled Registered Pension Plans proposed by Finance Minister Flaherty. They ignored us and hundreds of other people who made the effort to participate in the process," Georgetti says. 

"The Task Force wants the government to push individuals into the arms of the banks and insurance companies through automatic enrolment in retirement savings plans, and a built in escalation of contributions," Georgetti says. "Our researchers have crunched the numbers and we find that the Canadian financial sector charges management expense fees on RRSPs and other retail equity mutual funds that are among the highest in the world. I notice there is no recommendation in the report calling for greater transparency about management fees that soak up more than half of the money an individual invests in RRSPs."

Georgetti repeated the CLC's call for a gradual doubling of future CPP benefits. "Improving the CPP is easily the best way to provide for retirement security all working Canadians."

The Canadian Labour Congress, the national voice of the labour movement, represents 3.2 million Canadian workers. The CLC brings together Canada's national and international unions along with the provincial and territorial federations of labour and 130 district labour councils. Web site: www.canadianlabour.ca.