To save or not to save, that is the pension

British Columbia has joined Quebec and the federal government in putting forward legislation to create pooled pensions that would help employees with no workplace pension save for retirement. This represents about two-thirds of B.C. workers, according to a news release issued Thursday by the province’s department of finance. However, the proposal in B.C. would make participation by employers optional, something critics say will reduce the intended benefits of the pooled pooled pension plans (PRPPs).

There are lots of reasons people do not save for retirement. Is the government's auto-enrolment programme tackling the real problem?

Felix Salmon pens an interesting couple of paragraphs:The fact is that a defined-benefit pension scheme is always going to run the risk that it won't be able to meet its liabilities as they come due. The California pension plans constitute an attempt to save hundreds of billions of dollars to pay for the pensions of the state's workers; the attempt might succeed, or it might not.

Alberta has become the third province to introduce pooled pension legislation to help Canadians save for retirement, but, as in neighbouring British Columbia, employers without an in-house pension plan will not be obliged to offer the inexpensive pension option to employees. Some pension experts say the plans won’t be effective in closing gaps in retirement planning unless they are mandatory on the part of both employers and employees.

A few days a go a federal judge sided with the city of Stockton, validating its bankruptcy. See Judge Rules Stockton CA Bankruptcy is Valid, City Acted in Good Faith. Bondholders screamed, but the ruling made sense. What did not make sense (except from the point of view of politicians protecting their own undeserved pensions), was that Stockton defaulted on other payments it kept funding CalPERS (California pension obligations).