The PEI Government plans are underwater by over 400 million with most new retirees retiring in the next 10 years. The market is not going to make up the difference. We live in different times. The pensioners cannot make up the difference. And the PEI Taxpayer - most of whom don't have a pension - cannot do this either.
Some facts. PEI Tax revenues are about $800 million a year. So $400 million represents about 50% of one year's revenue. Healthcare costs will rise to $800 million by the middle of the next mandate.
PEI cannot pay the $400 million for the government pensioners. And PEI cannot pay for $800 million of healthcare costs either. The next 5 years are going to be "interesting!". The contract that we all thought we had signed up for - pensions and healthcare will have to be broken.
So what does this mean to you if you are a pensioner. You will be pissed off for a start.
“The average pension is about $16,000 a year, which is not a lot of money. Our members aren’t living large when they retire,” she said
That’s why Bovyer says it concerns her to hear comments about taxpayers being on the hook for public service pensions.
She believes government wants to move from the current defined-benefit plan, to a defined contribution plan.
This is the only hope to get anything. You are going to have to take less. You are going to have to do what the rest of us are going to do - live in a different way.
And Ms Bovyer, $16,000 a year from investments is a lot of money. That represents well over a million dollars per person. How many Islanders have that in their savings?
So what does living in a different way mean? It need not mean eating cat food. But it does mean thinking like this:
- Do you need to live alone in a one generation household? Housing is your big expense. What abut your kids? The extended family is the unit that helped us all along before pensions
- What is your exposure to oil and heating costs? Have you insulated your home and done everything to reduce your energy costs. This is another big risk area.
- Grow food. You will have lots of time. Run chickens, grow veggies. Put in a hedge on higher food prices.
- Do you live in the country where you have to drive everywhere? A car is the single most expensive thing you own and it exposes you to oil price increases. You will also reach a point when you cannot drive. Live in town!
- Car share and help your neighbours - they will do the same for you
- The average male Islander becomes disabled from chronic illness at 65! He lives for another 10 years unable to cope on his own. Get well!!!!!!!!!!! BTW the average PEI woman follows this track 5 years later
This kind of living is not unfamiliar to many Islanders. It is just below the surface ready to come out again. If pensioners spend all their energy fighting the $ battles that has to be lost, then they lose everything. But if you work to help each other make this transition back to how your grandparents lived, a much better future for all lies ahead.
