Chicago-Boys Legacy Welcome

The main objection of critics to the privatized pension plan in Chile is that some people either cannot afford to set aside 10% of their income to make contributions to their personal fund, or are not disciplined enough to do it when they are self-employed.

I am not sure that having no income is much of a barrier to establishing the plan, however. No income for an entire life? One can conceive of cases where individuals are severely handicapped or incapacitated, of course. There is room for exceptions, and they can addressed as such. But exceptions should not drive policy. Retirement is something that is typically earned, even now, and judges have not yet made it a right under the Charter in Canada. So let's hurry up and get a real pension plan before Arbour comes back modeling her Santa suit and kills all prospect of it!

The typical objections against the Chilean practice do not much apply to Canada. There are people who don't have a 10% disposable income to put aside in Canada, but that is largely because much of their income is already being taxed significantly. With a privatized fund, the feds would not longer grab CPP deductions for their slush funds. People would have more dough in their pockets to invest in their future.

People who are self-employed must still file tax forms in Canada, and we have enough of a paternalistic tradition that the state could compel them to do it. But that would defeat the purpose, unless it is done on a voluntary basis. We should give ourselves enough liberty for some us to choose to be wards of the state, if we so choose. Imagine having the choice to run your own pension plan rather than letting mommy Ottawa do it for you. Why not? Chile is doing it rather succesfully.

As to those who are under the radar of the economy, they might not at all be persuaded to return just with a pension plan anyway. So, WTH. But there may always be hope for them once the Liberals finish decriminalizing everything.