Frank’s Facts & Funnies – 16-08-03
Hi everyone.
The transfer lists this week are for Inspectors with three of them being promotional to Superintendent.
Under our Veterans’ news section we start with two job opportunities the first is at Richmond Detachment, copy attached, for a Court Liaison Officer and it closes on August 8th, 2016. The second job opportunities are with Commissionaires BC in Burnaby, for Public Service Canada, copy attached. The Quarterly has conducted a readership survey, copy attached, in their efforts to meet the interests of their readers. We received another letter from the President of the RCMP Veterans Association about the upcoming AGM and we also received an update from the Nova Scotia Division who is hosting the 2016 National AGM on a Cruise ship. Lastly we have a request to locate a member who at one time was living in Nelson, BC.
The media stories start with concerns expressed by Senator Colin Kenny about the morale in the Force. Without a pay raise in a while, workload issues as well as uncertainty about member representation there are a lot of issues for the members to be concerned about. While the next article is about the Canada Child Benefit it also wonders if the model of income testing may next be used to pay for future health care plan changes. The last media story provides strategies to consider for dealing with a low interest environment.
I close with my usual selection of “lighter stories” for your reading enjoyment.
Cheers.
Frank * * * * This Week: A) Transfer List – 16-08-03 B) Transfer List – 16-07-27 C) Passing the Torch D) Veterans’ News 1) Job Opportunity – Richmond Detachment 2) Job Opportunities - Commissionaires BC is Hiring 3) Quarterly Readership Survey 4) RCMP Veterans Association Annual General Meeting 2016 5) Beyond the Way – RCMP Veterans’ Association AGM 2016 6) Finding a Retired Member E) Loyalty battles with reality as Mountie morale dips F) New Canada Child Benefit could serve as model for health-care reform: report G) Four retirement strategies to counteract miserly bond yields H) And now for the lighter side! * * * * A) Transfer List – 16-08-03
The following transfers/promotions are approved:
O.2280 Insp. C. W. Chrustie From: “E” Div., CROPS Federal Serious and Organized Crime Major Projects, Surrey To: “E” Div., OIC Federal Serious and Organized Crime Major Projects, Surrey (Supt.)
O.2864 Insp. S. L. Talbot From: “K” Div., OIC Critical Incident Program, Edmonton To: “K” Div., OIC Integrated National Security Enforcement Team – North, Edmonton (Supt.)
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O.2268 Insp. J. Dowling From: “H” Div., Management Admin Services Officer, Halifax To: “E” Div., Traffic Services Commander, Kelowna
O.2880 Insp. J.T. Mclachlan From: “E” Div., Traffic Services Commander, Kelowna To: “K” Div., OIC Critical Incident Program, Edmonton
AUTHORIZATION SIGNATURE:
Supt. Forrest Spencer Acting Director General, Executive/Officer Development and Resourcing * * * * B) Transfer List – 16-07-27
The following transfers/promotions are approved:
O.2760 Insp. P.A. Cahill From: “B” Div., OIC Major Crimes Support Services, St. John’s To: “B” Div., Administration and Personnel Officer, St. John’s (Supt.)
O.2649 Insp. G.A. Woolsey From: “K” Div., OIC Team 1, Serious and Organized Crime South, Calgary To: “K” Div., Assistant District Commander, Southern Alberta District, Airdrie (Supt.)
O.2928 Insp. M.J.J.-J. Bedard From: National Div., Operations Officer – Team 2, Sensitive and International Investigations To: National Div., Travel Officer, Prime Minister’s Protection Detail
O.2679 Insp. N.M. Cross From: “E” Div., OIC Sea-to-Sky Regional Police Services To: “F” Div., OIC Departmental Security, Regina
AUTHORIZATION SIGNATURE:
Supt. Forrest Spencer, Acting Director General, Executive/Officer Development and Resourcing * * * * C) Passing the Torch
Glen Childs - It is with great sadness that I pass on news of the passing of Glen Childs on Sunday, July 17. A celebration of life will be held at the Sherwood Park United Church, 20 Fir Street, at 10:00 am Saturday July 23. Glen was the Photography Section at CDLE, was one of the original organizers of Robbies and attended almost all of them all. He will be very much missed not only by those in Edmonton, but by all his friends from over the years.
#34426 - Rtd Cst. John A. Miles - Born In: Glace Bay - Passed in: Hampton, New Brunswick, Canada- Passed on: July 13th, 2016. It is with saddened hearts that we announce the passing of our father, grandfather, brother and friend, John A. Miles. He passed away on July 13, 2016 at the age of 70 in Hampton, N.B., where he resided the last number of years. John was the son of the late John & Hilda (MacPhee) Miles. John was born in Glace Bay and raised in No. 11 area. In his younger days, he was extremely active in sports where he followed in his father’s footsteps as a catcher in baseball & goal tender in hockey. In later years, John enjoyed numerous outdoor activities such as hiking, hunting, & fishing, where he was at peace being with Mother Nature. Prior to his retirement, John was involved in law enforcement for almost 30 years, first as a police officer on the Halifax Police Force, & over 20 years as a member of the Royal Canadian Mounted Police. In the RCMP, John patrolled many areas of Nova Scotia & New Brunswick. He is survived by his daughter & son-in-law, Danyelle & Graham Smith of Howie Centre; grandchildren,
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Ryan, Rochelle, & Nolan; brothers, Bill (Gloria), Joseph (Rose Mary); his uncle, Bea Miles, his aunt, Joan MacLeod, all of Glace Bay; also his aunt, Ruth MacLean of Calgary; as well as numerous cousins. John is also survived by many friends in Nova Scotia & New Brunswick, especially a special friend & soul mate, Debbie French of Quispamsis, N.B. As per John’s wishes, there will be no public visitation. There will be a private family service under the direction of Curry’s Funeral Home, Glace Bay. Interment will be in the Black Brook Cemetery. As John was a member of the Shriners Organization, a donation to the Shriners Children Hospital, or a charity of one’s choice would be a way to honour his memory.
#17847 – Rtd. Cpl.l Loyd F. Nystrom - Dad died on Saturday, July 2. Tired and resigned, after a short battle with failing health, he was ready to let go. He lived the life he wanted, simply, with quiet determination, patience, honesty, and grace. His family is heartbroken. Dad, we love you and will miss you more than words can say. You are gone too soon. Thank you Donna of Gibsons, BC, for your remarkable and enduring friendship; to his good neighbours of Beach Grove - particularly Jack and Joe - with whom he spent many happy hours passing the time of day; and thank you Diana and Walter, Clayton, and other extended family; and to the Rock Hounds, rock carvers, gem cutters and silversmiths, and so many others of you, some who have gone before him or that we don't know, but all of whom gave his life meaning and purpose. We are grateful for you all. Published in The Delta Optimist from July 8 to Aug. 6, 2016. See more at: http://www.legacy.com/obituaries/nsnews/obituary.aspx?n=loyd- nystrom&pid=180601638&eid=sp_shareobit#sthash.oVGWZOli.dpuf * * * * D) Veterans’ News * * 1) Job Opportunity – Richmond Detachment
July 28, 2016
Court Liaison Officer Expression of Interest Job ID: 2016190 $32.64 to $38.54 per hour + 12% in lieu of benefits Closing Date. August 8th, 2016 at 11:59 PM
POSITION OVERVIEW This is specialized work in the RCMP. Detachment of a technical legal nature. Examples of key work activities include: • Expedite prosecution reports to Crown Counsel, including reviewing reports to ensure the accuracy and completeness of reports. • Process of persons through the criminal justice system in an efficient manner. • Direct investigating officers to secure, for court purposes, all necessary details, evidence and statements to prove charges. • Ensure that all information processed for court files is accurate and complete in order to ensure that cases are not dismissed for technical error or lack of evidence. • Liaise with Federal and Provincial Crown Counsels and other federal, provincial and municipal agencies including officials and detachment staff to facilitate the criminal case management process.
EDUCATION AND EXPERIENCE Completion of Grade 12 or equivalent supplemented by coursework in law plus 5 years of related experience in a police environment including knowledge of criminal codes and investigational procedures OR an equivalent combination of education, training and experience is required.
KNOWLEDGE, SKILLS AND ABILITIES • Thorough knowledge of law enforcement practices of the R.C.M.P. and of the departmental rules, regulations, policies and procedures applicable to the work.
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• Thorough knowledge of the Criminal Code of Canada and applicable Federal and Provincial statutes and Municipal bylaws. • Thorough knowledge of investigational procedures and evidentiary requirements to prove a charge. • Considerable knowledge of the criminal justice system and court procedures. • Ability to read and assess reports for clarity and completeness and to ensure that all proper investigational procedures and evidentiary requirements are met. • Ability to ensure that investigating officers respond promptly to requests from Crown Counsel for additional information. • Ability to provide direction to members regarding proper documentation, pertinent case law interpretation and policy directives, and to assess and report on members' performance in court. • Ability to resolve court scheduling conflicts. • Considerable independence of judgement and action is exercised within departmental regulations, policies and procedures and within applicable laws and legal practices. • Ability to establish and maintain effective working relationships with internal and external contacts. • Ability to communicate tactfully and effectively, both oral and written. • Intermediate level in Microsoft Office programs such as Outlook and Word. • Ability to use REDMS or a similar records management system. • Ability to obtain and maintain an RCMP enhanced security clearance.
LICENCES, CERTIFICATES AND REGISTRATIONS Valid Class 5 Driver’s Licence for the Province of British Columbia.
WORKING CONDITIONS AND EFFORT Work is performed in an office environment with some travel to and from the detachment to the court house. * * * 2) Commissionaires BC is Hiring
August 3, 2016
Hi Frank!
I hope this email finds you well and enjoying your week. I’ve got an ad for your next edition of Frank’s Funnies! Would you mind including it? Let me know if you need another format.
Thank you so much for your help!
Jamie JAMIE READ Director, Human Resources COMMISSIONAIRES BC T: 604 646 3344 E: [email protected] * * Commissionaires is currently recruiting Security Officers to work at one of our high-profile Public Safety Canada sites in Burnaby. Public Safety Canada is responsible for coordinating the activities of federal departments and agencies tasked with protecting Canadians and their communities, businesses and interests.
REQUIREMENTS & EXPERIENCE Willingness to complete a Top Secret Clearance, which requires applicants to provide details and documentation representing at least 10 years of continuous history (residence, employment, school, international, travel, etc.)
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A previous background in the Canadian Armed Forces, RCMP, municipal police, and/or law and security Excellent customer service skills A valid BC security license High degree of tact and discretion
FOR MORE INFO: www.commissionaires.bc.ca/careers
NO SECURITY LICENSE? Train with us and receive 50% off BST! * * * 3) Quarterly Readership Survey
July 20, 2016
Attached you will find the Quarterly Readership Survey report.
Greetings, Not sure whether you would like to include the Quarterly readership survey results in your newsletter/website posts. Participation in the survey was low, but we found the results to be informative. These results will help us shape the future direction of the magazine. See attached.
Michael Duncan Chair, Board of Trustees RCMP Quarterly [email protected] * * * 4) RCMP Veterans Association Annual General Meeting 2016
National By RCMPVA | July 22, 2016
After our last Board of Directors Meeting on June 23, 2016, I sent out to all Division Presidents my summary of the work accomplished and the decisions taken by your Association Board of Directors. We will now post the Bulletins to the website in both Official Languages for all members to access.
The Board met on July 20, 2016. This was the final regular meeting of the Board before the Annual General Meeting to be held on September 22, 2016 and hosted by Nova Scotia Division. As you can appreciate, the Board’s focus was on the preparation for the AGM.
The closing date for nominations for Directors being on June 24, 2016, the Chair of the Nominating Committee, Immediate Past President Cal Small, made his report. At the AGM 2016 there will be 5 vacancies on the Board, and we have 5 candidates to fill those vacancies. This means that, like last year, there will be no contested election. Incumbents Al Rivard and Peter Sorensen have decided to stand for re-election, and Céline Gingras, who was appointed in October 2015 following the resignation of Bill Maxwell, has agreed to stand for election in her own right. Newcomers Sandra Conlin and Mike Duffy will join the new Board along with mid-termers Murray Milne, Bob McKee and Bill Greenslade. We will say good-bye and thanks to Jack Briscoe, who stood in after Rosie Bowman’s resignation from the Board, and of course to Cal Small, whose role of Immediate Past President will now fall to yours truly. I will definitely have words of welcome as well as thanks when we convene for the AGM!
There will be four resolutions that will be e-voted upon by the membership prior to the AGM 2016. The first resolution is the mandatory resolution to appoint the Public Accountant who audits the Association’s books. The second resolution is a house-keeping amendment to the By-laws to clarify the responsibilities of the Board and the duties of Association officers.
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The third resolution is the outcome of a decision taken at the AGM 2015 in Quebec City. Our colleagues from Quebec Division have long believed that using the descriptor “vétérans” in the Association name is more appropriate than “anciens,” a word that has been used in our Corporate Name since 1977. I quite agree, and we undertook at Quebec City to do something about this. Under the Not-for-profit Corporations Act, under which we now operate, the Association “may carry on activities under or identify itself by a name other than its corporate name.” Hence, we are putting “alternate” names into the By-laws which use “vétérans” rather than “anciens” in the French version of the Association’s name. The banners on the website and social media pages already use “vétérans” and all Divisions are strongly encouraged to use the “vétérans” name on their letterhead and correspondence whenever the French version is used.
The fourth resolution makes amendments to the By-laws to reflect the changing of the name of the Associations’ charity from the RCMP Veterans’ Association Benefit Trust Fund to the Maintiens Le Droit Trust Fund. The by-law amendments also reflect the decision to set up a Board of Trustees under the Articles of Continuance to supervise the management and administration of the Maintiens Le Droit Trust Fund, and the need for the Trustees to be accountable and transparent to the Board of Directors and the membership. The Board of Directors appointed a fifth Trustee-designate, Robert Hurman of Newfoundland and Labrador Division, who will join Keith Trail, Roy Berlinquette, Ian Atkins and Jerry Plastow who were appointed at our last Board meeting.
In terms of financial disclosure, the Not-for-profit Corporations Act requires the Board to place before the members each year before the AGM the comparative financial statements of the preceding year and the report of the public accountant. The Association Treasurer, Peter Sorensen, is working with the Auditors to expedite the completion of public accountant’s report as quickly as possible in order for the Association to meet its legislative obligations.
The Board began brainstorming about the agenda of the National Council Meeting during AGM 2016. The Council meets before the AGM to discuss matters of a strategic nature. This year we will have various Consultation Reports to consider, including on membership and finances, plus proposals from Divisions for by-law changes regarding membership and governance. This Council will be my last as President, and I am looking forward to the discussions that will help shape our Association’s future.
Dave Leblanc President RCMP Veterans’ Association * * * 5) Beyond the Way – RCMP Veterans’ Association AGM 2016
July 26, 2016
Frank:
Attached is Bulletin #11 Beyond the Wave - AGM Cruise 2016. Please publish in your next edition.
Thanks Vic Gorman [email protected] * * * 6) Finding a Retired Member
July 19, 2016
I am trying to find a member that was stationed in Nelson, BC in July of 1998. This guy bought some art from me, paid for it and I have never heard from him since.
John Roseveare
Is there any chance you could send something out in BC to locate him?
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Bill Axley [email protected] Calgary Division RCMP Veterans * * * * E) Loyalty battles with reality as Mountie morale dips
JACK KNOX / TIMES COLONIST JULY 22, 2016 06:00 AM
Sen. Colin Kenny: “There’s a very strong emotional attachment by members of the Royal Canadian Mounted Police toward the service they’re in. There’s also a very profound sense of being let down.”
The Mounties have a morale problem. Chronic understaffing. Lack of resources. Frustration over a hierarchy that leaves ordinary cops without a voice in dealing with a management they don’t trust.
Their pay has been slipping relative to other forces for a decade, recruitment is a challenge and they are losing officers to other departments, including the four municipal ones in Greater Victoria. “It’s a big deal and most Canadians aren’t even aware that it’s happening,” Sen. Colin Kenny said.
The question for several hundred Mounties on Vancouver Island — and the communities they serve — is: What is the federal government going to do about it?
As it is, some members feel unsupported in what is already an isolating job. “When your own organization doesn’t have your back, it becomes even more lonesome,” is how one Island RCMP officer put it last week.
At issue right now is a 2015 Supreme Court of Canada decision to allow Mounties to form a union or professional association to represent them. The court gave Parliament until this spring to pass the necessary legislation, but the politicians — who have embraced the idea with all the enthusiasm of a man going for a prostate exam — missed the deadline.
The Liberal government did push a bill through the House of Commons but it was so restrictive — it wouldn’t have let the union negotiate issues such as equipment, harassment and discipline — that a Senate committee booted an amended version back to the Commons in June.
What happens when MPs return to Ottawa this fall is uncertain. Governments don’t like it when the Senate throws legislation back at them with heavy rewrites, said Kenny, who was among the committee members who amended the bill.
The committee did so not long after a Treasury Board summary of consultations with more than 9,000 Mounties — half the force — found indications of a “serious morale challenge” and “a major disconnect between the rank and file and senior management.” Those findings were no surprise to Kenny. In 2010, he was one of six Liberal-appointed senators who published a report portraying the RCMP as a cash-starved outfit lacking in leadership. They said the force needed to hire at least 5,000 more members. That hasn’t happened. Detachments continue to run under strength. “If I wanted to work an overtime shift every day and every night, I could,” the Island Mountie said. “People are getting burned out.”
The force constantly finds itself robbing Peter to pay Paul. Vancouver Island mayors complained that a decision to send members to an anti-gang initiative in Surrey left their detachments short. Kenny said devoting more cops to counter-terrorism efforts made sense, but it meant robbing other units. “It left white-collar crime investigations just sitting there.”
Former Mountie Rob Creasser said the force has to re-evaluate its mandate, which includes everything from wrestling drunks in small-town Vancouver Island to battling organized crime in the Lower Mainland
- 7 - to national security. “We can’t continue to be all things to all people … with the resources we currently have,” he said from Kamloops.
Creasser speaks for the Mounted Police Professional Association, which is vying with the National Police Federation to represent rank-and-file members.
Recruitment and retention of officers has become difficult for the RCMP. “Part of the problem is people don’t want to join the Mounties,” Kenny said. “There are a whole lot of places that have better pay and working conditions than they do.”
The RCMP reacted to that challenge this May by streamlining the recruitment process, opening it to permanent residents of Canada and promising western Canadian applicants postings in their home province.
But RCMP pay relative to other major police agencies has been slipping since 2006. An RCMP senior constable makes $82,000 a year, about $10,000 less than the base salary of a five-year constable in Greater Victoria’s municipal departments. The pay gap is one reason Mounties have been drifting to municipal forces.
Of the eight experienced police officers hired by Saanich Police since January 2014, six have come from the RCMP. Six Mounties moved to Victoria Police between 2007 and 2015. Central Saanich’s 25-member force has added three former RCMP members in the past five years.
Oak Bay has hired six Mounties in the past five years. Ten of the force’s 26 members began their careers with the RCMP. Some municipal forces have recruited Mounties aggressively; Calgary scooped up 22 of them in 2014 alone.
Municipal departments can give officers the comfort of knowing they won’t be transferred to other communities, and often have better resources at hand, whether that be readily available back-up or equipment, Kenny said.
Delays in updating carbines meant the three Mounties murdered in Moncton in 2014 were outgunned by their killer, he said. “They have to start supplying the manpower and equipment that will keep people safe.”
Creasser, who retired from the RCMP six years ago after a career that began in 1981, said the pressures are getting worse. “And I thought it was bad when I left.”
It’s not just a matter of pay and resources when police departments are competing for officers, he said. There’s also the matter of how members are treated, and their lack of a voice when things are wrong. And no, it’s not easy for the force to attract women when 400 or so of them are pushing class-action harassment suits.
Presumably that’s the sort of thing that might come up in collective bargaining, though the Treasury Board report found officers themselves are split on the idea of forming a union. A solid majority think doing so is essential, but a sizable minority are vigorously opposed. All are wary of police getting lumped in a public- service union, as opposed to one specific to the RCMP.
In any event, organizing the Mounties (the only Canadian force with more than 50 members not to have a union) is easier said than done. Reaching more than 18,000 officers scattered across the country is a logistical nightmare (though in March, the RCMP said it would be a human resources priority to “establish a new labour relations framework to provide members with the right to be represented by a certified bargaining agent of their choice.”)
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Creasser said finding communication channels is hard. Members have been resorting to private Facebook groups to pass information unofficially, but even that excludes the large number of cops who shun social media, regarding it as a security sieve.
So there the Mounties sit, frustrated, waiting for Ottawa to do … something. “There’s a very strong emotional attachment by members of the Royal Canadian Mounted Police toward the service they’re in,” Kenny said.
“There’s also a very profound sense of being let down.
© Copyright Times Colonist - See more at: http://www.timescolonist.com/news/local/jack-knox-loyalty-battles-with-reality-as-mountie- morale-dips-1.2307950#sthash.GduvFQAT.dpuf * * * * F) New Canada Child Benefit could serve as model for health-care reform: report
Bill Curry OTTAWA — The Globe and Mail Wednesday, July 20, 2016
The launch of new family benefits that take from the well-off in order to give more to lower and middle- income Canadians is stirring debate over whether the same approach should apply to health care.
Millions of Canadian parents will receive new monthly payments from Ottawa starting this month as the government officially launches the new Canada Child Benefit.
The fact that the benefits are based on family income means they are particularly generous for lower- income Canadians, who will receive thousands of dollars each year in tax-free benefits.
“A big part of how we’re paying for it is we’re not sending child-benefit cheques to families that don’t need it, to the wealthiest families, so that we can do more for the people who do need it,” said Prime Minister Justin Trudeau, who officially launched the program Wednesday. “It is going to have a massive impact, not just on families that are struggling, but on families in the middle class right across the country.”
The CCB eliminates several programs aimed at families with dependent children – including the Conservatives’ income-splitting plan and fitness and arts tax credits – and folds them into a single benefit that the Liberals say will be more generous for nine out of 10 families.
The maximum benefit is $6,400 per year for each child under the age of six and $5,400 per year for each child aged six to 17. These payments are tax-free.
A family earning the median Canadian income of $78,870 with one child under six and one child over six would receive about $6,284 a year or $523 a month, according to the government’s online calculator.
The benefit is completely eliminated when family income reaches about $190,000.
A report this week by Sean Speer and Ian Lee for the Macdonald-Laurier Institute argued that income testing for family benefits could serve as a model for health-care reform.
The report notes that while Canadians are universally covered for doctor and hospital visits, Canadians without private coverage must pay out of pocket for a large number of other services like prescription drugs and vision care.
The authors argue that requiring high-income Canadians to pay fees for doctor and hospital visits would allow governments to provide more generous health benefits to low- and middle-income families.
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“The system is going broke,” said Mr. Speer, who played a key role in writing federal budgets under Stephen Harper’s Conservative government. “Basically the only option, I think, available to governments that want to improve their health-care outcomes and expand coverage to folks who need it is to experiment with reforms like patient cost-sharing.”
Federal Finance Minister Bill Morneau suggested that same approach in a 2012 book he co-authored before entering politics. He noted that moving in that direction would not be an “easy transition.”
“While this will not be especially popular with the more affluent, who will be the hardest hit, at least everyone will retain access to services and benefits. This would seem to be the most likely method of achieving social equality and fairness while reducing government costs,” Mr. Morneau wrote with Fred Vettese in relation to health-care costs.
To date, neither Mr. Morneau nor Health Minister Jane Philpott have outlined Ottawa’s plans for future health funding.
Health care is on the agenda this week in Whitehorse, where provincial and territorial premiers are meeting as the Council of the Federation and are calling for increased federal transfers.
Some critics view income testing as a threat to the universal nature of health-care funding in Canada. There is also debate over how income or means testing should be measured. For instance, nursing-home fees in New Brunswick are based on net annual income. The seniors advocacy group CARP campaigned strongly against a 2015 provincial budget change that added savings and investments into the calculations.
Natasha Mistry, CARP’s director of stakeholder relations, said internal polling of members found a solid majority oppose income testing of health-care benefits. “CARP members definitely believe in the universality of care,” she said.
The Liberal government in New Brunswick promoted the change as a “new and progressive policy” that directs support to those who need it the most.
Mr. Trudeau declined Wednesday to provide specifics on his government’s approach to those health-care negotiations.
“I’m looking forward to robust discussions with the provinces as our Health Minister talks about the kind of future for our health-care system that we need,” he said. “Canadians know that we need to have a solid system that responds to the very real preoccupations that Canadians have and that’s exactly what we’re committed to and that’s why we’re glad to be engaging positively and constructively with Canadians and with provinces on a broad range of issues.” * * * * G) Four retirement strategies to counteract miserly bond yields
Ian McGugan The Globe and Mail Monday, July 18, 2016
Plunging bond yields are putting your retirement at risk.
Over the past few years, the fading payouts from fixed-income investments have boosted the cost of a secure old age by roughly a third.
The big increase in the price of retirement is one of the most insidious ways in which the great slump in interest rates is hurting average Canadians.
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But don’t lose hope. There are strategies that can help counteract the drag imposed by today’s miserly yields. “You have more options than you may think,” says Wade Pfau, a professor of retirement income at American College of Financial Services in Philadelphia and a prominent researcher in the field of retirement planning.
Four types of strategies can help you deal with the financial uncertainties of retirement planning, Prof. Pfau says.
The first – although probably the least appealing alternative – is to put a tight lid on your retirement spending by using a fixed withdrawal rate to tap your portfolio.
How conservative should you get? Many people rely on the 4 per cent rule, which says a retiree can safely withdraw an annual amount equal to 4 per cent of his or her initial portfolio, adjusted for inflation.
The guideline is rooted in a landmark 1994 article by William Bengen, an American financial planner. Rather than relying on theory, Mr. Bengen crunched the actual historical numbers to determine the highest fixed withdrawal rate that would have allowed a retiree’s portfolio to weather any downturn in the previous decades. He settled on 4 per cent as a good guideline for anybody contemplating a 30-year retirement.
But here’s the problem with the 4 per cent rule: Bond yields in the period surveyed by Mr. Bengen were typically much higher than they are now. The decline of interest rates to record-low levels since the time of his original paper means it’s now time to redo his retirement math.
“You would probably have to cut your withdrawal rate to 3 per cent today to create the same level of safety that Bengen achieved with 4 per cent in his original study,” Prof. Pfau says.
Unfortunately, ratcheting down from a safe withdrawal rate of 4 per cent to a rate of 3 per cent is a bigger deal than it may appear at first glance.
With the 4 per cent rule, a retiree would need $1-million of savings to produce a steady, inflation- protected income of $40,000 a year. But at 3 per cent, the same retiree would require a third more money – in excess of $1.3-million – to generate the same income.
Such savings are simply impossible for most people to achieve. For that reason, many planners now recommend more nuanced approaches that adjust your retirement spending to reflect the actual performance of your portfolio. If your portfolio happens to thrive during your retirement, these flexible approaches let you spend considerably more than the 4 per cent – or 3 per cent – rule would allow.
Prof. Pfau says a good example of this second approach to managing retirement risk is a rule-based system developed by U.S. financial planner Jonathan Guyton. It can allow initial withdrawal rates of 6 per cent or so – but with the proviso that you must be prepared to slash your spending, in line with preset guidelines, if markets move against you.
Yet another approach to managing retirement risk is even more cutting edge. It involves looking for smart ways to reduce portfolio volatility.
For instance, a retiree could maintain a healthy exposure to stocks but replace bonds with income annuities that guarantee to pay her a fixed monthly amount until she dies.
This unconventional mix of risky stocks and safe annuities provides an attractive combination of profit potential along with longevity insurance, Prof. Pfau says. The annuities ensure retirees cannot outlive their savings, while the stocks provide potential for growth.
By removing bonds from the picture, this strategy also removes the danger of being blindsided by an unexpected rise in interest rates. Bond prices move in the opposite direction to interest rates so “you have
- 11 - to be concerned that if rates ever do start going up, retirees with large bond holdings will suffer severe capital losses,” Prof. Pfau warns.
A final approach to managing retirement risk is to build up buffers outside your investment portfolio. If the stock market tumbles, you can tap these buffers for funds until your stocks bounce back. As a result, your portfolio can include more stocks and feature a higher withdrawal rate.
Potential buffers include cash savings accounts and reverse mortgages. “Instead of being forced to sell assets at a loss if the market goes down, you can use these buffers as part of a co-ordinated strategy to give your portfolio time to recover,” Prof. Pfau says.
He believes this approach and its counterparts all deserve a closer look as people wrestle with how to manage retirement risk in an era of remarkably low interest rates.
“A lot of financial planning software simply plugs in historical averages and assume bonds will provide 5 per cent or so annual returns,” he says. “But that’s not mathematically possible – not with yields where they are today.” * * * * H) And now for the lighter side!
A man joined a big Multi National Company as a trainee. On his first day, he dialled the pantry and shouted into the phone, "Get me a coffee, quickly!"
The voice from the other side responded, "You fool you've dialled the wrong extension! Do you know who you're talking to, dumbo?" "No," replied the trainee.
"It's the Managing Director of the company, you fool!" The trainee shouted back, "And do you know who YOU are talking to, you fool?"
"No." replied the Managing Director indignantly. "Good!" replied the trainee and put down the phone. * * * An Arab Sheik was admitted to Hospital for heart surgery, but prior to the surgery, the doctors needed to store his blood in case the need arose. As the gentleman had a rare type of blood, it couldn't be found locally, so, the call went out.
Finally a Scotsman was located who had a similar blood type. The Scot willingly donated his blood for the Arab. After the surgery, the Arab sent the Scotsman, as appreciation for giving his blood, a new BMW, some diamonds & £25k.
A couple of weeks later, once again, the Arab had to go through further surgery. His doctor telephoned the Scotsman who was more than happy to donate his blood again.
After the second surgery, the Arab sent the Scotsman a thank-you card and a box of Quality Street chocolates. The Scotsman was shocked that the Arab did not reciprocate his kind gesture as he had done the first time.
He phoned the Arab and asked him: ‘I thought you would be generous again, that you would give me a BMW, diamonds & money, but you only gave me a thank-you card and a box of Quality Street?’
To this the Arab replied: ‘Aye laddie, but I now have Scottish blood in ma veins’. * * * A car hit an elderly Jewish man. The paramedic says, "Are you comfortable?" The man says, "I make a good living."
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* * I've been in love with the same woman for 49 years. If my wife finds out, she'll kill me! * * Someone stole all my credit cards, but I won't be reporting it. The thief spends less than my wife did. * * We always hold hands. If I let go, she shops. * * My wife and I went to a hotel where we got a waterbed. My wife calls it the Dead Sea. * * The Doctor called Mrs. Cohen saying, "Mrs. Cohen, your check came back" Mrs. Cohen replied, "So did my arthritis!" * * A drunk was in front of a judge. The judge says, "You've been brought here for drinking. "The drunk says, "Okay, let's get started." * * * A man walks into a drug store with his 8-year old son. They happen to walk by the condom display, and the boy asks, "What's are these, Dad?" To which the man matter-of-factly replies, "Those are called condoms, son. Men use them to have safe sex."
"Oh I see," replied the boys pensively. "Yes, I've heard of that in health class at school." He looks over the display and picks up a package of 3 and asks, "Why are there 3 in this package?" The dad replies, "Those are for high-school boys. One for Friday, one for Saturday, and one for Sunday."
"Cool!" says the boy. He notices a 6-pack and asks, "Then who are these for?" "Those are for college men," The dad answers, "Two for Friday, two for Saturday, and two for Sunday."
"WOW!" exclaimed the boy. "Then who uses these?" he asks, picking up a 12-pack. With a sigh, the dad replied, "Those are for married men. One for January, one for February, one for March..." * * * *
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