The problem with the CPP

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I have spent a lot of time over the years defending the Canada Pension Plan against people who don't like it or who question its sustainability. But there's one complaint against the CPP that I have to admit is legitimate. It's the inadequacy of the survivor's benefit, which may be paid to the legal spouse or common-law partner of a deceased contributor.

The problem with the survivor's benefit is that it's capped. Many people think the capped amount isn't sufficient, and they're complaining to the federal government. Here's a story from a few years back about a man who ended up with survivor's amount of $22.75 per month after his wife died. She'd been a CPP contributor for 44 years.

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Ask Rob
The question: "Are there advisers who specialize in exchange-traded funds? I can see that sort of advice filling a need, assuming that service is cheaper than, say, one per cent of asset value?"

My reply: "More advisers are using ETFs in client portfolios these days, and you should be able to find one fairly easily. An adviser's website will sometimes mention the use of ETFs, or you can call a firm and ask which of its people build portfolios with these products. The advice fee would be tied to your account size and the fee schedule for your adviser and his or her firm. But the cost of investments would be low thanks to the comparatively low fees of ETFs. Some are as low as 0.06 per cent."

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