Is CARP abandoning its members for money?

CARP, The Canadian Association of Retired Persons, is one of two significant advocacy groups for Canada’s seniors. Their website proudly states they will

“Promote financial security for seniors” and

“Governments need to hear from Canadians on policies and legislation that sooner or later affects us all”.

The evidence is strong that CARP has abandoned their mandate. The CPP is responsible for monitoring $50 billion in contributions from CARP’s members alone, roughly $150,000 each. If our Chief Actuary is not accountable to our Auditor-General, our CRA or a CPP Board of Governors, and a Professor of Finance has evidence of a $257 billion surplus being concealed, the CPP demands scrutiny. There is no organization better than CARP to facilitate such scrutiny, advocate for change, and achieve success.

Finance Minister Morneau stated in a 2019 CARP webinar, “CARP has 330,000 members and 98% vote, so we listen.”

Even though CARP’s 330,000 members deserve roughly $3.3 billion in a surplus distribution, CARP refuses to even respond to my emails and phone calls. This is puzzling because CARP and I worked together to bring $440 million per year more in GIS payments to low-income seniors, as described in Mr. Morneau’s March 2019 Budget.

If CARP responded with “We don’t advocate for a CPP surplus distribution because…”, it might be acceptable. However, their refusal to even respond suggests deep pockets may have convinced CARP to remain silent regarding the CPP’s gigantic surplus.

Even before COVID, CARP would hold webinars on various topics to keep their members informed. Because every CARP member deserves $10,000 each, on average, from the CPP, most CARP members would watch a webinar on the CPP’s status with immense interest. I have offered to debate the CPP’s status with any actuary who steps up. This would give CARP’s members a chance to decide for themselves if they deserve a surplus payment and then advocate for it, hopefully with CARP’s assistance.

What actuary would come forward for such a debate? The $257 billion CPP surplus is indisputable. Moreover, after my 40 hours of debating the CPP’s status with top pension expert Malcolm Hamilton, it is evident there is no viable reason to NOT distribute the surplus. Finally, no actuary, economist or politician has provided any reason that would offset one percent of the huge benefits for Canadians and Canada described elsewhere on this website. CARP members might make an actuary very uncomfortable if he tried to explain why, as our Chief Actuary claims “The CPP in not in surplus.”

There is more suspicious evidence. CARP has not always been so silent regarding the CPP. By searching the CARP website with the keyword “CPP”, you will find over 100 webpages on CARP advocacy related to the CPP. However, they are all dated between 2011 and 2016. Meanwhile, since 2016, the CPP’s surplus has increased by another $141 billion.

Regrettably, thousands of CARP members are dying every year without ever seeing their deserved surplus payment which is increasing rapidly as CPP Investments continues to accumulate record profits. Numerous studies have shown that an increase in income will increase longevity and quality of life.

CARP may soon be in trouble with the CRA. The CRA expects all non-profit organizations like CARP to match their website claims. The CARP website states CARP will

“Promote financial security for seniors”.

Trusting Canadians who pay for a CARP membership have a good argument that CARP is deceiving them with such a website claim. By ignoring the CPP’s $257 billion surplus, CARP is probably depriving their members of a deserved $3.3 billion. CARP may soon be subject to a CRA review.  

CARP has participated in substantial protest activity regarding pension plans. However, it has been entirely related to delinquent private sector Defined Benefit (DB) plans like Sears and Nortel. CARP’s protests did not help Sears and Nortel victims and no other delinquent pension funds have been in the news. Moreover, experts predict private sector DB plans will be extinct by 2026.

Conversely, virtually all of CARP’s members are members of the CPP.

If CARP had directed their considerable protest efforts towards a CPP surplus distribution, their members might now be $3.3 billion richer.

While advocating for a surplus distribution, CARP could also advocate for voluntary contributions for seniors directly to CPP Investments. Instead, CARP has endorsed the Longevity Fund. An inspection of the fund reveals it will likely give investors half the profits that CPP Investments can give. The President of the CARP Chapter in Barrie, Ontario, Gwen Kavanagh, was a shrewd, successful financial advisor for 18 years, at firms such as Merrill Lynch. After reviewing the Longevity Fund details, she stated “Personally, I would not invest.”

Moreover, the Longevity fund advertisement, mailed to CARP members, has these intimidating disclaimers in very small print:

“Commissions, trailing commissions, management fees and expenses all may be associated with the fund. Investments in the fund are not guaranteed…past performance may not be repeated…not guaranteed…all redemptions in the decumulation class of the fund will occur at the lesser of NAV or the initial investment amount less any distributions received.”

Investing with CPP Investments would be much simpler. If CPP Investments achieved their 11% return of the last ten years, so would you. The Longevity fund, in good times, might achieve half of 11%, 5.5%, with substantial risk involved. A senior investing $100,000 at 5.5% would have $171,000 after ten years. With CPP Investments, with a likely 11% return, he would have $284,000, $113,000 more.

CARP will receive substantial endorsement income from encouraging their 330,000 trusting members to invest in a fund that is, by far, inferior to CPP Investments. Once again, CARP is failing miserably at meeting their mandate - “Promote financial security for seniors”.

Is the TFI paying CARP to remain silent on the CPP? Is the Longevity Fund paying CARP handsomely to tell trusting seniors to invest in the inferior Longevity Fund? You be the judge.