Canadian Personal Finance Blog

As I mentioned last week we purchased a new camera last week and didn’t get the extended warranty.

This past Friday (6 days after purchasing the camera),  I read the Future Shop flyer and saw that the same camera is now selling for $50.00 less. I tend to read the Future Shop and Best Buy flyers because I am a techno-geek and like to window shop for things I can’t afford (and know I shouldn’t buy), and this time it paid off very nicely.

I went off to Best Buy, and was my normal polite self, I had my bill with me from the previous Saturday and spoke to the young lady at the Customer Service (sic) desk (I also brought a copy of the Future Shop Ad for the camera). The young lady was very polite as well and then checked and Best Buy was in fact carrying my Camera (Canon S5 IS) for $50.00 less also, and because of this my account was credited for $56.50 (after tax rebates and such).

Well worth the trip, even though I most likely spent $4.00 worth of petroleum to get my money, but money well retrieved. Most electronics stores, and I believe most big box stores (aka Wal-Mart) have this kind of purchase protection plan and it is important to make sure you are not being over-charged and you are taking advantage of later sales on products you have purchased.

I am thinking now, I should have raised a mild stink and asked for more than $50.00 back, because the sales person at Best Buy should have known this camera was going to be on sale in the next few days, but I didn’t think of it at the time.

Extended Warranty?!?

As I stood in line I saw another interesting piece of consumer sleuthing that I feel it is important to report on as well.

A young lady was in front of me, and she had her iPOD touch with her, and there was some issue with it not working correctly. The young lady had her original box, and her extended warranty (which we said she paid $70 for (I believe)), and the Customer Service rep was very polite and said she’d have a look at it.

The Customer Service rep then told her something that caused my ear hear to prick up. Evidently if the Best Buy Customer rep couldn’t repair or make the iPOD work successfully, the young lady (customer) would have to send it to Apple, because it is within a year of purchase and Apple does all repairs in the first year.

Let that sink in, the customer has purchased an extended warranty from Best Buy, however, Apple’s warranty covers the exact same repair in the first year (presumably the first year of the extended warranty as well).

Read that previous sentence again, and tell me you didn’t at least have a “WTF” moment.

What is the use of this “Extended Warranty” if Apple repairs this and not Best Buy? The Customer Service rep in fact said, the customer must send the iPOD back to Apple, because Apple will not accept the iPOD if it is sent in by Best Buy. Another “WTF” moment for me.

So the extended warranty you purchase overlaps with Apple’s, and is effectively redundant (i.e. useless).

That is what Stats Canada says, which is not surprising, but the fact that it was only 2.2% amazes me a little. In 2006 the CPI was 2.0% so this is not a large jump in the CPI year over year, however, as I keep saying the impact of sky rocketing energy prices is still to be shaken out of the market.

Housing in 2007 seems mostly to blame for higher prices, but energy started having an effect by the end of the year as well:

Price increases for basic and frequently-purchased commodities, like food, also fuelled consumer prices in 2007. However, price declines for a number of commodities, particularly several of those less frequently purchased, such as new vehicles and computer equipment, mitigated the rise in consumer prices. Faced with higher prices for frequently-purchased commodities and lower prices for those not frequently purchased, consumers might perceive that inflation was increasing at a faster pace than measured by aggregate inflation.

Interesting view on things, wonder how important vehicles are going to be in the future? Will there be a glut coming soon, or will the Asian continent simply pick up the slack?

Very interesting indeed, this year is going to be a very different kettle of fish.

Politeness Wins Out

One of the Mantras that I espouse on this humble site is to be Polite when dealing with Customer Service folks in specific and with most folks in general (remember being Polite to Police is very important). Yesterday another example of speaking to someone who you want to fix something in a polite way helps out again.

My eldest just graduated from High School and we are very proud, however, we noticed she didn’t get an Ontario Scholar “tag” in her graduation. Given her previous marks we were alarmed to think what might have happened to her marks to cause this inability to keep her average at the correct level (80% for 6 Grade 12 courses).

I decided after discussing (calmly) with my daughter that there must have been a mistake, so I called the school and asked in a polite way if someone could look into this for me, and sure enough it was an error on their part and they are rectifying the situation. I was very thankful to the woman who called me back, but it again shows that acting in an aggressive or rude fashion rarely gets you what you want (unless you are a loan shark), but with a little politeness and courteousness you’d be surprised what can happen.

Happy long weekend to my Canadian readers (ok EXTRA long weekend, since you have to take Monday off to really make it a long weekend).

Yesterday I spoke of the Class Action Suit against my current employer by employees who were part of the Pension Fund that the company discontinued this past year. Needless to say the announcement of this class action suit has caused a great deal of discussion in my company and I find the discussion points fascinating.

As background in the mid-90’s there was a great deal of discussion about how the Defined Benefit pension plan was useless to younger employees because all it did was constrict their ability to put money in their RRSP’s due to a very high Pension Adjustment (I sat on a study committee about this topic), and so there was a push to introduce a new pension plan that was less restricting in terms of Pension Adjustments. A new pension was brought in, which many people adopted, but I just never got around to changing.

Two years later another “investors” pension came in, where you could try this new pension which had an even lower pension adjustment or you could opt out effectively as well. Again, more people moved around, but this time, I wondered, why the company wants me out of the existing Pension? My answer was, it must be good, so I stayed in it.

Last year it was announced that the original pension program was going to be stopped and capped (i.e. the value you have in it now, is not lost, but nothing new can or will be added to it), along with the cancellation of any retirement health insurance and other benefits that were part of this retirement package (many older employees were exempted from this decision, anyone 52 and older at the time is what I remember).

The loss of the pension and the health benefits is a significant kick in my retirement plans, and with this class action suit not including me, as I wrote yesterday, I must rework my retirement plans due to this.

The interesting discussions that have started in the company is, “Why would you trust the company to take care of you when you retire?”.  Many current employees are complaining that they aren’t part of the class action and are thus out in the cold, and their comments are being answered with the, “Why did you expect the company to honour their agreement?”, which seems odd to me.

Do You Trust Your Company Pension

I guess my first reaction to this is, why wouldn’t I? If when I got hired, I was told there was a pension program in place that I would be part of, after 2 years, and that it is part of my benefits package, why would I assume that this was something I couldn’t plan around?

If I didn’t think I was going to be at the company for a long time (which I didn’t at the time) I might make other plans for retirement as well (assuming the pension would be small) but I certainly wouldn’t assume that it would be unavailable or changed in the future.

In Canada (I believe) private pensions are governed under fairly strict rules of conduct and funding, and it is unlikely that a private pension would “collapse” and be unavailable due to mismanagement (I didn’t say impossible, I said unlikely), and they are run as a 3rd party Entity from the company (thus if the company went bankrupt, the pension shouldn’t be an asset that creditors could plunder to get their money back). If I am incorrect in my assumptions, I assume one of my readers will correct me here.

I made the assumption (after being at the company for more than 8 years) that the pension might be a part of my retirement plans, and if I somehow made it to retirement age at the company, it would be very nice, however with this change in the pension, that is no longer the  case (I sill have a great deal of equity, but I have lost benefits and growth of the fund).

I guess my question to my readers is, what do you think of this?

1. Is it fair for a company to change their pension system to help them survive financially? This pension plan was a heavy strain on the company’s capital spending.
2. Is it correct for an employee to assume their pensions are “safe” and will not be changed because of the agreement of employment they signed when they were first employed by the company?

I have my opinions (which I think you can guess by my writing), but I am always interested to hear what my readers think as well.