Op-Eds
Canadians want a reliable retirement income so they can enjoy life without worrying about outliving their savings. They also want flexibility so they can adapt to changing circumstances, particularly relative to their health. Delaying receipt of public-pension benefits — Canada or Quebec Pension Plans (C/QPP) and Old Age Security (OAS) — to age 75 can help on both counts.
Retirement planning is challenging. Most of us struggle with how much money we need to save, and we see post-retirement financial decisions as a separate and secondary consideration. Yet, as we show in our recent C.D. Howe Institute study, the manner in which savings are used in retirement has a direct impact on how much we need to accumulate prior to retirement…
Hugh Segal is principal of Massey College. He served in the Canadian Senate as a Conservative from Ontario and was vice-chair of the subcommittee on urban poverty.
Every democracy’s internal legitimacy is tied to how fair the residents of that country feel…
The bankruptcy of Sears Canada, and the threat that its underfunded pension plan won't pay what it promised, has caught the attention of members of Parliament. Understandably so. People don't get a second chance at retirement. Getting an annuity less than you counted on is a terrible blow.
After the sponsor of an insolvent pension plan has gone bankrupt, moreover, governments have no happy choices. A bailout – taxpayers paying for the actions of an irresponsible employer – would be unfair, and set a terrible precedent. Some want a national pension guarantee fund that would charge premiums and pay out upon failures. But experience in the United States, Ontario and elsewhere shows that those schemes also tax responsible people to…
Low fertility rates, increasing life expectancies and the aging of baby boomers are causing Canada’s old-age dependency ratio to rise. This increase in pensioners relative to the working-age population will strain the sustainability of our social security system. Should the age of eligibility (AOE) for seniors’ programs be raised? If so, when? Since Ottawa seems to be avoiding the problem, we propose a politics-free solution.
We propose that Ottawa adopt an automatic balancing mechanism that would automatically adjust the AOE for programs like Old Age Security (OAS) and Canada Pension Plan (CPP) based on demographic calculations outside of political influences. The formula would deem that a constant proportion of one’s adult life…
We have often heard that Canadians are unprepared for retirement. Low interest rates have meant low returns to saving and have accelerated the demise of defined-benefit pension plans in the private sector. People — we are told — are not saving enough for retirement to compensate. But such fears of retirement unpreparedness are overblown.
Studies on the subject have typically ignored retirement savings beyond the three traditional retirement pillars of: 1) Old-Age Security (OAS and the Guaranteed Income Supplement); 2) CPP and the Quebec Pension Plan; and 3) workplace pensions and RRSPs. Specifically, gloomier reports have neglected wealth accumulated in the fourth pillar of retirement, made up of non-pension assets. As Fred…
