The future of pensions - Macleans.ca

The future of pensions

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While Jim Flaherty and the provinces continue to debate CPP reform, Kevin Milligan considers the options.

Recent reviews of the Canadian retirement income system by Jack Mintz and Bob Baldwinhave concluded that the public system already in place does well in ensuring sufficient retirement income for those in the bottom two-fifths of the population. Research by Statistics Canada indicates that more than two-thirds of lower-earning Canadians have more income in retirement than they did at age 50. The pension problem, such that it is, can be found among those in the top three-fifths of the population who do not receive benefits from an employer-sponsored pension plan.

The CPP affects almost everybody. The pension problem identified by these recent pension reviews is one that affects middle-to-high earners without a workplace pension. This presents a fairly obvious mismatch. Is a bigger CPP really the solution for high earners who aren’t saving enough? Should we invest a lot of public policy effort to ensure that high earners can spend their retirement days in Florence instead of Florida? I still need to be convinced that a more targeted solution wouldn’t be more appropriate.

Milligan reviews some of the proposals, including the last Liberal campaign proposal of a “secure retirement option” and Thomas Mulcair’s proposal of a pension exchange. Mr. Mulcair’s leadership website seems to have mostly disappeared, but his policy paper on retirement security is preserved for posterity here.