Pension system needs urgent attention: report

OTTAWA— Canada’s pension system needs urgent attention, says a new report released today by the Canadian Centre for Policy Alternatives (CCPA).

The report, by CCPA Research Associate and pension expert Monica Townson, outlines some of the problems with Canada’s pension system and examines some of the options that have been proposed to deal with them.

“Public pension programs such as Old Age Security and the Canada Pension Plan provide only a modest income for people when they retire,” says Townson.

“Only 38% of paid workers have workplace pensions. Everyone else must rely on public pension programs supplemented by their own savings but only a small minority of Canadians (31% of those eligible to contribute) take advantage of tax-assisted private savings through RRSPs. Almost $500 billion in unused RRSP contribution room is being carried forward,” Townson notes.

The report notes that, while attention has focused on the problems with workplace pension plans, any pension reforms must take into account all three tiers of the retirement income system. Some changes could be implemented quickly while others might be phased in over a period of time.

Among the proposals now on the table are increases in the basic guarantee of OAS and GIS; expansion of the Canada Pension Plan; and some kind of supplemental plan that might be administered centrally by governments to supplement the CPP.

“There is no ‘magic bullet’ that will fix everything,” Townson says. “But it’s important that we consider what can be done and that we actually start doing it.”

This is the first in a series of reports on pension reform that will be released by the CCPA in the coming weeks.

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What Can We Do About Pensions? is available from the CCPA website: http://policyalternatives.ca

For more information contact Kerri-Anne Finn, CCPA Senior Communications Officer, at 613-563-1341 x306.