Between population aging, the collapse of the stock market, near-zero interest rates, and higher life expectancies, will our children be able to afford our old age pensions?
Where are we, exactly?
Around 1970, when the retirement age was set at 65, life expectancy in Canada was 72Â years. This meant that pension payments would theoretically last for seven years. Today, with our life expectancy at 81 years, retirement will span 16 years. This is good news, of course. But it does have consequences.
Indeed, as life expectancy has risen, the Baby Boomers have begun to retire. They started in 2010 and will leave the workforce in massive waves until 2025 or 2030. In 1975, there were seven workers for every retiree. Today, the ratio is four to one, and in 2030, it will be two to one. This is a result of low birth rates in recent decades, and the latest census data shows that no increase is expected over the medium term.
Consequently, the cost of the Old Age Security (OAS) program will explode, going from $36Â billion in 2010 to $108 billion in 2030.
That means three times the cost but only half as many people to pay for it. We are running into a wall. We can close our eyes and plow right into it, or we can be responsible and disciplined and find a way of fixing the problem and making sure the plan remains viable.
Are retirees in danger in the short run? Clearly not. Parliamentarians, regardless of their political stripes, are obviously not going to jeopardize the financial security and well-being of our seniors. However, refusing to deal with this problem for partisan reasons would be completely irresponsible to future generations, if not shameful.
Nearly all OECD member countries have taken steps to ensure their public pension systems are healthy, including Sweden and Denmark, two countries known for being social democracies.
For example, in 2010, France changed the legal retirement age from 60 to 62. Sweden also took the proactive measure of establishing training programs for workers aged 40 to 50 to enable them to stay in their jobs longer.
If we do not take our pension plan problems seriously, we will pass on this mess to our children and grandchildren. I reject this option.
"Canadians’ CPP pensions are not at risk and Canadians should not be concerned about their CPP pensions. In November 2010, the Chief Actuary of Canada reaffirmed through his triennial review that the CPP remains sustainable at the current contribution rate of 9.9% throughout the 75-year period of his report, based on actuarially accepted assumptions. Despite the market volatility we have witnessed in recent years, we remain confident that our investment strategy will deliver the returns required to help sustain the plan for decades and generations. The CPP Fund is broadly diversified and designed for a long investment horizon and multi-generational mandate."
There's more at the above url that substantiates why the Investment Board has confidence in the CPP. Now senateurclaudec, please answer: Which is the "other part of the canadian pension plan" that you say the chief actuary was speaking about? If the payouts are sustainable over the long term, and the base fund will continue to grow under the current investment strategy to provide the basis for those payouts, which part of the CPP is in trouble, as you are suggesting? Please substantiate your statements about the CPP.
Since the harper government is willing to raise the retirement age for regular people, please pledge to forego collecting your pension until you're 67, and then accept a level of pension payout in line with that of average Canadians.
There is absolutely no crisis, now or in the future. The numbers being cited here are pure fiction and I'm not going to speculate on where the senator pulled them from.
As a 20 year old, whether or not I have a pension when I retire is the LEAST of my worries. By the time I'm 65 the world and the way we live will be radically different. Old Age Security is just one of the multitude of impossibilities of our current system. In food, energy, healthcare, and our environment, our current way of doing things is nearing its end. We need to come to terms that this lifestyle of extravagance simply isn't going to exist much longer. The necessities and realities of our future are incompatible with the assumptions that this monetary system makes. The whole idea of monetary-based economics will be put to rest, one way or another. So no, don't bother trying to save our old age pensions. It's all going to poop anyways. If you REALLY want to do right by your children and grandchildren, begin the transition towards a permanent, self-sustaining culture of symbiosis with our Earth. Forget about this nonsensical monetary matrix humanity seems to be so preoccupied with.
Second, you want to claim that you are trying to make the future brighter for your grandkids, but you are still advocating for a Canada that forces its seniors to work until...what?...their 70s? That is the amazing world you plan for your grandkids? A world where corporations and the richest minority will keep getting tax breaks, but the rest of us will be forced to work almost right up until we die?
Sorry, but that to me is shameful. The problem with people retiring isn't a problem of OAS, the problem is we live in an unsustainable economic system where there is one set of rules for the richest minority, and everyone else gets punished to support those special rules. We live in a Canada where the wealthiest minority keep taking a bigger and bigger share of the total national economic pie, and where the gap between rich and poor keeps growing, and where workers and getting more into debt to support even a modest, middle-class lifestyle.
Nobody has any plans to fix these unsustainable economic policies that have been pushed for the past 30+ years.
I mean, some of these job creators have really expensive maintenance fees for their Yachts and multi-million dollar homes, and so forth.
but the senator is silent on that issue and my guess is hoping for a rise to 180