The Vancouver Sun recently published a thought-provoking article about the Canada Pension Plan, taking a deeper look at whether we really need to increase monthly CPP benefits. This issue will be discussed at the annual meeting of our Finance Ministers in December.
The question that the article raised is whether Canadians truly have not saved enough for retirement.
A 2009 research project concluded that our retirement income system was “working well,” and Canadians had adequate standards of living. Lower-income seniors could rely on the OAS and the Guaranteed Income Supplement, giving Canada one of the world’s lowest rates of seniors’ poverty.
It suggests things are not that precarious after all – in contrast with some evidence that “Boomers” have not saved enough for their retirement.
The writers also say that, if the CPP is expanded and contribution rates rise, Canadians might save less in other areas. For example, RRSP contributions would drop if CPP contribution rates were to rise. That may not be the best approach for us, because RRSPs bring unique benefits to Canadians.
So, the evidence does not suggest that we are in a national income crisis. We might conclude, then, that a rise in CPP benefits is not currently on the horizon.
This ad appeared in the Richmond News on November 8, 2013.