December 23, 2010
Members agree Canada’s pension system is in urgent need of reform, even though they are comfortable in their own retirements, as they recognize the deficits coming for those yet to retire. They favour a number of ideas which will bridge these deficits, including modest increases to CPP, raising the pensionable earnings limit and establishing a supplementary Universal Pension Plan. Ideas less favoured include raising the retirement age. The one thing they agree on, however, is that the private sector cannot be trusted to provide Canadians with secure, low-cost, high-return pension plans.
There is also a growing sense of urgency and willingness to take action. More than half of members say they would vote the government out of office in the next federal election if serious action on pension reform is not taken now, and close to two thirds say this of their provincial governments.
One half of members explicitly agree that “the time for consultation is long past, action is needed now”
Two thirds of members say Canada’s pension system needs reform “extremely” or “very urgently”, and this proportion has been growing steadily over the past year
Three quarters of members reject the suggestion that 65 is no longer old enough to qualify for full retirement benefits, and more than two thirds explicitly state that Canada should not increase the retirement age from 65.
Members were presented with a series of ideas on pension reform. They are shown below, ranked in the order of the proportion who agreed with each:
Increase pensionable earnings from $47K to $60K 86%
Modest increase (10%) to CPP contributions 76%
Universal Pension Plan, modeled on CPP 67%
Double CPP contributions and benefits 39%
Raise retirement age by stages to 75 in 2080 23%
Trust private sector for safe, low-cost, high returns 10%
Just one tenth think CPP contribution increases discussed ($30 to $200 a month) “would” cause economic hardship, although more than half think this might be the case. Despite this, they generally reject the Canadian Federation of Independent Business’ (CFIB) position that increases to CPP contributions will lead to job losses:
• More than half disagree overall
• Three quarters disagree that employees alone should bear these increases
• Two thirds agree that both retirement security and economic security are important and the two must be reconciled
• One tenth believe retirement security is more important than economic security
• Three quarters agree that putting money in retirees’ pockets in the future is more important than keeping employer contributions low now
Virtually all Alberta members and non-Alberta members disagree with Alberta Finance Minister Ted Morton’s belief that the private sector is the best source of pension plans
The vast majority also say they do not trust the private sector to deliver safe, low-cost, high-return plans and one third say they do not trust the private sector “at all”.
Among those members who have already retired, close to three quarters retired before the age of 65 (on average, at 62).