A conservative spokesman referred the Star to the recently defeated budget document, which contains measures to add $300 million to the GIS and outlines a framework for defined contribution Pooled Registered Pension Plans (PRPPs), the Conservatives’ preferred method.
But pensions are likely to continue popping up in campaign speeches, as politicians tailor their messages to appeal to the sandwich generation of middle aged professionals caring for young children and aging parents, often under the same roof.
“I think there are significant concerns regarding CPP and the ability to continue financing it,” says Sarson, who works in financial services in Toronto. “As baby boomers get older — from a health care perspective, from a CPP perspective — the cost of our services is going to go up.”
Seniors are set to outnumber children in Canada by 2015, according to Statistics Canada. Currently, two out of every three Canadians have no workplace pensions and 1.6 million seniors are living on less than $15,000 a year in government support, said Eng.
Two-thirds of Canadians have not saved enough money to retire on, said Glen Hodgson, Senior Vice-President and Chief Economist with the Conference Board of Canada.
“There’s going to be ongoing pressure on our pensions, both public and private, as there are fewer and fewer of us working to support more and more pensioners,” he said.
Hodgson added the current investment climate is layered with risk due to high public sector debt, the effect of the Japan earthquake on global supply chains, inflation due to increasing energy and food prices, and political turbulence in North Africa.
He said pension fund earnings should improve this year, and interest rates are due to rise mid-year.
“There’s a reason why our finance ministers have been debating this over the last number of years and why some political parties are putting it back on the table,” said Hodgson. “You can have a big debate about whether it’s public sector or private sector’s responsibility to fill that gap.”
Ontario’s finance minister, Dwight Duncan, has said he supports expansion of the CPP. Quebec moved toward implementing a voluntary contribution system last month, as finance minister Raymond Bachand tabled a budget that outlines major changes to the Quebec Pension Plan.
Eng said the majority of CARP members prefer a public solution: “It should be a defined benefit plan, it should be a universal enlarged plan and it should be run by the public sector.”
While pensions have attracted public and political attention, it’s unlikely the issue will change the way people vote, added Wiseman.
Keywords: pension reform, GIS, seniors, PRPP
