Eligibility changes needed for public retirement programs: study

Canada is out of line with its G7 counterparts and a number of other industrialized countries when it comes to retirement.

Twenty three high income countries have been increasing their eligibility for public retirement programs but Canada isn’t doing anything.

A new study from the Fraser Institute argues that will put a lot of financial pressure on the government in the coming decades.

Moving the age of eligibility is seen as a way to offset the high cost to government of a greying population.

Report author Jason Clemons said the country needs to do things now to prepare for the inevitable costs down the road.

“When these cost pressures really hit us, which again is not for another 10 or 12 years, then we’re going to be in a much more difficult position,” he said.

Why should people who have been contributing their whole life have to work longer? Clemons said they shouldn’t.

“The Canada Pension Plan for example, which has some level of prepayment, is going to be fine,” he said.

But Clemons argued the problem with Old Age Security and the related programs is that there is no pre-funding, and people are living much longer.

“If we had indexed our age of eligibility in 1966 when we introduced the Canada Pension Plan, the age of eligibility for retirement would be 72 today,” he said.

Clemons said the country doesn’t even necessarily need to move the age of eligibility, but there at least needs to be a dialogue, adding any changes shouldn’t be sprung on people, changes need to made for people decades away from retirement.