ECON 318 Lecture 5: Pensions II The modern era edited
9 Jul 2016
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Proponents of c/qpp enlargement or enrichment are not predicting poverty among retirees; they are concerned that middle and upper-middle earners are not saving enough for their retirement. Enough" in this perspective means that a significant percentage of retirees in coming decades could experience a drop in their standard of living of more than say 30% around the point of retirement. No serious student of the issues argues otherwise. Poverty is not the issue; income replacement is. Hence, several provincial governments and some federal interest groups support either an extension of the c/qpp or the introduction of province-specific plans that would build upon the existing c/qpp. For example, ontario"s plan, passed into legislation, will require a contribution of an additional 3. 8 percentage points of earnings, on earnings between ,000 and ,000. Such additional contributions will ultimately generate payouts that will reduce the drop in living standards between retirement and pre- retirement.
