Pension contributions are rising, but what if you don’t have a pension?

Are Canadians saving enough for retirement?  What can contributions to retirement plans tell us about saving levels?

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Houston, We Have a Retirement Problem

Last week the Conservative government announced it was open to studying and consulting on potentially allowing voluntary contributions to the CPP.

Seeing how the same government has for years been resisting calls to improve the CPP, its new openness smells pretty fishy. Just months ahead of an election (and in no way related to the polls showing public support for CPP expansion approaching universal levels), the Conservative government has offered a program that uses the well-known CPP name, but that in fact bears no resemblance to the CPP Canadians respect and support (the government’s CPP proposal is voluntary, employee-funded only, and insecure – the real CPP is none of those things).

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The Diminished Expectations of Age

On May 14th, Power Financial CEO Jeffrey Orr told shareholders that “the vast majority of Canadians are on track to sustain their standard of living in retirement,” and cautioned against implementing the proposed Ontario Retirement Pension Plan (ORPP) or expanding the Canada Pension Plan (CPP).  Orr’s remarks to Power Financial’s annual meeting (fittingly held at the Shangri-La Hotel in Toronto) were covered in the Toronto Star and the Globe and Mail.

That Power Financial, which controls Great-West Life and Investors Group, would oppose expanding public pensions isn’t particularly noteworthy.  As Bruce Little recounts in his book Fixing the Future, insurance companies and financial institutions actively resisted the creation of the CPP in the 1960s, and have periodically fought attempts to improve it since then.  What makes the news coverage of Orr’s remarks worth mentioning is that newspapers again uncritically repeated the findings of a problematic February 2015 study by McKinsey and Company entitled, “Building on Canada’s Strong Retirement Readiness.”

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