Saskatchewan Pension Plan
The current situation for many baby boomers heading into retirement is one of wondering if there will be enough money to maintain their current standard of living. Moving ahead greater pressures are not only going to be exerted on Canada's already retired seniors and those soon to be, but also on Canada's current crop of 30 - 40 year olds. A new study conducted by a Concordia University is raising serious doubts as to whether Canada's retirement income system can keep up with demand.
For seniors, in the absence of concrete changes, there could be a marked increase in the number of senior citizens living in poverty. But taking the easy road of simply dumping more of the cost onto younger Canadians is not the answer. Even if the payout rates stayed at the current rates, Canada's public plans are not keeping pace as they are being slowed by the ongoing economic slump, Canada's declining birthrate and the fact that Canadians are increasingly living much longer and thus are drawing even more from the system.
Younger Canadians are showing greater and greater doubts about their own situations come retirement. There are now fewer young Canadians paying into an RRSP than there were in 1997. Generation X and Y have seen wages stagnate and have little extra money to sock away into an RRSP. This effect is multiplied when we also consider that private companies are far less likely today to help fund a pension plan than just a decade ago. Less than 25 per cent of Canadians working for a private company partake in an occupational pension plan.
One potential solution is for a Canada-wide adoption of something along the lines of the Saskatchewan Pension Plan. The Saskatchewan Pension Plan was enacted in 1986 to help provincial residents like homemakers have a retirement income that they can draw upon. Such a plan if extended with greater financial incentives and higher contribution ceilings could help bridge the gap for many Canadians.