In the Globe and Mail on Tuesday MLI senior fellow Philip Cross and Sprott School of business professor Ian Lee take issue with arguments in favour of major Canada Pension Plan expansion that play to Canadians’ fears about their retirement. Instead, they find a “chronic over-estimation of the income needed to retire … and an under-estimation of the huge value of the assets Canadians hold.”
Ignore the scare tactics. Canadians can afford retirement
There is a growing debate concerning the adequacy of Canada’s pension system to meet the challenge of the impending surge of retirees, known as the boomers. The latest contribution, Michael Wolfson’s self-described “Not-so-Modest Options for Expanding the CPP/QPP,” replicates and expands upon the recommendations of a number of CPP pension advocates that appears to be a solution in search of a pension problem.
Eliminating elderly poverty was one of the great public policy triumphs of the late twentieth century. Indeed, Prof. Wolfson’s own results show that incomes for people earning less than $25,000 rise substantially when they retire. For middle income people earning up to $50,000, pensions replace between 80 per cent and 100 per cent of earned income. The only group of retirees which see an income drop of more than one-third are those earning more than $100,000, who lower the overall average drop in retirement incomes to the 25 per cent headlined in the study. Do these results call for a massive overhaul of our pension system? … to read the rest of Cross and Lee’s op-ed click here.