Canada Ranks 18th in Pension Index as Marsh Urges Longer Work and Employer Contributions
Updated
Updated · Financial Post · Oct 21
Canada Ranks 18th in Pension Index as Marsh Urges Longer Work and Employer Contributions
1 articles · Updated · Financial Post · Oct 21
Summary
Canada scored 70.6 out of 100 and placed 18th among 55 countries in Marsh’s global pension index, earning a B rating despite what the firm called a fundamentally strong retirement system.
Marsh said the biggest weakness is sparse private-sector workplace coverage: only about 10% of private workplaces offer defined-benefit plans, leading it to propose mandatory employer pension contributions.
Longer working lives would also bolster sustainability by keeping older Canadians contributing and delaying benefit collection; labour-force participation between ages 60 and 65 has doubled over the past 25 years.
Household and public finances add pressure: Canada has the highest household debt in the G7, while Ottawa needs to contain debt to protect OAS and GIS, which equal about 3% of GDP.
Demographic strains are widening as Canadians aged 65 and over rise to 20% of the population and the birth rate falls to 1.4 per woman, pushing Marsh to also call for higher productivity and more immigration.
How can Canada sustain its pay-as-you-go retirement programs when facing a shrinking workforce, falling birth rates, and slowing economic growth?
With private pensions shrinking and household debt soaring, is working past 65 becoming a financial survival requirement rather than a healthy lifestyle choice?
Will the shift away from guaranteed employer pensions ultimately force a radical redesign of how society funds aging and retirement?