Briefing

Canada’s pension system ranks in top 10 globally, but only gets a B

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The Melbourne Mercer Global Pensions Index (MMGPI) rates the Netherlands and Denmark as the best in the world, followed by Australia. The annual report rated Canada’s system highly for its governance and operations, as well as the level of coverage it provides to citizens. But the country performed relatively poorly on whether its system will be able to continue providing benefits in the future. (The Logic)

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Talking point: The report suggests Canada’s performance would be improved by increasing residents’ saving levels, and reducing both household and government debt. It also recommends trying to increase the proportion of older residents who are working, as the population lives longer. According to the United Nations’ 2019 World Population Prospects study, Canadians born between 2015 and 2020 have a life expectancy of 82.22 years, up five months from those born in the previous half-decade. The country’s workforce participation rate for seniors is already trending in the direction the MMGPI report suggests: one in five Canadians aged 65 and older worked in 2015, double the rate in 1995, according to Statistics Canada census data. And the current Liberal government has expanded the pension system to deal with the aging population, as well as its lowering of the retirement age from 67 to 65 years. In January, employers’ and workers’ contributions to the Canada Pension Plan Investment Board increased; they will rise to 5.95 per cent by 2023, compared to 4.95 per cent in 2018.