Gen Squeeze worked with leaders in the financial sector to coordinate our calling on provincial and federal finance ministers to make multi-faceted improvements to pension policy – both for the benefit of today’s retirees, and today’s younger workers who need to save. Our collaboration was driven by the policy evidence we feature in our existing recommendations on saving for retirement.
Partners converged on four points, which we published in a June 1st letter in newspapers across the country.
1. Compared to other policy issues in Canada, retirement income security measures are reasonably strong. This is true both from an intergenerational perspective, and in terms of supporting seniors to live above poverty. Retirees report the lowest rates of low-income status of any age group in the country, and Global AgeWatch ranks Canada among the very best countries on the planet to grow old.
By contrast, policies relating to medical care and housing raise more concerns about intergenerational fairness than does the Canada Public Pension plan. That’s why we are currently organizing around housing policy in our #CodeRed campaign.
2. Building on a solid policy foundation, retirement income security can be improved. Although the Guaranteed Income Supplement (GIS) and Old Age Security are strong at replacing income for low-income Canadians, we must remain committed to ensure that the amount of income the GIS provides is adequate. For this reason, the partners to the letter applaud federal commitments to increase the Guaranteed Income Supplement (GIS), and recommend protecting retirees living alone from risks that may materialize when the Canada & Quebec Public Pensions are clawed-back from surviving spouses following the death of a partner.
3. Existing evidence suggests that a group of modest and middle-income younger workers today may struggle later in life to replace income in retirement because they are not part of a workplace pension plan. This reflects changing access to workplace pension plans, and the fact that employment is precarious for many young workers who move from contract to contract as they try to make ends meet. In response, the partners to the June 1st letter recommend a national expansion to the Canada & Quebec Public Pensions to help this group of younger Canadians save.
While the letter does not include a specific policy recommendation, Gen Squeeze is on record conditionally encouraging the federal government to double what is called the Yearly Maximum Pensionable Earnings limit. This change would require younger Canadians and their employers to contribute more to retirement savings. We believe this change would be optimal if governments also introduced policy to help reduce the costs of housing, child care, parental leave and postsecondary debt so that Canadians had more money to save when they are young adults.
4. Partners in the June 1st letter urge employers to renew commitments to pension security by organizing access to retirement savings plans at their workplaces.
In sum, Gen Squeeze is proud to have worked with industry partners to call for an expansion of public policy to increase security for low-income seniors, enhance saving for modest and middle-income Canadians, and renew commitment among employers to contribute to retirement security through their remuneration packages.