Browse IFS
Publication types
IFS event
Universal contributory earnings-linked public pensions: a Canadian policy perspective
Next_event
Date: 12:30 06 June 2011 - 13:45 06 June 2011
Type: IFS Seminar
Venue: Institute for Fiscal Studies  [see map]
Price: members: Free; nonmembers: Free

Current and growing deficiencies in many workers' ability to maintain their accustomed living standards in retirement have evoked varied proposals for reform of Canada's retirement income system. My study focuses on proposals for expanding the retirement benefits of the Canada Pension Plan (CPP)-a universal, mandatory, contributory, earnings-linked public pension scheme. I undertake comparative analysis with proposals for reforms affecting workplace pensions and individual savings. I begin by reviewing key policy questions for the retirement income system and describing essential features of several proposals for CPP benefit expansion. I then use these "Big CPP" proposals as a basis to assess the design issues for expanding CPP benefits and the implications for other components of the retirement income system. The paper assesses each of the major private and public savings vehicles based on multifaceted criteria for a well-performing retirement income system; a mandatory public scheme with defined benefits ranks most highly on almost all criteria other than individual flexibility. Additional behavioural and institutional factors also support the use of mandatory public pensions: myopia in savings, individual investment behaviour, scale economies and costs of fund management, adverse selection and annuitization costs, the Samaritan's Dilemma, and labour market incentives. I next provide an overview analysis of key design issues for the expansion of CPP retirement benefits. Major issues include the desirable scale of expansion for both the percentage of insurable earnings and the insurable earnings ceiling; mandatory versus voluntary coverage and options; the allocation of investment return risk; and the phasing-in of higher premiums and benefits. In summary, diverse empirical and analytical considerations support the expansion of CPP retirement benefits as the centrepiece of pension reform to achieve benefit adequacy for all retirees.

If you would like to book a place or have any queries about this event, please contact our events team.
Events

The following links should give you any extra information you may need with regard to IFS events.