Advanced Search
MyIDEAS: Login to save this book chapter or follow this series

The Canada Pension Plan: Looking Back at the Recent Reforms

In: The State of Economics in Canada: Festschrift in Honour of David Slater

Contents:

Author Info

  • James E. Pesando

Abstract

James E. Pesando looks at the 1998 package of reforms to the Canada Pension Plan (CPP) that the federal government and the provinces implemented after extensive consultation. Most significantly, these reforms included: a sharp increase in the combined employer-employee contribution rate, from 5.85 per cent in 1997 to the steady-state rate of 9.9 per cent in the year 2003 and beyond, which will result in a much larger reserve fund — estimated to rise to about five years’ worth of benefits; and the establishment of an independent, trusteed CPP Investment Board with a mandate to invest in marketable securities, including equities, in order to obtain a higher rate of return on the enlarged CPP reserve fund. The benefit reductions in the 1998 package were relatively modest. Pesando argues that the case for the 1998 CPP reform was made entirely in terms of intergenerational equity. Surprisingly, efficiency arguments played virtually no role in the debate. Pesando questions whether the actuarial assumptions with respect to inflation and rates of return that underlie the reforms are overly optimistic and whether additional increases in premiums or reductions in benefits will be required. In his view, the next round of debate on the reform of public pension programs is already under-way in other countries like the United States. He expects that the issue will soon resurface in Canada and that policy options like benefit reductions, raising the retirement age, and partial privatization of benefits, which were dismissed in the last round, will once again be on the table.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.csls.ca/events/slt01/pesando.pdf
Download Restriction: no

Bibliographic Info

as in new window

This chapter was published in: Patrick Grady & Andrew Sharpe (ed.) The State of Economics in Canada: Festschrift in Honour of David Slater, Centre for the Study of Living Standards, pages 137-150, 2001.

This item is provided by Centre for the Study of Living Standards in its series The State of Economics in Canada: Festschrift in Honour of David Slater with number 07.

Handle: RePEc:sls:secfds:07

Contact details of provider:
Postal: 151 Slater Street, Suite 710, Ottawa, ON K1P 5H3
Phone: 613-233-8891
Fax: 613-233-8250
Email:
Web page: http://www.csls.ca/
More information through EDIRC

Order Information:
Email:
Web: http://www.csls.ca

Related research

Keywords: Retirement; Pensions; Public Pensions; Canada Pension Plan; CPP; Intergenerational Equity; Retirement Age;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. John H. Cochrane, 1999. "New Facts in Finance," CRSP working papers 490, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
  2. Estelle James & Gary Ferrier & James H. Smalhout & Dimitri Vittas, 2000. "Mutual Funds and Institutional Investments -- What Is the Most Efficient Way to Set Up Individual Accounts in a Social Security System?," NBER Chapters, in: Administrative Aspects of Investment-Based Social Security Reform, pages 77-136 National Bureau of Economic Research, Inc.
  3. Samwick, Andrew & Feldstein, Martin S., 2000. "Allocating Payroll Tax Revenue to Personal Retirement Accounts to Maintain Social Security Benefits and the Payroll Tax Rate," Scholarly Articles 10456096, Harvard University Department of Economics.
  4. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
  5. Bovenberg, A.L. & Gordon, R.H., 1996. "Why is capital so immobile internationally? Possible explanation and implications for capital income taxation," Open Access publications from Tilburg University urn:nbn:nl:ui:12-73564, Tilburg University.
  6. Martin Feldstein & Andrew Samwick, 2000. "Allocating Payroll Tax Revenue to Personal Retirement Accounts to Maintain Social Security Benefits and the Payroll Tax Rate," NBER Working Papers 7767, National Bureau of Economic Research, Inc.
  7. Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 905-26, Sept./Oct.
  8. R. Mehra & E. Prescott, 2010. "The equity premium: a puzzle," Levine's Working Paper Archive 1401, David K. Levine.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:sls:secfds:07. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Whitney Hamilton) The email address of this maintainer does not seem to be valid anymore. Please ask Whitney Hamilton to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.