Advanced Search
MyIDEAS: Login

Strengthening Fairness and Funding in the Canada Pension Plan: Is Raising the Retirement Age an Option?

Contents:

Author Info

  • Martin Hering
  • Thomas R. Klassen

Abstract

This paper seeks to contribute to a forward-looking debate on possible reform options for the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP). Even though it focuses on the CPP, most of its analysis applies to the QPP as well since the two programs are largely identical. This paper does not provide a broad survey of all possible reform options, but rather analyzes one vital option that has received insufficient attention in previous debates: raising the normal retirement age from 65 to 67 years. A discussion of this option is warranted not only because it could prevent future financing problems in Canada’s public pension insurance programs, but also because it could improve fairness across generations. The significant increase in life expectancy raises the question of whether the current retirement ages of 60 years, for earliest CPP and QPP benefits, and 65 years, for full benefits, are too low. Should future generations pay for the longevity increases of the current generation of workers, or should current workers share the costs by retiring at a later age? We conclude that raising the normal age from 65 to 67 years—and the earliest age from 60 to 62 years—is a financially effective, intergenerationally fair, and politically acceptable option for improving the CPP and for addressing the QPP’s problems. We suggest that the option of raising the retirement age needs to be discussed well before longevity increases or funding problems occur and that a broad consultation with stakeholders and citizens would be an essential part of a debate on raising the retirement age in Canada.

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://socserv.mcmaster.ca/sedap/p/sedap263.pdf
Download Restriction: no

Bibliographic Info

Paper provided by McMaster University in its series Social and Economic Dimensions of an Aging Population Research Papers with number 263.

as in new window
Length: 71 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:mcm:sedapp:263

Contact details of provider:
Postal: 1280 Main Street West, Hamilton, Ontario, L8S 4M4
Phone: (905) 525-9140 ext. 22765
Fax: (905) 521-8232
Email:
Web page: http://www.mcmaster.ca/economics/
More information through EDIRC

Related research

Keywords: pension systems; pensions; retirement; retirement age; life expectancy; Canada;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

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. James E. Pesando & Morley Gunderson, 1988. "Retirement Incentives Contained in Occupational Pension Plans and Their Implications for the Mandatory Retirement Debate," Canadian Journal of Economics, Canadian Economics Association, vol. 21(2), pages 244-64, May.
  2. Tammy Schirle, 2008. "Greener Pastures: Understanding the Impact of Retirement Incentives in Defined-benefit Pension Plans," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 262, May.
  3. Thai-Thanh Dang & Pablo Antolín & Howard Oxley, 2001. "Fiscal Implications of Ageing: Projections of Age-Related Spending," OECD Economics Department Working Papers 305, OECD Publishing.
  4. Schellenberg, Grant, 2004. "The Retirement Plans and Expectations of Non-retired Canadians Aged 45 to 59," Analytical Studies Branch Research Paper Series 2004223e, Statistics Canada, Analytical Studies Branch.
  5. Michael Baker & Jonathan Gruber & Kevin Milligan, 2001. "The Retirement Incentive Effects of Canada's Income Security Programs," Social and Economic Dimensions of an Aging Population Research Papers 65, McMaster University.
  6. Charles Brown, 2006. "The Role of Conventional Retirement Age in Retirement Decisions," Working Papers wp120, University of Michigan, Michigan Retirement Research Center.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Peter Hicks, 2012. "Later Retirement: the Win-Win Solution," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 345, March.

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:mcm:sedapp:263. 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: ().

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.