Coherent Identifier About this item: 20.500.12592/jb0335

A new pension plan for Canadians

2011

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Summary

Finally, I compare other important features and effects of the three plans, including the level and security of the retirement benefits, the labour market effects and the interaction with the anticipated TFSA effects. [...] In the Actuarial Report (25th) on the Canada Pension Plan, the Chief Actuary projects a continuation of this trend in the decades to come (Office of the Chief Actuary 2010, 91).5 Increasing longevity adds directly to the cost of the pensions promised in public pension plans and in DB RPPs. [...] In the same way, it increases the contribution level required to attain a given level of annuity income in RRSPs and DC RPPs.6 Increasing and uncertain longevity has added to the cost and riskiness of DB plan sponsorship, discouraged the provision of RPPs and contributed to a world- wide shift from DB to DC plans. [...] The attractiveness of saving in a TFSA as opposed to an RRSP (or RPP) depends on the tax rates facing the saver in the years when the contribution is made and when the proceeds are with- drawn. [...] The DB plan pro- vides a benefit of 15 percent of earnings up to the YMPE (or increase in the CPP/QPP benefit rate from 25 percent to 40 percent) plus a benefit of 25 percent of earnings between one and two times the YMPE.

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government education economy taxation finance investment business employment labour old age pensions pensions retirement retirement income early retirement pension government budget old age security defined benefit rate of return employee retirement benefits wage and benefit rrsps rrsp registered retirement savings plan pension trusts 401(k) plans

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