Even seniors who have done careful planning may be finding that their retirement plans are under severe pressure. Seniors are living longer yet savings may have been eroded by the severe depression. It was not surprising therefore to see that governments are reacting to these seniors’ concerns.

In December there was talk that Ontario was ready to consider a mega-pension plan.

Ontario is prepared to discuss every option to increase retirement income and broaden pension coverage, says Finance Minister Dwight Duncan – including an expansion of the Canada Pension Plan. He was meeting with fellow finance ministers to review research by Alberta economist Jack Mintz that was commissioned by Ottawa, as well as research done for Ontario by Bob Baldwin, a former researcher for the Canadian Labour Congress. Discussion of their reports will set the stage for further study and public consultations leading up to Council of the Federation meetings with premiers in the summer of 2010.

Fellow finance ministers from British Columbia and Alberta have been openly pressing for a national pension arrangement either linked to, or running parallel to, the Canada Pension Plan (CPP). However proposals for some form of mega-pension plan have raised the hackles of bankers and insurers.

Now Terence Corcoran is suggesting that the Canadian Association of Retired People (CARP) is over-reacting.

The implication is that the vast majority of Canadians are heading into retirement nightmares and need to be bailed out by another government income redistribution system — an implication that is not borne out by a half dozen studies recently commissioned by Ottawa. In a recent report on the studies assembled by Jack Mintz of the School of Public Policy at the University of Calgary on behalf of Finance Canada, the Canadian pension system looked far from being a nightmare. The studies found Canada’s pension system to rank well above the OECD average in terms of providing income security and replacement for the vast majority of Canadians. There are certainly gaps, although exactly where those gaps are remains an unresolved issue.

Susan Eng, Vice-President, Advocacy, at CARP disagreed with the tenor of Terence Corcoran’s article:

Mr. Corcoran argues that there is no need to fix Canada’s pension system. Leaving aside his opinion about the messengers who call for change – including one of Canada’s premier business schools with whom CARP is proud to keep company – the essence of his argument is that the experts engaged by the federal government think that Canada’s pension system does well enough for most.

But what would he propose for the rest? Even his Mintz report identified a significant number of people who are not saving enough. Anyone retiring without savings or a workplace pension is expected to live on $16,000 to $19,000 consisting of OAS and CPP/QPP topped up by GIS. That is fact, not rhetoric.

For those seniors, that is a very bleak and possibly a very long retirement future.

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