Aging Population and Canadian Public Pension Plans
August 1, 1994
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Summary
Canadian public pension plans are run on a "pay-as-you-go" basis. As the baby boom ages, contribution rates for the two main plans are projected to rise significantly, from their current level of around 5 percent of eligible earnings to over 13 percent by 2030. An alternative is to set contribution rates at their underlying long-term levels. Such a policy would imply a significant rise in current contribution rates, to 10-10½ percent of eligible earnings, but would allow the system to cope with the retirement of the baby boom generation without recourse to borrowing or significant increases in contribution rates.
Subject: Aging, Expenditure, Health, Labor, Pension spending, Pensions, Population and demographics, Wages
Keywords: Aging, benefit, benefit rate, contribution rate, cost, CPP benefit, CPP pension, earnings, pay-as-you-go rate, Pension spending, Pensions, rate, scheme cost, Wages, WP
Pages:
24
Volume:
1994
DOI:
Issue:
089
Series:
Working Paper No. 1994/089
Stock No:
WPIEA0891994
ISBN:
9781451851236
ISSN:
1018-5941
