OTTAWA (Reuters) - The government launched public consultations on Wednesday on reforms to the public pension system in a bid to help an aging work force save more for its retirement.
A recent study commissioned by the Conservative government found that, by international standards, Canadians are squirreling away enough money for their senior years and that creating new savings instruments should not be a policy priority.
But others have raised the alarm that some middle-income and lower-income workers are in danger of living in poverty in their old age if they don’t increase their savings now.
“I think we need to listen to Canadians, quite frankly,” Finance Minister Jim Flaherty told reporters.
He said the mandatory Canada Pension Plan, to which all workers automatically contribute, is well-funded and sound for at least 75 years, so “extreme prudence” would be exercised in any changes made to the system.
“If one makes changes, these are changes that are going to last a generation or more.”
Flaherty invited the public to comment on four broad areas of discussion:
- Expanding the mandatory Canada Pension Plan
- Creating a new voluntary Canada Pension Plan
- Exploring options for private insurers to get involved in the pension system
- Assessing the costs of existing retirement savings plans
The federal government and its provincial and territorial counterparts will discuss the results of the consultations in a meeting in May. Any changes made to the system must be done in conjunction with the provincial governments, which could slow down any decision making.
However, Flaherty said he expected to see some “direction and advances” on the pension reform issue this year.
Reporting by Louise Egan; editing by Peter Galloway