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Reforms Could Help Canadians Save For Retirement

A series of policy reforms would lend Canadians a hand to save for retirement without cutting into government revenue in the long run, says a report from The School of Public Policy. Its authors, Jack Mintz, Palmer Chair in Public Policy at the University of Calgary, and Thomas Wilson, a Professor Emeritus of Economics at the University of Toronto, suggest expanding the Canada Pension Plan (CPP) to allow larger contributions β€’ shared by employers and employees or covered entirely by employees β€’ that would, in turn, allow retiring workers to draw a larger maximum pension, rather than having to rely on the guaranteed income supplement. As well, they call for making CPP contributions deductible from taxable income, like RRSP investments, to encourage workers to maximize contributions. They also recommend increasing the eligibility age for CPP benefits to 67 years of age, similar to old-age security eligibility. Other suggestions include making the tax treatment of group RRSPs the same as it is for defined contribution registered pension plans (RPP), increasing the age limit for RPP and RRSP contributions from 71 to 75 years to reflect the increase in life expectancies, and altering RRSP contributions to allow lifetime averaging. They say β€œthe reforms need not be far-reaching to have a meaningful impact and they need not be costly, either." The report is at Policy Reforms

Courtesy of Benefits and Pensions Monitor website News Alerts

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