Living in financial security after your career – difficult in Canada

With this article, we want to share our frustration and shame. We will explain what to expect as a Canadian citizen if you are not prepared for retirement and clear up some confusion about Canadian pension programs.

The Old Age Security (OAS) program is a three-part program: the Old Age Security pension, a Guaranteed Income Supplement and an Allowance (including the survivor allowance). The OAS pension is a monthly benefit that is independent of the income or earnings available to persons 65 years of age and over in Canada. Statistics Canada reports that about six million seniors receive Old Age Security benefits. This plan is important for low-income people who have not been able to save for retirement during their working lives. In most cases, women are the most affected.

According to the Canadian Labour Congress (CLC) “After a lifetime of hard work, nobody should have a hard time making ends meet. It is difficult to save for retirement, and good, stable jobs with a workplace pension are hard to come by.”

What do you think? When the CLC gets involved, I think the situation is fairly serious. Remarkably, 1 in 3 Canadians must work after the age of 70. Is it possible to be free and have peace of mind after working a lifetime? We want to give all Canadians the right to a fair pension plan: a defined benefit pension plan.

The OAS program is indexed to inflation rather than average earnings. This has a negative impact: the relative value of the OAS program decreases when compared to the earnings of Canadian workers. In other words, seniors are finding it increasingly difficult to get by.

Some of you might say, “Wait a minute! Are there no other supplements for seniors?” Yes, there is the Guaranteed Income Supplement (GIS), which is a tax-free monthly benefit for low-income OAS pensioners living in Canada.

After creating a financial assistance instrument like the GIS, it is important to know that it has become less accessible in recent years. If the senior in question had other income such as the Canada Pension Plan or Registered Retirement Savings Plan, the GIS is reduced by 50 cents on every dollar. Therefore, the GIS does not really help them.

How is it that in Canada, the 18th richest country in the world, out of 193 countries, with an average income of about $48,604, we are not able to offer our citizens a comfortable and secure pension for life?

In Canada, the latest census showed that 13% of the population is 65 or older and, for the first time, there are more seniors than people under 15 years of age. We can anticipate that with an older population, there will be more people leaving the workforce and more demands for social services.

With an aging population, taxed social services and government benefits that are less accessible than we had hoped for, you are probably wondering: how can we fix this problem? We have to fight for defined benefits (DB).

Research by the Healthcare of Ontario Pension Plan (HOOPP) shows that:

That pension plans also help reduce senior poverty and an individual’s reliance on government assistance. While nearly 50% of seniors who don’t have a defined benefit (DB) pension rely on the government for financial support, only about 10% to 15% of seniors who receive a DB pension receive government assistance.

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We want a fair pension plan for all Canadians. We want Canadians to enjoy their retirement as everyone has dreamt; a small place that makes you feel good every day. You deserve to make your dreams come true after a career that will have spanned more than half your life. You deserve a secure retirement with your family and loved ones. We believe that a DB pension is THE way to ensure a certain and stable future.

Nobody deserves to be poor after a full career.

Union of Canadian Transportation Employees

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