Fred Vettese, Morneau Shepell’s Chief Actuary, has released a report titled “The Canada Pension Plan: Part – Past and Present”. The report examines the history behind the CPP and the drivers of its evolution.
“There are evident parallels between the resistance that greeted the original CPP implementation and present-day arguments against expansion,” said Fred Vettese, Chief Actuary, Morneau Shepell. “This provides an opportunity to assess the events that are now unfolding from an historical perspective.”
The report highlights a variety of factors that influenced the expansion. Among them:
- Pressure from labour groups
- Shortcomings in Pillar 3 savings
- Intent to raise standard of living for retired workers
- Canada’s international shortcomings
- The aging population
According to Satistics Canada, the ratio of seniors to the working population has risen from 13.3 per cent in 1966 to 26.5 per cent in 2016. By 2036, Vettese believes the number will be up another 40 per cent.
As far as enhancements to the CPP go, Vettese says the middle class needs the shift towards a public pension system.
“If Canadians were far more comfortable in dealing with financial matters surrounding retirement, then maybe CPP enhancement would not have been necessary,” said Vettese. “That, however, is not the case and a bigger CPP is the simplest way to mitigate future problems. Once we get used to the bigger CPP, we expect it will become an integral part of Canadian culture.”