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Legal for Life: Why Canadians Need a Lifetime Retirement Saving Limit

Author

Listed:
  • James Pierlot

    (Pierlot Pension Law)

  • Faisal Siddiqi

    (Buck Consultants)

Abstract

Canadian tax rules allow accumulation of retirement savings in “tax assisted” plans, including defined-benefit (DB) pension plans, defined-contribution (DC) pension plans and RRSPs. These plans are intended primarily for workers with “middle class” incomes, who will not receive enough pension income from programs such as Old Age Security (OAS) and the Canada/Quebec Pension Plan (C/QPP). But more than 12 million Canadian workers do not participate in a DB pension. Many will need to save for retirement, and must do so in DC pension plans and RRSPs. In the current environment of low interest rates, an aging population, and increasing longevity, these workers have less time to save for retirement and must save more. But can they?

Suggested Citation

  • James Pierlot & Faisal Siddiqi, 2011. "Legal for Life: Why Canadians Need a Lifetime Retirement Saving Limit," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 336, October.
    • Handle: RePEc:cdh:commen:336
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    File URL: https://www.cdhowe.org/legal-life-why-canadians-need-lifetime-retirement-saving-limit-0
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    References listed on IDEAS

    as
    1. Kevin D. Moore & William Robson & Alexandre Laurin, 2010. "Canada’s Looming Retirement Challenge: Will Future Retirees Be Able to Maintain Their Living Standards upon Retirement?," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 317, December.
    2. James Pierlot, 2008. "A Pension in Every Pot: Better Pensions for More Canadians," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 275, November.
    3. Tammy Schirle, 2008. "Greener Pastures: Understanding the Impact of Retirement Incentives in Defined-benefit Pension Plans," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 262, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Ake Blomqvist & Colin Busby, 2012. "Better Value for Money in Healthcare: European Lessons for Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 339, January.
    2. William Robson & Alex Laurin, 2014. "Ottawa’s Hidden Deficit: The Widening Gap between Federal Government Pension Liabilities and Assets," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 406, April.
    3. Malcolm P. Hamilton, 2014. "Evaluating Public-Sector Pensions: Are Federal Public Servants Overpaid?," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 405, April.
    4. William B.P. Robson, 2012. "Fixing MP Pensions: Parliamentarians Must Lead Canada's Move to Fairer, and Better-Funded Retirements," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 146, January.
    5. Jana Steele & Mel Bartlett & Angela Maserolle, 2014. "Target- Benefit Plans in Canada – An Innovation Worth Expanding," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 411, July.
    6. James Pierlot & Alexandre Laurin, 2012. "Pooled Registered Pension Plans: Pension Saviour - or a New Tax on the Poor?," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 359, August.
    7. Alexandre Laurin, 2014. "The Overlooked Option for Boosting Retirement Savings: Higher Limits for RRSPs," e-briefs 183, C.D. Howe Institute.
    8. Keith Ambachtsheer & Keith Waitzer, 2011. "Saving Pooled Registered Pension Plans: It's Up To the Provinces," e-briefs 128, C.D. Howe Institute.
    9. Alex Laurin & William Robson, 2013. "Prudence and Opportunity: A Shadow Federal Budget for 2013," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 375, March.
    10. Alex Laurin, 2017. "Off Target: Assessing the Fairness of Ottawa’s Proposed Tax Reforms for “Passive” Investments in CCPCs," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 493, October.
    11. William B.P. Robson & Alexandre Laurin, 2015. "Ottawa's Secret Debt: The Burden and Risks of Federal Employee Pensions," e-briefs 208, C.D. Howe Institute.
    12. William Robson, 2012. "Ottawa's Pension Abyss: The Rapid Hidden Growth of Federal-Employee Retirement Liabilities," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 370, December.
    13. Alexandre Laurin & William B.P. Robson, 2011. "Ottawa's Pension Gap: The Growing and Under-reported Cost of Federal Employee Pensions," e-briefs 127, C.D. Howe Institute.
    14. William B.P. Robson & Alexandre Laurin, 2012. "Federal Employee Pension Reforms: First Steps - on a Much Longer Journey," e-briefs 140, C.D. Howe Institute.
    15. William B.P. Robson & Alexandre Laurin, 2018. "Retiring Employees, Unretired Debt: The Surprising Hidden Cost of Federal Employee Pensions," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 514, May.

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    More about this item

    Keywords

    Pension Papers; Canada; defined-benefit (DB) pension plans; defined-contribution (CD) pension plans; RRSPs;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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