In addition, 69 per cent of Canadians believe the federal government should take the lead in ensuring “Canadians can retire – either through savings programs or income supports.”
One of the reasons is that most Canadian workers do not have a workplace pension plan. Coverage under these plans has dropped from 45% of employees in 1992 to just 38.8% in 2010. The reality is that 11 million Canadian workers don’t have a workplace pension plan.
To make matters worse, most Canadians are not making up for their lack of a pension plan by saving for retirement on their own. In 2009, only 31% of those eligible to contribute to an RRSP actually did so. This number dropped significantly in 2010 to just 26%. Statistics Canada reported recently that just 24% of tax filers made an RRSP contribution in the 2012 tax year.
Among people about to retire — i.e., those age 55 to 64 — the typical person with an Registered Retirement Savings Plan has saved about $55,000. That’s enough to provide a monthly income of about $250.
The survey notes that “Canadians view pension enhancements as an investment not harmful to the economy.This contrasts with Ottawa’s position – last December, the provincial finance ministers met with then-federal finance minister Jim Flaherty. Pension reform was discussed but was dismissed by Mr. Flaherty. The federal government’s position was that the economy was still weak and it wasn’t the time to increase CPP contributions.
- First, of the nearly six million Canadians who contributed to an RRSP in 2012, more than two million also participated in a pension plan. Their RRSP contributions would have been lower, so the remaining RRSP contributors must have put in more than $6,000, on average.
- Second, millions of RRSP contributors also put money into a TFSA. As of 2011, 8.2 million Canadians had a TFSA and based on the year-by-year growth in the number of accounts, there are probably more than 10 million people that now have TFSAs.
- Finally, the average Canadian wage is just over $50,000, so setting aside $6,000 (or more) for retirement is quite a substantial sum.