The pillar of retirement in Canada

 These are the pillars of the Canadian Retirement Income System

Canada’s Public Pension Systems (Pillar 1)

Public Pensions:

•        Canada Pensions Plan (CPP)

•        Quebec Pension Plan (QPP)

•        Old Age Security Program (OAS)

•        Guaranteed Income Supplement Program (GIS)

Employer-Sponsored Pension Plans (Pillar 2)

Private Pensions:

•        Registered Pension Plans

•        Retirement Savings Plan

Personal Retirement Savings (Pillar 3):

Individual Pensions:

•        Registered Retirement Savings Plan (RRSP)

•        Tax-Free Savings Plan (TFSA

Living well (Pillar 4)

•      Health

•      Family

•      Sense of Purpose

The first three pillars have to do with money and have been credited for alleviating deep poverty amongst older Canadians, They do not act as a full replacement source of income, but they do currently replace approximately 46% of an average Canadian’s pre-retirement earnings. This is well below the Organization for Economic Co-operation and Development average of 63%.

 

Why add the fourth pillar? While some of us will spend the majority of our retirement years in good health, others may enter retirement in poor health or face declining health or personal circumstances that strain their available economic resources. Those of us who want to age at home may find ourselves in positions where we have out-of-pocket costs associated with needed home modifications, home care or transportation. Those of us who experienced repeated financial emergencies or shocks may be at risk of facing even greater financial insecurity as we age.

 

Canadians need help in finding more public and private options that allow for financial security through later life. As record numbers of Canadians  enter retirement over the coming two decades, strategies and initiatives that seek to address these issues will continue to remain important and require more attention from the public and private systems.