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Sunday, February 5, 2012

OAS for the twenty-first century

The Prime Minister set off quite a little tempest in the Ottawa teapot of politics with his musings over the sustainability of our Old Age Security pension (OAS). It does seem reasonable to me that our government would be reviewing this element of our social safety net in light of changing demographics. But the opposition seems dead set against changes—even discussion of change.

Thirty plus years of retirement will become the norm for large segments of our population—a long time to be collecting a pension. Last year, I had two friends who turned a hundred years old (though one died during the year) and had been retired for some 35 years.

If the current trend in life expectancy holds, a significant portion of those born this year will be alive and healthy well into the twenty-second century. The new norm will be something like: start work at 22 to 25; retire at 55 to 65 and die between 95 and 105.

That’s a lot for a society’s tax system to handle. Will we really be able to afford to provide these folks with pensions under the current terms, especially ones they do not specifically contribute towards?

We shouldn’t wait until we’re under the gun to have these conversations. We live in a changing world—I thought progressives liked change.

For now, I’ll leave the mock outrage and trumped up criticism to the Grits and the Dippers. I’ll hold judgement on the future of the OAS until after I hear the specifics of what Prime Minister Stephen Harper’s Tories have in mind.

© 2012 Russell G. Campbell

 

4 comments — This is a moderated blog and comments will appear when approved. Please don’t resubmit if your comment doesn’t appear immediately, and please do not post material that is obscene, harassing, defamatory, or otherwise objectionable.

  1. I am holding judgement also but when I read things like this I do not hold out much hope.

    ‘All options are on the table’ but Conservatives won’t commit to MP pension cuts

    http://news.nationalpost.com/2012/01/31/all-options-are-on-the-table-but-conservatives-wont-commit-to-mp-pension-cuts/

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  2. Thank you Russ for highlighing this problem. My husband and I are retirees but are ready to work at any given notice such: contracts jobs like filling in for someone till a new person is hired..something to do.
    I see elderly people work at Walmart and are happy-at least to them they feel useful rather than sit on a chair waiting for death to knock.
    These people are doing simple things leaving the heavier work for the younger people.

    Read the story below

    William Watson: No! No! The status quo!

    William Watson Feb 3, 2012 – 6:57 PM ET


    http://fullcomment.nationalpost.com/2012/02/03/william-watson-no-no-the-status-quo/

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  3. "Will we really be able to afford to provide these folks with pensions under the current terms, especially ones they do not specifically contribute towards?"

    Your statement above says it all. Regardless of the age of retirement and number of years people live, it was said as if it's simply a given that somebody should (not would, but should) be providing somebody else with a pension at all. It's just become a given that such an entitlement should be provided by society at large, and that's scary.

    I contribute to my own retirement savings, and both my employer and I contribute to my defined contribution pension plan, and I try to become an informed investor to invest my savings and pension assets responsibly. There is no part of my retirement plans that depend on anything from the taxpayer.

    I'm all for helping out people in need, and I'm OK with people depending on CPP benefits, because it's a plan specifically paid into in order to receive a future benefit, but I have a problem when people just assume that some sort of benefit paid by the taxpayer will be provided. When people plan their retirement (or worse, fail to plan at all) with this in mind, and take less responsibility as a result, we create an even bigger culture of dependency and remove even more personal responsibility from society.

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  4. The point often overlooked in the hysteria over entitlements delayed or reduced is that someone, somewhere must produce the wealth that funds such nest eggs. No public or private pension plan, much less welfare state program, can expect to exist independent of the economy's ability to spare that amount of cash. If Canada could rid herself of government and special interests interfering in the economy we might all be able to retire at 50. This most gifted country is badly managed and it is likely those who complain the loudest who must bear the responsibility.

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