“It doesn’t pay to get old”
Date published : October 30, 2009 - Iroquois Falls, Ontario
Like all retired workers, Réal and Ken were counting on stable income for the rest of their lives. It was hardly an unreasonable expectation. As employees of the Abitibi paper mill in Iroquois Falls, Ontario, they had been contributing to the pension plan for decades. But earlier this year they got surprising bad news: their pensions were going to be reduced by as much as 50%.
They are far from being alone. The market collapse has exposed the weakness of Canada’s pension system – and millions of Canadians are now being forced to radically downsize their retirement plans.
• Out of a total workforce of 17.6 million, about 11 million Canadians – 60% of the workforce - have no pensions at all.
• Only 4 million Canadian workers have registered retirement savings plans.
• 4.5 million Canadians have defined pension plans that guarantee pension income until death. 55% of these plans are held by public sector employees.
• The average Canadian pension is $25,000 a year.
• The market meltdown of 2008 left an estimated $50-billion deficit in Canada’s corporate pension funds.
• In 1977 about 46% of Canadians were enrolled in an employment pension plans, but by 1997 the proportion had dropped to 38%. It continues to decline.
• In 2008 only 31% of eligible taxpayers made use of the RRSP program, and only a small percentage of them made the full allowable contribution of 18% of annual income.
• 40 percent of Canada’s work force will retire within the next 20 years.
The Globe and Mail
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- Canadians are facing a national pension meltdown.
- Decades in the making, it has worsened dramatically
- during the recession.
- -- Jacquie McNish (journalist with the Globe and Mail)