Thinking about retiring when you’re 65? Think again. If you do, don’t count on your old-age security – Prime Minister Stephen Harper plans to delay eligibility by two years.
Harper’s announcement that his government plans to raise the eligibility age to collect old-age security (OAS) to 67 from the current 65 was part of a speech he gave Thursday at the World Economic Forum in Davos, Switzerland.
While Harper did not specifically single out the old-age pension plan, which is taxpayer funded, he made it clear that his government does not plan to change the Canada Pension Plan (CPP), which is funded by employees and employers.
Harper said the changes are needed as part of a systemic fix to meet changing economic realities and an aging population. Harper characterized Canada’s aging population as a threat to the country’s economic health.
He said Canada has already taken steps to ensure stable funding for the country’s national health-care system and needs to do the same for its retirement income system.
“The Canada Pension Plan is fully funded, actuarily sound and does not need to be changed,” Harper said in his speech. “For those elements of the system that are not funded, we will make the changes necessary to ensure sustainability for the next generation, while not affecting current recipients.”
All Canadians receive OAS when they reach 65 and do not have to retire to receive the benefits. Employment history is not a factor in determining eligibility.
Only Canadians who have paid into the Canada Pension Plan receive those benefits. Both employees and employers pay into the CPP.
Government isn’t the only sector worried about funding pensions. As Business in Vancouver reported in a recent Full Disclosure series, some of B.C.’s largest companies are worried about their liabilities when it comes to defined contribution plans. (See “Corporate pension pain rising” – issue 1153; November 29-December 5, 2011, and “Old, In the Way, Broke and Belligerent” – issue 1161; January 24-30, 2012.)
Nelson Bennett
@nbennett_biv