Like most western countries, the level of pension savings in Canada is a major issue for the Canadian government. Increasing longevity is driving concerns about how Canada can manage to provide for its senior citizens in the future, as they live longer and therefore require greater amounts of money to sustain themselves in their retirement. Canada instigated a three-pillar approach to pension provision, which consists of a basic non-contributory pillar, a second pillar of statutory contributions and a third voluntary pillar.
Given the dramatic increases in longevity to date and the fact that these increases are forecast to continue, Canada needs to look at the options it has to ensure that an ever increasing section of the population does not sink into pensioner poverty. According to HSBCs current advertising campaign, two-thirds of the people who have ever reached 65 are alive today.
In other countries, a heated debate is taking place on how to cope with this issue. In Australia, they have already made superannuation contributions compulsory, with employers contributing twelve per cent of each employee’s salary into a superannuation fund to be drawn on in retirement. They are already considering increasing this amount to ensure greater pension pots.