OTTAWA – A new study says automatically raising workplace pension contributions in tandem with the cost of living is unnecessary because Canadian retirees increasingly tighten their purse strings after they reach 70 years old.
The report by the C.D. Howe Institute think tank also argues that tying up the extra funds in pension contributions is an inefficient use of scarce financial resources for Canadians.
The research says lowering pension contributions for company plans – such as defined-benefit vehicles – would put more money in the pockets of families that are raising kids and paying down mortgages.
READ MORE: Ontario finance minister pushes for quick CPP reform deal; Quebec, not so much
The study is released a few days before federal Finance Minister Bill Morneau is scheduled to meet his provincial and territorial counterparts to continue quickly evolving discussions on how to boost the Canada Pension Plan.
The federal Liberals have pledged to work with the provinces and territories to enhance CPP. They argue that expanding CPP across the country will ensure more Canadians have a secure retirement.
The C.D. Howe paper’s recommendations are mainly targeted at private pension plans – not the CPP.
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