Aging Population and Canadian Public Pension Plans

August 1, 1994

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Tamim Bayoumi. Aging Population and Canadian Public Pension Plans, (USA: International Monetary Fund, 1994) accessed December 30, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Canadian public pension plans are run on a "pay-as-you-go" basis. As the baby boom ages, contribution rates for the two main plans are projected to rise significantly, from their current level of around 5 percent of eligible earnings to over 13 percent by 2030. An alternative is to set contribution rates at their underlying long-term levels. Such a policy would imply a significant rise in current contribution rates, to 10-10½ percent of eligible earnings, but would allow the system to cope with the retirement of the baby boom generation without recourse to borrowing or significant increases in contribution rates.

Subject: Aging, Expenditure, Health, Labor, Pension spending, Pensions, Population and demographics, Wages

Keywords: Aging, Benefit, Benefit rate, Contribution rate, Cost, CPP benefit, CPP pension, Earnings, Pay-as-you-go rate, Pension spending, Pensions, Rate, Scheme cost, Wages, WP

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1994/089
Stock No:

WPIEA0891994
ISBN:

9781451851236
ISSN:

1018-5941

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