Pension system and financial security | Aging and retirement of immigrants Pension system and financial security | Aging and retirement of immigrants
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Pension
Survey of Financial Security: Private pension savings
http://www.statcan.ca/Daily/English/011214/d011214a.htm
Maintaining standard of living in retirement: Survey of which family units might not have saved enough to replace a certain percentage of their earnings in retirement or to generate an income that is likely to be above the level of the before-tax low-income cutoffs (LICO). Statistics CanadaAssets, Debts And Net Worth of Canadian Households
http://www.vifamily.ca/library/wealth/wealth.pdf
Relative to a high school graduate: a household with a master’s degree had almost 3 times more net worth a household with doctorates or advanced medical degrees had over 4 times more net worth. For the older age group (55-64), those that are foreign-born have a higher net worth than are those who are Canadian-born. The opposite is true for the younger age group (45-54). - Year 1999: Households in which the major income recipient was born outside of Canada had a median net worth of $134,000 or 27% more than was the case for those that were Canadian-born… The net worth of the foreign-born aged under 45 was lower than for Canadian-born households. This provides further evidence that more recent immigrants are not doing as well as earlier immigrants… From a longer-term perspective, the median net worth of immigrants who had been in Canada for less than 10 years saw their wealth shrink by one-quarter from 1984 to 1999, while those who had been in Canada for more than 20 years saw their net worth jump by over 40%… In 1999, the poorest 10% of households as a group had negative net worth which means that they actually owed more than they owned. Those need at least $120,000 to retire. The Vanier Institute of the FamilyTraditional grocers in danger of being stuck in the middle
http://thechronicleherald.ca/Business/463463.html
In another 10 years, almost one-third of all Canadians will be 60 or older. Market research suggests that this group seeks quality, service and convenience, and can afford to pay up for it.Understanding the Impact of Population Ageing: How It Will Affect the Supply of Labour and Health Care Costs
http://www.conferenceboard.ca/canadaproject/research.htm
Performance & Potential 2003–2004: Defining the Canadian Advantage… The ageing of Canada’s population will result in labour shortages and increased health care costs, particularly after the year 2010 as the baby boomers reach retirement age. While Canada should be able to count on high levels of immigration to offset the slowing rate of labour force growth, there will be fierce international competition for talent… The ageing of the population will also add a substantial 0.8 per cent each year to health care costs, with no offsetting increase in income or wealth. In light of the challenge Canada faces in meeting its many spreading priorities, we must consider restructuring the financing of the delivery of health care. Report, October 2003Aging Amongst Immigrant in Canada: Policy and Planning Implications
http://www.ccsd.ca/cswp/2005/durst.pdf
Almost 19% of the immigrant population in Canada is over 65 and this number is much higher than the national average of 12.2%. And almost 31% of the immigrants from Europe are over 65 years of age. The European immigrants are an aging population. The senior population from Eastern Asia (mostly Hong Kong, China, Taiwan) is 13% of total immigrants from this region. Caribbean immigrants are also older than other immigrant groups and near the national average at 11.7%. The assumption that “immigrants” are young is not supported. Canada has larger numbers of immigrants from diverse backgrounds and the senior population is mirroring the Canadian mosaic. By percentage, the youngest group is from Central and South American (6.7%)... To achieve independent living, immigrant seniors many need economic security and access to support services. They may need services that are culturally appropriate. Overall, the ethno-cultural seniors need to be recognized and valued for their diversity. They need to have more decision making powers regarding policies, economics, health and social issues that affect them, and to have better knowledge about the services and programs that are available. Our diverse multicultural nation is facing new challenges with our aging population, making Canada an exciting place to live.The Ethnic Dimension of Aging in Canada
Ujimoto, K. Victor (1987) in Aging in Canada: Social Perspectives. 2nd Edition.
Richmond Hill, ON: Fitzhenry & Whiteside. pp. 111- 137.Pension coverage and retirement savings of young and prime-aged workers in Canada, 1986-1997
http://www.statcan.ca/english/research/75F0002MIE/75F0002MIE2000009.pdf
We used survey data and tax data to document trends in pension coverage among men and women of different age groups. Both data sources produce consistent results : they show that, between 1986 and 1997, pension coverage has fallen among men and young women but has risen among prime-aged women… A priori, one should keep in mind that decreases in RPP benefits do not necessarily imply that workers are worse off. There may be a certain degree of substitution between direct and indirect payroll benefits. Also, even though pension coverage of young women fell between 1986 and 1997, the real annual earnings of young female full year full-time workers rose by 5% during the period. However, decreases in RPP benefits of young men and prime-aged men suggest that they are worse off since - abstracting from the potential effect of group RRSPs - the decline in their RPP coverage observed between 1986 and 1997 took place in a period where their real earnings did not increase.Seniors on the margins: Aging in poverty in Canada
http://www.naca-ccnta.ca/margins/poverty/poverty5_e.htm
Close to one half of 45-59 year old immigrants who arrived in Canada after 1980 report that they feel ill-prepared for retirement and 47% of those have no idea when they will be able to retire, or do not intend to retire at all… One third of recent retirees have said that they would have continued to work, at least part-time, and 12% said that they would not have left their job had it not been for compulsory retirement policies…Chinese Immigrant Women Who Care for Aging Parents
http://ceris.metropolis.net/virtual%20library/community/hon_mcdnld1/hon_mcdonald1.html
Our findings indicated that the care-giving experience of women in three generational households can be a burden only when the care recipients are frail, and ill. Otherwise, the care-giving and receiving experience was not in one direction; rather it was reciprocal, this is especially so when the elderly parents were healthy and able. This reciprocal characteristic reflects the cultural traditions in the Chinese family system.
Seniors on the margins: Seniors from ethnocultural minorities
http://www.naca-ccnta.ca/margins/ethnocultural/ethno2_e.htm
Immigrant seniors, especially women, face higher rates of poverty than seniors born in Canada….
The prospect for retirement is much more uncertain for immigrant adults than it is for their non-immigrant counterparts. Close to one-half of non-retired immigrants aged 45-59 do not know if or when they will retire…One-half also expressed concerns about the adequacy of their financial preparations for retirement. In comparison, only one-third of non-immigrant pre-retirees do not plan or do not know when they plan to retire and feel that they have not been able to make adequate financial preparations for retirement…The economic situation of recently-arrived older immigrants is even less secure. The older the age at immigration, the more likely one will live in poverty. For those who arrived later in life, accessing sources of income is particularly challenging. With little or no work history in Canada (necessary to qualify for Canada/Quebec Pension Plans) and a 10-year residency requirement to qualify for the Old Age Security benefit, many immigrant seniors are unlikely to be able to access public pensions. And even after 10 years, they are only eligible for partial benefits and do not qualify for full benefits until they have lived in Canada for 40 years. National Advisory Council on AgingCanadian pension policy - Reciprocal agreements
http://www.rediff.com/news/1999/sep/10us3.htm
Former Union Leader Challenges Canadian Pension PolicyRetirement planning for small business owners
http://www.cibc.com/ca/small-business/newsletter/win05-index.html
According to the 2004 CIBC Small Business Outlook Poll, conducted by Decima Research, small business owners plan to draw from multiple sources to fund their retirement. Selling their business accounted for nearly one-third (31%) of their planned income, with 28% expected to come from RRSPs, 25% from other investments, and 16% from pensions… Government and other pension plan payments are only a starting point…A Gender Analysis of Pensions and Social Investment
http://www.pensionsatwork.ca/english/project_pages/project_10.php
In Canada, women, particularly immigrant women, have less formal pension coverage than native-born women…Pensions: Immigrants and visible minorities
The Economic Status of Elderly Canadian Immigrants
http://www.statcan.ca/english/studies/75-001/archive/2002/2002-06-02.pdf
Cohorts of immigrants who arrived in Canada more than 30 years ago have better pension coverage than cohorts who arrived more recently….In 1998, only 30% of women who had arrived in Canada during the previous 10 years had a pension plan, compared with 52% of those who had been in Canada for more than 30 years. Among men, the comparable percentages were 46% and 63%…. Pension coverage of visible-minority immigrant men tended to be lower…
http://pcerii.metropolis.net/events/events_content/Winnipeg/Hugh%20Grant.htm
Immigrants typically arrive with little personal wealth, earn less income over the duration of their working lives in Canada and, as a result, experience lower incomes after the age of normal retirement. Accordingly, any policy dealing with income maintenance and employment rights of the elderly must consider the "intersection" between age and immigration status.Ageing population and immigration in Canada - International Social Security Association
http://www.issa.int/pdf/anvers03/topic6/2fougere.pdf
Expected future immigration flows would contribute to reduce the negative impact of ageing on real per capita GDP by roughly 30%.…Raising the number of immigrants would provide some additional long-run benefits in terms of real GDP gains. For example, achieving an immigration target of 1% of the population rather than 0.75% could prevent an additional 10% decline in real GDP per-capita in the long run… Canada’s immigration would significantly reduce potential intergenerational inequity effects associated to ageing as future generations would be better-off compared to a scenario with no immigration.…If current immigration trends persist in the long run, Ontario and British Columbia could obtain most of the socio-economic benefits of immigration, which would in turn contribute to raise regional disparity. On the other hand, regional wage growth differentials would also arise at the advantage of the other provinces. This would in turn provide incentives to regional labour mobility from Ontario to the rest of Canada.Retirement planning for small business owners
http://www.cibc.com/ca/small-business/newsletter/win05-index.html
Pension crisis expected to linger for some time... According to preliminary survey findings by the Conference Board of Canada, the percentage of Canadian CFO's who believe that the pension underfunding crisis will persist has more than doubled since last year. Meanwhile, although solvency levels are moving in the right direction, the improvement is largely due to the extra contributions that many plan sponsors have been making toward their pension deficits, while the beneficial impact on solvency levels by virtue of investment gains made in 2004 is being offset or wiped out altogether by lower bond yields and new pension actuarial standards recently introduced. Source: Conference Board of CanadaCanada faces severe labour shortage, strain on pension system, by 2030
http://www.goanvoice.ca/2004/issue3/newslinecanada.htm
Watson Wyatt Canada comments on international pension readiness report: Canada faces a severe labour shortage by 2030 that will place significant strain on the country's public and private pension system... The report shows that activity rates in Canada fall short of rates in the top-five OECD countries for every age and gender group -- most noticeably among older age groups (55+). If Canada were to adopt measures to increase labour-force participation of older age groups to rates similar to those of the top-five OECD nations, it could significantly reduce its old age dependency rates.
Age Discrimination and the Employment Rights of Elderly Canadian Immigrants
http://www.lcc.gc.ca/pdf/grant.pdf
Since many immigrants arrive relatively late in their working life and with little personal wealth, denying them the right to employment may inadvertently create an undue economic hardship by limiting their capacity to accumulate sufficient savings for retirement… With the exception of five percent of individuals who placed their savings at over C$100,000 upon their arrival in Canada, all reported very modest accumulated wealth. Indeed, over one half stated that they had savings of less than $1,000 (1996 Census data).Pensions in Canada: Policy Reform Because Women Matter
http://www.city.vancouver.bc.ca/ctyclerk/cclerk/20050614/documents/I-complete.pdf
Immigrant women need to live in Canada for ten years before they can collect 25% of Old Age Pension. They must reside in Canada for 40 years before they can collect full OAP at age 65. This applies even if they have become Canadian citizens and contravenes the Charter of Rights and Freedoms. Without direct intervention by enlightened policy makers, senior women will continue to be one of the poorest socio-economic groups in Canada for the foreseeable future.Workers' knowledge of retirement plans (2001)
http://www.statcan.ca/Daily/English/040123/d040123b.htm
Accurate information about one's employer-sponsored retirement plan is crucial given that group RRSPs, contrary to many RPPs, require workers to decide whether to participate and, if so, how much to contribute… The poorer knowledge of retirement plans among recent immigrants can be explained only partially by their lower seniority, and their under-representation in large establishments and in unionized jobs, where the incidence of misinformation appears to be minimal. Even after controlling for these factors, at least 70% of the difference between recent immigrants and Canadian-born workers remains… At the end of 2001, about 5.5 million employees, representing 40% of all employees, including those in the public sector, had an RPP in their job. This was down from 45% a decade earlier. The DailyAwakening to the Intergenerational Crisis: A Content Analysis of Media Pension Coverage in Canada 1993-1998
http://www.canpopsoc.org/conferences/2000_abstracts.html
With declining fertility rates and increasing life expectancy, Canada, like many industrialized countries, is facing an aging population. Specifically, the growth in elderly dependents is a significant concern for countries with pay-as-you-go public pension systems (where income from today's workers is recycled to current seniors). This is especially a concern in North America that experienced a prolonged post-WWII fertility boom followed by below-replacement level fertility rates. When this bulge of boomers attain retirement age (in the 2010s and 2020s) public pensions plans are predicted to run dry in Canada as the pension system attempts to accommodate the demographic bulge of the boomers… Conflict over the issue of intergenerational equity (referring to equality in treatment and opportunities for different generations) was noticed in the US media over the 1980s and early 1990s but in Canada attention to this issue was virtually nil. This research analyzes public discussion of the intergenerational equity issue from 1993 to 1998. Abstract.Is $1 million enough money to retire?
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/
Layout/Article_PrintFriendly&c=Article&cid=1139482933378&call_pageid=968332188492
What readers had to say: Ten years ago one could possibly retire and live off $1 million quite comfortably. Today that reality is only a myth. With the price of real estate, soaring taxes, and endless bills, I do not think that $1 million will last forever...
It would depend on how long the money is expected to last, how it’s invested, lifestyle expectations, the person’s current financial status, and so forth. One thing is certain though: If the money is expected to last for any significant length of time, the retirement lifestyle would be far from extravagant...
I find this question to be insulting to the 70 per cent of women seniors who live below the poverty line. Is $1 million enough? Try living on the $13,000/year basic government pension on which these women barely survive... Toronto Star, February 10, 2006Planning retirement income can be risky
http://thechronicleherald.ca/Business/489777.html
Envision the lifestyle you can reasonably expect, and consider all the basic expenses, such as food, clothing and shelter, as well as all discretionary expenses such as travel, dining out, hobbies and other indulgences…. There will be a growing list of medical services that the government may deem not medically necessary, but which an individual may find essential for a full quality of life. Retirees could find themselves taking on more financial responsibility for their own health care… The Chronicle Herald, March 13, 2006Canadian Retirement Income Calculator
https://srv260.hrdc-drhc.gc.ca/English-App/INT_01.asp
The calculator takes you step by step through an estimate of the ongoing income you may receive throughout your retirement from:
Old Age Security (OAS); Canada Pension Plan (CPP) or Quebec Pension Plan (QPP); employer pension(s); Registered Retirement Savings Plans (RRSPs); and other sources of ongoing income.
The Old Age Security program and the Canada Pension Plan (or Quebec Pension Plan) provide a modest secure base on which to build your private savings. The calculator helps you assess your personal financial situation and helps you decide which steps to take to reach your retirement goals.Challenges of an Aging Canadian Society - Financial Security in Retirement
http://dsp-psd.pwgsc.gc.ca/Collection/H88-3-28-1999E.pdf
Issues - Seniors have four possible sources of income: government transfer payments, private retirement plans, employment earnings and the wealth they have accumulated in their lifetime... .Challenges - Immediately improve the economic situation of future seniors by combating the known causes of poverty and of financial dependence during retirement, namely, the polarization of the labour market, the professional ghettoization of women and unequal access to employment, and wage disparities between men and women for comparable work.New Frontiers of Research on Retirement
http://www.statcan.ca/Daily/English/060327/d060327b.htm
Maintaining a standard of living in retirement is also becoming an issue. Amid growing uncertainty about their future financial security, an increasing number of people do not know when they will retire. Others have simply delayed their retirement… Two particularly vulnerable groups are immigrants and women living alone. Employment was the major source of income for older immigrants from 1980 to 2002. This group has not benefited as much as the Canadian-born from the maturation of public and private pension systems. Workplace pension income for immigrants 65 and over was 21% lower than for the entire elderly population. The Daily.