Change Text Size
|
|
|
|
|
|
|
klaus
User
/ Moderator
Jan 31, 2012, 9:22 AM
Post #1 of 1
(60003 views)
Shortcut
|
|
Old Age Security schemes now forced to change
|
Can't Post
Private Reply
|
|
It looks as though the Conservative government of Prime Minister Stephen Harper read my column in these pages last July and decided to act on it. The government’s recent announcement that Canada’s Old Age Security program (OAS) is to be reformed didn’t come a moment too soon, as the system has been unsustainable now for many years. It’s one of the reasons that the Eurozone is on the precipice of a bottomless debt pit and it will surely sink the economies on both sides of the Canada/U.S. border, unless action is taken now.
In the U.S. politicians from both parties have been dancing around the notion of “entitlement reform” for the past three presidencies, but neither party has the stomach to do what’s necessary, lest ungrateful voters spank them in the next election. In Canada, it seems we now have an opportunity to reform the OAS system, so that those now working will be able to face retirement without having to live on dog food.
Of course, the Prime Minister’s announcement resulted in all the usual suspects coming out from beneath their rocks to presage the end of the world. Liberal Leader Bob Rae was among the first to condemn the Prime Minister’s announcement, claiming that the move showed Harper to be engaged in the “politics of deceit and abandonment.” Liberal pension critic Judy Sgro claimed that reforming the system would result in Canada’s seniors having to make use of soup kitchens and food banks. Canada’s official opposition, the NDP, also fed the flames of hysteria by claiming that this represented nothing less than the revelation of Harper’s much ballyhooed “hidden agenda.”
But if one looks at Canada’s OAS program (or the American Social Security scheme, for that matter) objectively, it doesn’t take a mathematical genius to understand that we’re looking at imminent collapse. It should be noted that when government pension plans first came to the fore, the lifespan of the average citizen was somewhere on the order of 65. As such, pegging the retirement age at 65 made sense, because the government did not expect to be paying out pension benefits to retirees for more than a few years at most. Nor did anyone have an inkling back then that some day the number of older people would outnumber the young. Given that the average life span is now nearing 80, there just isn’t enough money available to pay retirees from age 65 until whenever.
Prime Minister Harper plans for his government to increase the retirement age to 67, which in my opinion may not be enough to make the system truly sustainable, but it’s a good start. The Prime Minister was very clear that these plans would not affect current or soon to be retired persons and would affect younger baby boomers who now have a greater incentive to plan for their old age. That’s one of the things that opposition politicians did not mention in their blanket condemnation of Harper’s plans, which is unfortunate as it could cause individuals who are close to retirement age to needlessly lose a lot of sleep.
And while reforming the OAS system in Canada is a really good beginning, what is also needed is for government workers’ pensions to be reformed so that people retiring at age 50 don’t wind up collecting a public pension for more years than they have actually worked.
Klaus Rohrich is President and Creative Director of Taylor/Rohrich Associates Inc., a marketing and advertising firm that specializes in niche marketing retirement real estate developments
http://www.maturitymarketing.com.
|
|
|
Welcome to RetirementHomes.com. Our goal is to help you and/or your loved ones find the perfect retirement community that meets your specific needs and allows you to enjoy your retirement.
MAIN
SEARCH
WHO'S 
LOG 