Canadian pension system ranks fifth in world
The Canadian pension system comes in at fifth place in the second Melbourne Mercer Global Pension Index, produced by Mercer for the Australian Centre for Financial Studies.
Canada ranks under the Netherlands, Switzerland, Sweden and Australia with a B-grade classification and score of 69.9. Not one of the 14 countries in the index received an A grading.
To get a higher ranking Canada's pension system needs to increase the coverage of employees in occupational pension plans, insure that voluntary retirement savings are preserved for retirement purposes, move the age of government pension to 65 and increase the level of household savings.
Mercer Partner, Scott Clausen, said in a press release that "Public policy makers should continue their focus on increasing pension plan coverage for middle income employees in the private sector."
As the population ages raising the age at which an individual is eligible for retirement is a key factor when it comes to pension plans.
"Not surprisingly, the GFC has threatened the sustainability of public and private pension systems in several countries through the decline in asset values and an increase in government debt. This was reflected most acutely in the scores for Canada, the United Kingdom and the United States, said Dr David Knox, a Senior Partner in Mercer's Retirement, Risk and Finance business, who oversaw the study.
"Increased life expectancy is a theme that is common to all of the countries in the index. As the gap between pension age and life expectancy widens, pressure on public pension systems will increase. This highlights the need for governments to continue to review their state pension or retirement age and focus on increasing the adequacy of the private system."