This paper seeks to contribute to a forward-looking debate on possible reform options for the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP). Even though it focuses on the CPP, most of its analysis applies to the QPP as well since the two programs are largely identical. This paper does not provide a broad survey of all possible reform options, but rather analyzes one vital option that has received insufficient attention in previous debates: raising the normal retirement age from 65 to 67 years. A discussion of this option is warranted not only because it could prevent future financing problems in Canada’s public pension insurance programs, but also because it could improve fairness across generations. The significant increase in life expectancy raises the question of whether the current retirement ages of 60 years, for earliest CPP and QPP benefits, and 65 years, for full benefits, are too low. Should future generations pay for the longevity increases of the current generation of workers, or should current workers share the costs by retiring at a later age? We conclude that raising the normal age from 65 to 67 years—and the earliest age from 60 to 62 years—is a financially effective, intergenerationally fair, and politically acceptable option for improving the CPP and for addressing the QPP’s problems. We suggest that the option of raising the retirement age needs to be discussed well before longevity increases or funding problems occur and that a broad consultation with stakeholders and citizens would be an essential part of a debate on raising the retirement age in Canada.
We use an unusually rich Canadian survey to examine how post-job-loss behaviour and outcomes vary with age of the job loser. We find that older job losers experience greater postdisplacement joblessness, and are less likely to return quickly to satisfactory employment. We show that this apparent age effect is not a job tenure effect or wealth effect. We also find that older job losers, compared to mid-career job losers, are as likely to report searching for work, but that they search less intensely (reporting fewer hours of search, and lower out of pocket expenditures on search). They are also less likely to retrain, less likely to undertake a geographic move, and less likely to switch occupations. Thus, the data suggest older job losers are less likely to make career investments after job loss. This may be a rational response to a shorter time horizon, or to more limited labour market opportunities.
Two forces are about to create a growing market for Individual Annuities in the U. S. and Canada. First, the Post War Baby Boom (born 1946 to 1964) is inexorably moving into retirement. Second, there is a strong move away from Employer-sponsored Defined Benefit pension plans to Defined Contribution pension plans. This trend could even extend (in the U.S.) into the provision of Social Security benefits.
Under these arrangements, participants must find a way to mitigate their “longevity” risk (and the investment risk, although this is not the topic of this paper). The most obvious answer is to buy a life annuity. However, at this time in the U. S. and Canada, persons who voluntarily apply to buy a life annuity are generally assumed to be in extremely good health and annuity rates are determined using very low mortality assumptions (high life expectancy assumptions). While there is a growing market in “Enhanced/Impaired Annuities”, especially in the U.K., the present pricing structure for annuities in the U. S. and Canada means that a large proportion of the population cannot get a “fair value” annuity given their less-than-preferred health profile.
This paper looks at reasons for this market reality in the U. S. and Canada. It also reviews the underwriting and marketing of life annuities in the United Kingdom where “enhanced” life annuities are available for a broader cross-section of the marketplace.
This paper discusses a series of selection points in the design and financing of social security retirement systems. For each criterion, the paper lists and discusses advantages and disadvantages of the options available.
The selection points include:
It is the sincere hope of the author that this discussion will create even more debate of the issues surrounding these important selection criteria which, in turn, will result in better social security retirement systems for all.
Today, both the United States and Canada are experiencing a decline in Single-Employer Sponsored Defined Benefit (DB) Pension plans. In some instances, they are being replaced by Defined Contribution (DC) or Individual Account [e.g., 401(k)] plans; in other cases, by nothing. It appears that traditional sponsors of DB plans have concluded that their cost (or its variability) is larger than the rewards (e.g., a loyal work force). At the same time, two stock market meltdowns in less than a decade have indicated to all the frailties of Individual
Account DC systems. What we need is a new pension system that brings most of the advantages of the DB and DC plans to the participants, while minimizing their disadvantages. We must also recognize the skill set of the participants (e.g., do not expect a blue collar worker to be an investment professional) and not anticipate or require anomalous markets (e.g., ever-stronger equity returns).
Size matters. Larger plans can run at lower per unit expense ratios, and can also achieve entry into a wide variety of investment products (e.g., private placements) not available to a small plan. Larger funds also benefit from risk sharing through “Law of Large Numbers”. The model proposed is a “Jointly Governed Target Benefit Pension plan”. Such plans would have many features in common with today’s Ontario Multi-Employer Pension Plans (MEPPs), the Canada/Quebec Pension Plans (C/QPP), TIAA-CREF in the United States and the Dutch national plan. For the plan sponsor, this is a DC plan. Inherent in the concept are that smaller plans (and even individual plans) could commingle their assets to achieve “size” (e.g. a minimum investment portfolio of $10B). Investment management would be at arm’s length from the plan itself.
This paper has been written for the special issue of the Canadian Journal on Aging on the retrospective on the Butterworths series of monographs in social gerontology. The paper brings up-to-date materials published in 1991 in the volume entitled: Economic Security in an Aging Population.
The topics covered are those of the individual chapters of the 1991 publication, namely:
Evidence of the association between wages and body size –typically measured by the body mass index– appears to be sensitive to estimation methods and samples, and varies across gender and ethnic groups. One factor that may contribute to this sensitivity is the non-linearity of the relationship. This paper analyzes data from the European Community Household Panel survey and uses semi-parametric techniques to avoid functional form assumptions and assess the relevance of standard models. If a linear model for women and a quadratic model for men fit the data relatively well, they are not entirely satisfactory and are statistically rejected in favour of semiparametric models which identify patterns that none of the parametric specifications capture. Furthermore, when we use height and weight in the models directly, rather than equating body size with the body mass index, the semi-parametric models reveal a more complex picture with height having additional effects on wages. We interpret our results as consistent with the existence of a wage premium for physical attractiveness rather than a penalty for unhealthy weight.
The purpose of this research paper is to contribute to knowledge regarding employer pension plan (EPP) inequality in Canada. Information on EPP coverage and value is analyzed using the 1999 and 2005 Surveys of Financial Security. The results indicate that women, persons who may live alone, landed immigrants, and language minorities are at a disadvantage in their EPP coverage and accrued value. In addition, age, educational attainment, occupation, industry of employment, union membership, total personal income, province, and size of urban residence figure importantly in EPP coverage. Furthermore, age, educational attainment, industry of employment, total personal income, province and size of urban residence are all important determinants of the termination value of EPPs. To identify inequalities in EPP coverage among the sub-populations, the researchers use multivariate analysis. This allows an identification of inequalities that are not a direct result of differences in age, gender, level of education, location, or position in the labour market. Findings indicate that differences in EPP coverage for women, persons who may live alone, landed immigrants and language minorities are primarily due to differences in these other characteristics. However, the lower EPP value witnessed by these sub-populations cannot be explained by individual or labour market characteristics.
While some retirement is welcomed and on-time, other retirements are involuntary or forced due to the loss of a job, an early retirement incentive, a health problem, mandatory retirement, lack of control with too many job strains, or to provide care to a family member. An analysis of the 2002 Canadian General Social Survey reveals that 27% of retirees retired involuntarily. This research focuses on the disabled population in Canada and considers factors that influence voluntary and involuntary retirement. Further, consideration is given to the economic consequences of retiring involuntarily. This research will examine issues surrounding retirement and disability through statistical analysis of the Canadian Participation and Activity Limitations Survey (PALS) 2006 data. Methods include the use of descriptive statistics and logistic regression analysis to determine the characteristics associated with involuntary retirement. This study found that those who retired involuntarily were more likely to have the following socio-demographic and socioeconomic characteristics: age 55 or less, less than high-school education, live in Quebec, rent their home, and have relatively low income. They were also more likely to be worse off financially after retirement and to be receiving social assistance or a disability benefit. In terms of disability, the likelihood of retiring involuntarily was greater for those with poor health at retirement, the age of onset was over 55, higher level of severity, and multiple types of disability. For the discussion, a social inequalities framework is used, where health selection into involuntary retirement depends on social location defined by age and education. Policy initiatives that reduce the effects of disability, and allow individuals to remain in or return to the labour force such as workplace accommodations are discussed.
Previous findings on older adults’ awareness of community support services (CSSs) have been inconsistent and marred by acquiescence or over-claiming bias. To address this issue, this study used a series of 12 vignettes to describe common situations faced by older adults for which CSSs might be appropriate. In telephone interviews, 1,152 adults aged 50 years and over were read a series of vignettes and asked if they were able to identify a community organization or agency that they may turn to in that situation. They were also asked about their most important sources of information about CSSs. The findings show that, using a vignette methodology, awareness of CSSs is much lower than previously thought. The most important sources of information about CSSs included information and referral sources, the telephone book, doctors’ offices, and word of mouth.
The article examines where older adults seek help in caring for a parent with dementia and the factors associated with their identification of community health and support services as sources of assistance. The authors conducted telephone interviews, using random digit dialing, of 1,152 adults aged 50 and over in the city of Hamilton. Respondents received a vignette that raised issues related to parental dementia. In identifying support sources, over 37 per cent of respondents identified their physician, 33 per cent identified informal support such as family and neighbors, and 31 per cent identified home health services. Only 18 per cent identified community support services. Female participants having higher levels of education were more likely to identify their physician as a source of support. Knowing where to find information about community support services was associated with an increased likelihood of mentioning physicians and home health services as sources of assistance.
Using data from the 2005 Canadian Community Health Survey, the current study expands on previous research on the healthy immigrant effect (HIE) in adult populations by considering the effects of both immigrant and visible minority status on health for males and females in mid- (45- 64) and later life (65+). The findings indicate that the HIE applies to recent immigrant men in midlife; that is, new male immigrants – those who immigrated less than 10 years ago – have better health compared to their Canadian-born counterparts, and that the effect is particularly strong for visible minorities. The picture is similar for older women who have recently immigrated, however this advantage largely disappears when a number of socio-demographic, socio-economic, and lifestyle factors are controlled. For older men and middle-aged women of color, however, the reality is strikingly different: both groups report health disadvantages compared to their Canadian-born counterparts, with both recent and longer-term midlife women having poorer health. Findings are discussed in terms of their implications for health care policy for immigrant adults.
A substantial body of international research has shown that household expenditure on food and non-durables significantly decreases at the time of retirement -- a finding that is inconsistent with the standard life-cycle model of consumption if retirement is an anticipated event. This fall in expenditure has become known as the `retirement- consumption puzzle.' We analyze rich Australian panel data to assess the Australian evidence on the puzzle. We find strong evidence of a fall in expenditures on groceries, food consumed at home and outside meals with retirement. The observed decline in expenditure is explained by a subset of households experiencing an unanticipated wealth shock, such as a major health event or long-term job loss, at the time of retirement. This finding is corroborated by an analysis of alternative measures of household well-being, including indicators of financial hardship, and self-reported financial and life satisfaction. For the majority of households retirement is anticipated and there is no decline in economic welfare at retirement. However, for an important minority, retirement is `involuntary' and these households experience a marked decline across all indicators of economic well-being.
Canadians are living longer and retiring younger. When combined with the aging of the baby boom generation, that means that the “inactive” portion of the population is increasing and there are concerns about possibly large increases in the burden of support on those who are younger. We model the impact of continued future gains in life expectancy on the size of the population that receives public pension benefits. We pay special attention to possible increases in the age of eligibility and the pension contribution rate that would maintain the publicly financed component of the retirement income security system.
Canadians expect the same access to health care whether they are rich or poor, and wherever they live, often without direct charge at the point of service. However, we find that the private cost of long-term care differs greatly across the country, and within provinces, we find substantial variation, depending on income level, marital status, and, in Quebec alone, on assets owned. A non-married person with average income would pay more than twice as much in the Atlantic provinces as in Quebec, while a couple with one in care would pay almost four times as much in Newfoundland as in Alberta.
In this article we analyse the rates at which those admitted to hospital with acute myocardial infarction (AMI) receive aggressive treatment, assess how those rates have changed over time, and ask whether there is evidence of age discrepancies. Estimates made on the basis of data from an administrative database that includes discharges from all acute care hospitals in Ontario for selected years, from 1995 to 2005, indicate that there are strong and persistent age patterns in the application of medical technology. Results showed that to be true even after controlling for the higher rates of co-morbidities among older patients and variations across hospitals in practice patterns.
The Aboriginal population in Canada, much younger than the general population, has experienced a trend towards aging over the past decade. Using data from the 2001 Aboriginal Peoples Survey (APS) and the 2000/2001 Canadian Community Health Survey (CCHS), this article examines differences in health status and the determinants of health and health care use between the 55-and-older Aboriginal population and non-Aboriginal population. The results show that the older Aboriginal population is unhealthier than the non-Aboriginal population across all age groups; differences in health status, however, appear to converge as age increases. Among those aged 55 to 64, 7 per cent of the Aboriginal population report three or more chronic conditions compared with 2 per cent of the non-Aboriginal population. Yet, among those aged 75 and older, 51 per cent of the Aboriginal population report three or more chronic conditions in comparison with 23 per cent of the non-Aboriginal population.
Little comparative research exists on health experiences and conditions of minority groups in Canada and the United States, despite both countries having a racially diverse population with a signifi cant proportion of immigrants. This article explores race and immigrant disparities in health and health care access across the two countries. The study focus was on middle and old age given the change and increasing diversity in health and health care policy, such as Medicare. Logistic regression analysis of data from the 2002–2003 Joint Canada/United States Survey of Health shows that the joint effect of race and nativity on health outcomes – health differences between native and foreign-born Whites and non- Whites – is largely insignifi cant in Canada but considerable in the U.S. Non-White native and foreign-born Americans within both 45-to-64 and 65-and-over age groups experience signifi cant disadvantage in health status and access to care, irrespective of health insurance coverage, demographic, socio-economic, and lifestyle factors.
First Nation (Native Indian) people in Canada have higher incidences of every major disease than do the Canadian population, as well as higher infant mortality rates and lower life expectancy. Calls for a new approach to health service delivery for aboriginal people emphasize the importance of community based treatment and the incorporation of traditional medicines and healing approaches. However, there has been little empirical research on how widespread traditional health knowledge and practices are after decades of suppression and neglect. Neither is there much empirical information regarding the relation of traditional approaches to 'western' mainstream practices.
This paper presents findings from in-depth interviews with 52 Elders (over age 55) in the Tseshaht First Nation of British Columbia. The study was carried out with the permission and cooperation of the Tseshaht Band Council. Our data show that, despite being located near the medical facilities of a nearby city, support for and utilization of traditional medicines by Elders in the community remain widespread. Traditional medicines are generally not regarded by Elders as medications, but as means to link the individual holistically with the spirit and with nature. They are said to work because they engage the individual through faith in their capacity to cure holistically. Respondents reported little opposition from bio-medically trained medical practitioners, but suggested that traditional secrecy about such medicines hamper any efforts to link them directly with outside medical practices. Given the advantages of having aboriginal people involved in their own health care, coupled with the secrecy required by traditional practices, we recommend the parallel development of native healing programs integrated with mainstream medical treatment strategies as an appropriate approach to the health problems of Canada's First Nation communities.
In this paper, we use data from the confidential master files of the Canadian Census over the years 1991-2006 to study the geographic mobility of immigrant and non-immigrant physicians who are already resident in Canada. We consider both inter- and intra- provincial migration, with a particular focus on migration to and from rural areas of Canada. We exploit the fact that it is possible to link individuals within families in the Census files in order to investigate the impact on the migration decision of the characteristics of a married physician’s spouse. Our results indicate that the magnitude of outflows is substantial and that the retention of immigrant physicians in rural areas and in some provinces will continue to be difficult. We find strong evidence that migration is a family decision, and spousal characteristics (education, age, years in Canada for immigrants) are important. As well, we find that large Canadian cities (mainly in Ontario) are the likely destination for the types of immigrant physicians typically able to be recruited to other areas, implying recruitment efforts of smaller provinces may have significant implications for the size of health care costs in larger provinces.