Retirement Security is rare

Enhance OAS Benefits

About six million seniors, the vast majority of older Canadians, receive OAS benefits.

As a flat-rate benefit that isn’t geared to income or earnings, OAS matters most to low-income seniors who have not been able to save for retirement during their working lives. Women are often most impacted.

However, the OAS benefit is indexed to inflation rather than the average wage. Over time, the relative value of the OAS benefit is eroding relative to the incomes of Canadian workers. This means seniors have less and less money to support themselves.

The OAS benefit rate should be indexed at a rate equal to the rate of growth in prices, plus a portion or all of the increase in real wages.

Reform the GIS

The GIS helps alleviate poverty among low-income seniors. One third of seniors, about two million Canadians, receive the GIS benefit. Single seniors, elderly women, Indigenous people and newcomers to Canada especially rely on GIS benefits.

Historically, the GIS benefit has been excessively reduced if a senior has other income. It is reduced by 50 cents for every dollar in CPP income, private pension and Registered Retirement Savings Plan (RRSP) income, and earnings above a certain threshold. In addition, the GIS top-up, targeted at seniors with very low income, is also clawed back, adding up to a reduction of 75% or more for GIS benefits.

Canada must cease the reduction to the GIS benefit, especially on CPP income. It makes no sense to expand the CPP benefit as governments did in 2016, and then deny seniors this much-needed additional income by reducing their GIS.

Protecting pensions when companies go bankrupt

Nortel, Sears and Stelco – these companies all have one thing in common.

When they entered restructuring or went bankrupt, it was their workers who paid the highest price with job losses and cuts to pensions and other benefits.

These cases are among the reasons why Canadians are increasingly worried about the risks to their workplace pension plans and their ability to retire with security and dignity.

Canada’s current bankruptcy laws give priority to investors, banks and parent companies over workers’ pensions and benefits. Time and time again, proceedings under those laws have resulted in the interests of workers being overshadowed by the interests of rich investors and banks.

Canada must change these unfair laws and protect pensions by:

1. Changing bankruptcy laws so that workers and retirees have super-priority status and are first in line, not last, when it comes to paying creditors;
2. Working with the provinces and territories to create a mandatory, industry-financed pension insurance program to backstop benefits and rescue stranded pension plans; and
3. Enacting strict legislation and stronger powers for pension regulators to ensure that corporate executives can’t sell off assets and squeeze money out of companies to pay themselves first, leaving workers and pensioners holding the bill.

Securing defined benefit pensions

Defined benefit pensions provide a predictable, set income in retirement, often indexed fully or partially against inflation.

Canada’s unions have worked hard to negotiate defined benefit pensions for many of our members, because they deliver the highest degree of security and predictability in retirement.

Employers sponsoring defined benefit pension plans are legally required to fund them so they are there for workers when they retire. With a defined benefit pension, workers can budget for their retirement.

With the rise of precarity and insecurity in the economy, defined benefit pension plans provide the requirements to build pension savings that maximize the benefits and protections workers need when they retire.

The government must preserve defined benefit pension plans and enact policies and incentives to increase access.