A Fraser Institute study that claims CPP expansion could reduce voluntary savings is flawed, says CUPE national president Paul Moist.
He adds that encouraging Canadians to rely heavily on voluntary savings for retirement is “a fools’ errand that will only deepen this country’s pension crisis.”
Read: CPP enhancement, ORPP could reduce voluntary savings: Report
While individual savings are an integral part of Canada’s pension system, Moist says relying heavily on RRSPs for retirement income is a risky strategy because they’re insecure, the investments are subject to high management fees, and are often funded without any employer contributions.
“These factors leave retirement savings at risk of being wiped out by financial market instability, and pose the very real threat of people out living their savings,” he says.
Moist says people aren’t contributing to RRSPs, citing data from Statistics Canada.
In 2013, 23% of Canadians filing taxes reported making contributions and they have almost $900 billion dollars in unused room to contribute.
“By expanding CPP benefits with modest, affordable phased-in increases to the contributions made by workers and employers, we can ensure millions of Canadians have a secure, reliable pension, indexed for inflation for their entire retirements.”
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