Lower Risk, Higher Reward: Renewing Canada's Retirement Income System

Produced by the Mowat Centre at the School of Public Policy and Governance, University of Toronto.Historically, Canada’s retirement income system (RIS) has done a fairly good job of ensuring that seniors have sufficient sources of savings and income in order to avoid poverty and enjoy a standard of living comparable to that during their working lives. However, in recent years, a number of new stresses have emerged: a decline in the coverage and quality of workplace pension plans, a prolonged period of low-interest rates and rising life expectancy. Taken together, these phenomena have exposed Canadian savers to significant new risks in managing and preparing for their retirement. Over the next two decades, it is projected that between one-third and one-half of middle-income workers over the age of 40 today are at risk of diminished prospects as they move into retirement. This drop in consumption possibilities represents an important socio-economic challenge for Canada as we enter a period of significant population ageing. This report examines how well the retirement income system is serving Canadians, and how it can be improved