Aging Population and Canadian Public Pension Plans

Tamim Bayoumi

No 1994/089, IMF Working Papers from International Monetary Fund

Abstract: Canadian public pension plans are run on a "pay-as-you-go" basis. As the baby boom ages, contribution rates for the two main plans are projected to rise significantly, from their current level of around 5 percent of eligible earnings to over 13 percent by 2030. An alternative is to set contribution rates at their underlying long-term levels. Such a policy would imply a significant rise in current contribution rates, to 10-10½ percent of eligible earnings, but would allow the system to cope with the retirement of the baby boom generation without recourse to borrowing or significant increases in contribution rates.

Keywords: WP; contribution rate; rate; earnings; benefit; cost; pay-as-you-go rate; benefit rate; CPP benefit; scheme cost; CPP pension; Pensions; Wages; Pension spending; Aging (search for similar items in EconPapers)
Pages: 24
Date: 1994-08-01
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Citations: View citations in EconPapers (1)

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