The Third Rail: Confronting Our Pension Failures

The Third Rail: Confronting Our Pension Failures Over the next 20 years more than 7 million Canadian workers will  retire. Baby boomers, the 45- to 65-year-olds who account for 42% of the  country's workforce, will join the largest job exodus in Canadian  history, moving to the promised land of retirement. Unless our crumbling  pension system is reformed, many of these retirees will find this dreamland a bewildering and disappointing mirage.
In the early  1980s, consumers were setting aside 20% of their disposable incomes to  their retirement plans; today the savings rate is a threadbare 2.5%.  Retirement savings plans meant to build Canadians' personal war chests  for their final years have failed to live up to their cheery promises of  early retirement "freedom" - market returns are low, and financial fees  are climbing. Moreover, retirement plans are now being compromised by  high pension obligations and a shrinking workforce.
Canada has  the capacity to diffuse this ticking pension time bomb with some hard  choices, posits Leech. It's time for businesses, governments, unions,  and employees to face these options and fix - and ultimately save - our  pensions system, taking examples from Holland, New Brunswick, and Rhode  Island - places in which new laws have been adopted to repair the  pensions programs.

Jim Leech, who was the head of one of Canada’s largest public sector pension  plans, and Jacquie McNish, a well-respected business journalist and author, combine history, education, context, and solution-oriented case studies for Canada’s looming pension crisis. The authors argue that unless  public policy moves to rehabilitate the country’s ailing pension system,  a grim future awaits both retirees and taxpayers.