As documented in the study Canada’s Aging Population and Implications for Government Finances and elsewhere, Canada’s federal and provincial governments will experience financial pressures from increases in spending on such pro- grams as health care and income support for seniors.
Canada is not unique in dealing with an aging population. The Organization for Economic Cooperation and Development (OECD) is a group of 35 of the world’s most economically developed countries. The OECD predicts that the dependency ratio (the ratio of retired people to the working-age population) will increase across the OECD in coming decades. The anticipated fiscal pressures on these countries from their aging populations have motivated many of them to enact a vari- ety of reforms in an attempt to mitigate these pressures.
This bulletin provides an overview of one par- ticular reform enacted across most OECD countries: a change in the age of eligibility for public retirement programs.
- The population is aging in high income countries in the OECD, including Canada.
- Of the 22 high-income OECD countries apart from Canada, 16 have either already increased the age of eligibility for public retirement programs to above age 65 or are in the process of doing so.
- Five countries are indexing their age of eligibility to life expectancy, meaning that the retirement age will automatically adjust upward if life expectancy increases.
- There is a clear trend across high-income countries towards increasing eligibility ages for retirement benefits.
Once all the currently planned reforms of the high-income OECD countries are fully implemented, Canada’s 65-year-old age of eligibility will put it in a tie for having the lowest retirement age of the high-income countries.
- In 2015, Canada’s government reversed a 2012 reform that would have increased the age of eligibility for Old Age Security and the Guaranteed Income Supplement to 67 by 2029. The federal government estimates that this reversal will cost $10.4 billion in 2030.
Chosen excerpts by Job Market Monitor. Read the whole story @ The Age of Eligibility for Public Retirement Programs in the OECD: 2022 Update | Fraser Institute