Changes to CPP part of changing mindset

Age adjustment should see employees working longer, easing of succession challenges
By Bill Leesman
|Canadian HR Reporter|Last Updated: 12/06/2011

Canada has a growing, concerning issue. It has more than one generation of people groomed on the “Freedom 55” concept — build up your retirement fund and don’t wait until you are 65, retire 10 years earlier and enjoy life. But we also have an attitude, subconscious or not, that the government will take care of us.

New Year’s Day in 1996 was a momentous day for Canadians. On that date, the Canada Pension Plan (CPP) Act came into existence. It was “an act to establish a comprehensive program of old age pensions and supplementary benefits in Canada payable to and in respect of contributors.”

But by the mid-1970s, concern for the long-term viability of CPP was growing and, by the mid-1990s, that concern reached a crescendo with a low contribution rate and a growing, aging population. In addition, the rise of the retired baby boomers had not even reached its peak. Changes had to be made or the fund would run out by 2015. CPP had become a “hot potato” of debate.