Canadians’ retirement prospects look dim as an economic challenge grows
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Canada has been knocked out of the top ten in Natixis Global Asset Management’s yearly ranking of countries in terms of retirement security.
The 2017 Global Retirement Index published by Natixis saw Canada place eleventh out of 43 countries. Taking into account numerous factors across four categories — finances, health, material well-being, and quality of life — Canada garnered an overall score of 76%.
A major factor in the decline was Canada’s performance in the area of material well-being. Specifically, the country ranked 21st in terms of income inequality, falling five places compared to last year. The drop “indicates that many Canadians are missing out on economic growth and may be struggling to save for a secure retirement as a result,” Natixis said in a statement.
Declining scores for employment and per capita income present additional challenge for Canadians. This is especially significant given organizations’ shift from pension plans to defined-contribution plans, which transfers the major burden of retirement funding from employers to employees.
Offsetting Canada’s poor showing in material well-being is its relatively strong performance in health. The country finished tenth for per capita health expenditure as well as insured health expenditure, a measure of the share of health costs covered by insurance. It also saw an improvement in its score for life expectancy.
However, the country’s old-age dependency ratio — a measure of the number of people age 65 and above against the number of working-age individuals — has risen. This dragged Canada down in the finances category because it puts increased stress on government programs that support retirees.
“In a survey of investors conducted by Natixis earlier this year, 78% feel that funding retirement will fall increasingly to them rather than to the government,” the firm said.
The growing threat of unfunded pension liabilities is not unique to the Great White North. Citing data from the World Economic Forum, Natixis said the world’s six largest pension saving systems face the prospect of a US$224-trillion gap by 2050.
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The 2017 Global Retirement Index published by Natixis saw Canada place eleventh out of 43 countries. Taking into account numerous factors across four categories — finances, health, material well-being, and quality of life — Canada garnered an overall score of 76%.
A major factor in the decline was Canada’s performance in the area of material well-being. Specifically, the country ranked 21st in terms of income inequality, falling five places compared to last year. The drop “indicates that many Canadians are missing out on economic growth and may be struggling to save for a secure retirement as a result,” Natixis said in a statement.
Declining scores for employment and per capita income present additional challenge for Canadians. This is especially significant given organizations’ shift from pension plans to defined-contribution plans, which transfers the major burden of retirement funding from employers to employees.
Offsetting Canada’s poor showing in material well-being is its relatively strong performance in health. The country finished tenth for per capita health expenditure as well as insured health expenditure, a measure of the share of health costs covered by insurance. It also saw an improvement in its score for life expectancy.
However, the country’s old-age dependency ratio — a measure of the number of people age 65 and above against the number of working-age individuals — has risen. This dragged Canada down in the finances category because it puts increased stress on government programs that support retirees.
“In a survey of investors conducted by Natixis earlier this year, 78% feel that funding retirement will fall increasingly to them rather than to the government,” the firm said.
The growing threat of unfunded pension liabilities is not unique to the Great White North. Citing data from the World Economic Forum, Natixis said the world’s six largest pension saving systems face the prospect of a US$224-trillion gap by 2050.
Related stories:
Canada ranks third to last in global survey of healthcare systems
Retirees group calls for pension protection across Canada
