All workers should have secure pensions, not just 1/3 of the workforce
EDMONTON - On September 16, 2021, AFL President Gil McGowan delivered a stark message and a clear demand to leaders of Canada’s pension and retirement industry yesterday. He said we need to find a way to expand pension coverage to include all working Canadians – or face a future characterized by poverty among seniors, growing political unrest and “the death of retirement as we know it.”
His comments were shared as part of a national panel discussion on retirement income security, held on the final day of the three-day 2021 ACPM Conference.
The Association of Canadian Pension Management (ACPM) brings together pension industry experts and dubs itself, “the voice of the retirement income industry.”
The greatest risk to retirement income security in Canada is the lack of coverage for ordinary working Canadians, McGowan said during the live virtual session.
“There are simply not enough people covered by pension plans in this country,” he said. “Back in 1977, almost half of the Canadian workforce were members of registered retirement pension plans. Now it is 37 per cent.”
In many cases, the divide between having a workplace pension and not having one is whether you belong to a union.
“Basically, if you have a union you have a pension. If you do not have a union, the likelihood of having a pension is much lower.”
The other divide is the difference in pension coverage between public and private sector workers, says McGowan, where about 88 per cent of the public sector have a workplace pension compared to only 22 per cent of private sector workers.
Instead of everyone looking to improve access for those who don’t have retirement security, the politics of pension envy leads some politicians to target union and public sector coverage to polarize Canadians on the issue and endanger current levels of retirement coverage.
“Without a fix to this problem, we are facing issues of increased poverty in retirement,” he said. “I would argue that we are facing the death of the notion of retirement for vast swaths of the Canadian population.”
Issues of poverty and the lack of ability to retire, created a crisis in the ‘60s that led us to create CPP in the 60's, says McGowan. “I think we are heading in that direction again.”
“I think the solution is not to build walls to our existing pensions. It is to widen the circle so more people, I would argue all people, all working Albertans and Canadians, have access to the security that comes from a real, defined-benefit plan as opposed to a privileged few.”
Director of Communications, AFL