Up to two million demonstrators in the streets, the rail network upside down, schools closed… France experienced, Thursday, the most important day of strike of the Macron era.
As much as the postponement of the retirement age from 62 to 64 unleashes passions in France, the project to push back the age of eligibility for a pension from the Quebec Pension Plan (QPP) goes unnoticed among us. .
It must be said that Finance Minister Eric Girard tabled the consultation document on the eve of the holidays and that the consultations are not scheduled until February.
But the subject, delicate as it is, deserves a public debate. Please, no screaming or gnashing of teeth.
Let’s say it from the outset, the project in Quebec has nothing to do with that of France.
If the pension reform in France is necessary to ensure the balance of the system, it is quite different for the RRQ, which is in full health. There is enough money in reserve to ensure the payment of all pensions within 50 years, which is something to be happy about… with caution.
The changes proposed in Quebec are therefore not intended to save money. On the contrary, retirees would emerge overall winners.
To fully understand, let’s start with a reminder. At the moment, you can apply for the pension from age 60, but the amount will then be much lower than if you wait until age 65, the “normal” age, or, even better, until age 70, the maximum to claim it.
From there, two options are on the table.
In the first scenario, we would raise the minimum age to 62 years and the maximum age to 72 years, by 2030. In the second scenario, the minimum age would increase to 65 years and the maximum age to 75 years, by 2045.
Let’s be clear: retirees would not lose out. For the majority of Quebecers, it pays more to forgo their pension for a few years (even if it means disbursing their savings more quickly to live) in order to receive a higher pension for the rest of their lives.
An annuity guaranteed by the State.
Fully indexed.
Managed by the Caisse de depot, with cutting-edge expertise and minimal fees.
In short, an annuity that provides shelter from the ups and downs of the stock market and protects against the risk of outliving one’s savings. Holy financial peace, what!
Minister Girard is therefore right to present this project as a means of improving the financial security of future retirees, an alarming number of whom are at risk of lacking retirement savings, with life expectancy stretching.
In this context, allowing people to wait until age 75 to obtain a much plumper QPP pension is an excellent idea. Let’s do it! However, the bonus would have to be greater after age 70 than what is provided for in the consultation document for the game to be worth the candle.
On the other hand, it would be better to drop the postponement of the minimum age to 62 or 65 years.
Of course, most countries have already raised the retirement age, some up to 69. In Canada, the Harper government had announced the extension of the age of eligibility for the Old Age Security pension from 65 to 67, before the Liberals canceled the decision.
But we can achieve the same result without taking out the forceps.
In Quebec, the average effective retirement age has already risen from 58.4 to 63.7 years between 1998 and 2021. This remains below the average for the rest of Canada (64.4 years), but we are on the right way.
Even more convincing: the activity rate of Quebecers aged 55 to 59, which has been constantly increasing for 25 years, has just exceeded the Canadian average, even if there is still some catching up to do in the age group of 60. -64 years old.
Another positive sign: in 2016, 60% of Quebecers claimed their QPP pension from the age of 60. Today, it is only one person out of three.
It’s better, but it’s still too much.
Those who apply for their pension as soon as possible, while continuing to work, are making a bad financial decision by burning the candle at both ends.
But it must be recognized that other workers cannot help claiming their pension at such a young age, because their job is too arduous and they have no savings. They are often poorer people whose life expectancy is seven years shorter, which makes postponing the pension not very advantageous.
It would be unacceptable for a reform of the QPP to be carried out on the backs of the poor. This is why it is better to leave the age of eligibility at 60, while providing more information to ensure that the majority of Quebecers make the best decision, which is to postpone the pension.
There is no point in shooting a flower to make it grow faster. It would only do damage. In the same way, we do not need to twist the arm of Quebecers so that they apply for their QPP pension later. The quiet revolution of postponing retirement is already underway. And it will continue, quite naturally.