Retiring Canadians wary of pension system, study finds

Two in every three Canadians nearing retirement think Canada’s pension system is flawed, a study released Friday found.

The latest TNS Canadian Facts survey showed that 67% of people over the age of 50 don’t think the current pension system meets their retirement needs very well.

And nearly half of respondents aren’t confident that their combined Canada Pension Plan and Registered Retirement Savings Plans will provide enough cash flow to live out their golden years comfortably.

A further 37% said they are “somewhat confident” and only 15% said they are “very or completely confident.” Women are slightly more pessimistic than men, the survey found.

The CPP was designed to replace only about 25% of average pre-retirement salaries for low-income earners and even less for middle and high-income earners.

"Clearly, many Canadians are approaching their retirement years with considerable trepidation," said Norman Baillie-David, vice president of TNS Canadian Facts, in a statement.

About 47% of people said they believe a system overhaul is needed and of that group 20% feel extensive reform is needed. Reform proposals supported by survey participants included: additional Tax Free Savings Account room for seniors and moving pension surpluses over to individual holding plans from employers.

Almost three in four respondents agreed pensioners should be given top priority in the event of bankruptcy proceedings.

"We may be seeing a tipping point, with substantial implications for both politicians and the financial industry in terms of how pension savings are managed," Baillie-David said.

Earlier this month, the Ontario government announced a controversial plan to guarantee at least partial payouts for thousands of Nortel pensioners as the once industry-leading tech company folds without topping up its under-funded pension fund.

"Obviously recent events have many people very concerned, and I think we are seeing a build-up of grass roots support for some action."

As a result, Canadians are changing the way they prepare for retirement and taking matters into their own hands, the survey found. Forty-one per cent of participants said they will increase their personal savings and investments, including their RRSP, to lessen their reliance on employer and government pension plans.

TNS surveyed 584 Canadians online, aged 50 years and older between Feb. 11 and 16.