Évaluation du système québécois de sécurité financière à la retraite par rapport à celui d'autres pays industrialisés (2012)

(Evaluation of the Québec system of financial security at retirement in relation to that of other industrialized countries - 2012; French only)

This study compares the following aspects of Québec's retirement pension system with those of Canada, Germany, the United States, France, Italy, Japan, the Netherlands, the United Kingdom and Sweden:

• the structures of the financial security systems (Chapter 1),
• recent and upcoming reforms (Chapter 2),
• the demographic and economic environments (Chapter 3),
• the characteristics of public pension plans (Chapter 4),
• the well-being of the elderly (Chapter 5),
• the cost and funding of public plans (Chapter 6).

Highlights

1. Three financial security systems were distinguished:
   • a general public plan with optional supplemental pension plans (Québec, Canada, the United States, the United Kingdom, Japan and Germany);
   • a general public plan with mandatory supplemental pension plans (France and the Netherlands);
   • only a public plan that aims to ensure the level of income replaced is sufficient to provide financial security in retirement (Italy and Sweden).
2. Recent and upcoming reforms concern mainly:
   • a progressive increase in retirement age in Germany, the United States, France, Italy, Japan, the Netherlands and the United Kingdom. In Canada and Québec, however, phased retirement is encouraged by reducing pensions that begin before age 65 and increasing those that begin after that age;
   • increases in the contribution rates in Québec, Germany and Japan;
   • promoting personal savings in Québec, Canada and the United Kingdom;
   • implementing an automatic mechanism to ensure the sustainability of the plans (the mechanism now exists in Québec and was already in place in Canada, Japan, Germany and Sweden).
3. In the coming decades, the effects of the ageing population will be felt to varying degrees and at varying speeds in all developed countries. The number of workers will level off and even drop, especially in Québec. In addition, Québec will see its population age at a rapid rate.
4. Most of the countries studied have begun or announced gradual increases in their normal retirement age. Several have implemented measures relating to early, phased or postponed retirement for workers.

   In Québec and Canada, government assistance is aimed at persons with low incomes; the rate at which the income of workers with low earnings is replaced is higher than the average for OECD countries. It decreases, however, as salaries increase: for those with average earnings or higher, it drops below the average for OECD countries.

5. In several countries, a high percentage of workers could find that, in retirement, their gross income is being replaced at a low rate. This highlights the necessity of expanding the coverage of supplemental pension plans and promoting personal savings in order to avoid having many future retirees falling back on assistance programs.

   In Québec and Canada:

   • The risk of poverty amongst the elderly is below the average for the countries studied. The results are explained mainly by the minimum income level for persons 65 and over that is guaranteed by the Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS);
   • The rate at which average income is replaced by public plans is below the average for OECD countries;
   • The rate at which people save is lower than in the other countries studied.
6. Pensions are generally funded by contributions on the employer's and the employee's part, or by government income. Some countries have set a ceiling on the contribution rate and are implementing mechanisms so that the ultimate contribution rate does not go beyond that ceiling.

   In Québec and Canada, the overall cost of public plans, as a percentage of the GDP, is one of the lowest in the industrialized countries.

   In order to maintain the sustainability of their public plans, Québec, Japan and the United States have created reserves for their pension funds, which will ensure partial funding. Countries such as France and Sweden also fund their reserves, but do so in parallel to pay-as-you-go funding.

For everything you need to know...

Consult the study (French only)