Reforming Old Age Security: Effects and Alternatives*

The postponement from 65 to 67 of the federal old-age pension eligibility age will increase net federal revenues by 7.1 billion dollars (in constant 2014 dollars) per year by 2030, but reduce net provincial revenues by 638 million dollars. With constant labour and savings behaviour, this should also raise poverty (low income) rates from 6% to 17% for those aged 65 and 66 years group, and would be most harmful to low-income seniors and to women. Alternative reforms could achieve similar public finance objectives without such large impacts on poverty rates among seniors.

This paper has been the topic of CIRANO Note.