Fred Vettese and Bill Morneau say Canada has no retirement crisis
TORONTO, Dec. 13, 2012 /CNW/ - Canada is not facing a retirement crisis,
according to a new book by Fred Vettese and Bill Morneau of Morneau
Shepell. Vettese, the company's Chief Actuary, and Morneau, Executive
Chairman, have collaborated on a book that destroys many myths about
The Real Retirement: Why You Could Be Better Off Than You Think, and How
to Make That Happen, just released by John Wiley & Sons Canada, says
Canadian seniors are among the best-off in the world and can look
forward to a better retirement lifestyle than they think.
"There is widespread perception that Canada is suffering a retirement
crisis," says Vettese. "But there is no crisis and our research
suggests there won't be one. That is because, for most Canadians, our
real retirement income targets are lower than most of us think. The
target is not 70 per cent, but is closer to 50 per cent. At the same
time, our potential sources of retirement income are higher than we
The book shows that the poverty rate among Canadian seniors is less than
half what it is for working-age Canadians. This is partly because there
are really four pillars to Canada's retirement system, not just the
three we usually think of: Old Age Security and the Guaranteed Income
Supplement, the Canada Pension Plan and Quebec Pension Plan, and
tax-assisted vehicles such as RRSPs and workplace pension plans. The
fourth pillar consists of assets outside of traditional retirement
vehicles in the form of real estate, cash, stocks and bonds.
"The assets in this fourth pillar far outweigh the sum of all the assets
in the first three pillars," says Bill Morneau. "Canadian seniors have
more assets that can be converted into retirement income than they
The authors say the next 20 years will be challenging because of lower
investment returns and longer life spans. Canadians, however, will cope
with this change by working longer. The average retirement age will
rise from 62 to about 66.
Other conclusions in the book:
We spend a lot less when we're 80 than when we're 60, which means we can
spend a bit more at 60 than we think,
Even with low interest rates, annuities are a surprisingly good deal by
the time we're 75, and
The prospect of paying for long-term care shouldn't stop us from
spending our money wisely while we're still healthy.
Fred Vettese, who is a frequent commentator in the media about pensions
and retirement, has more than 25 years of experience in the retirement
industry. He speaks at conferences such as the ones organized by the
Conference Board of Canada, and is a member of the C.D. Howe Pension
As Executive Chairman of Morneau Shepell, Bill Morneau has led the firm
to become the largest company in Canada offering human resources
consulting and outsourcing services. He is engaged with clients across
the full spectrum of Canadian business and government in their
management of pensions and benefits.
About Morneau Shepell Inc.
Morneau Shepell is the largest company in Canada offering human
resources consulting and outsourcing services. The Company is the
leading provider of Employee and Family Assistance Programs, as well as
the largest administrator of pension and benefits plans. Through health
and productivity, administrative, and retirement solutions, Morneau
Shepell helps clients reduce costs, increase employee productivity, and
improve their competitive position. Established in 1966, Morneau
Shepell serves more than 8,000 clients, ranging from small businesses
to some of the largest corporations and associations in North America.
With approximately 3,000 employees in offices across North America,
Morneau Shepell provides services to organizations across Canada, in
the United States, and around the globe. Morneau Shepell is a
publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For
more information, visit morneaushepell.com.
SOURCE: Morneau Shepell Ltd.
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