Chapter 8 Questions Flashcards
Describe the historical events that led to the start of public pensions in Canada
Until the 1920s, Canadian pension policy reflected the “market ethos,” in that individuals should take the responsibility for themselves in old age and those who need help should rely on their family.
Due to the poverty among older individuals due to high rents, overcrowding, and indirect suffering, the House of Commons issued individuals for $20 monthly pensions and defined them as a right.
What part(s) of the system promote income security?
Income security programs which involve:
- the Old Age Security pension
- the Guaranteed Income Supplement
What part(s) help with income maintenance?
Income maintenance programs which are involved:
- the Canadian Pension Plan
- the Quebec Pension Plan
Describe the shifts that have taken place in the proportion of seniors’ incomes that come from various sources?
The maturation of public and private pensions plans in Canada best explain this shift. The maturation of workplace pension plans also played a role in increasing older people’s incomes.
The more diverse a person’s income sources, the better off that person becomes financially
How does the CPP function as both as savings plan and a transfer plan
It works like a saving plans because each worker pays a percentage of his or her salary into it each month.
The transfer plan works because the money paid in today does not go into a private account for each person; instead it goes to pay the pensions of retired plan members today.
They both work as a pay-as-you-go plan
What role does the CPP play in keeping many older Canadians out of poverty?
CPP pays benefits to more older people, paying benefits and helping support seniors
What steps has the government taken to ensure the sustainability of the SSP
-The government raised contribution rates
- They created the CPP Investment Board to manage CPP surplus revenues
Why have companies moved away from defined benefit pension plans?
Companies find it hard to plan for the costs of defined benefit plans. Making complex and uncertained predictions about workers’ life expectancies and about financial markets in the future.
Governments regulates defined benefit plans, which gives companies fewer options in how they design and fund these plans
Companies say that employees prefer defined contributions plans.
Why does the shift from defined benefit to defined contribution plans shift the risk from employers to workers?
Most people have little financial knowledge and cannot make informed investment decisions. Workers who manage their own funds may choose riskier investments than they should late in their careers
How does this shift affect pensions planning for workers?
Many people near retirement lost large amounts of money in the 2008-2009 stock market decline. Some had to postpone retirement to make up for these losses
Why do older women, compared with older men, have lower incomes in retirement?
Traditional expectations about women and work lead women to have different work patterns than men. Women often leave a first job to raise children. Due to family responsibilities, they spend longer than men between jobs, and they tend to work at each job for a shorter amount of time.
How does the life course view of aging explain the lower incomes of older women?
A person’s work career shapes his or her opportunities and choices in retirement. “Health insurance, pensions, unemployment insurance, disability insurance, and Social Security all rest on the edifice of the male lock-step life course. Women are set up to fail.
How has the source of income changed for older women in the past few decades?
Women are generally paid less then men nad hold lower-status jobs. Women often work in low-wage jobs that are defined as unskilled and offer little chance for advancement. Women earn 56 percent and 85 percent of men’s salaries.
Why do many widows face a drop in income after their husband’s death
Due to the dependency of older women on their husband’s earnings and pensions. Senior widows today often have little or no employer pensions of their own
What reforms has the Canadian goverment put in place to deal with rising current and future pension plans?
- Improvements in GIS have led to decreased poverty rates for single older people
- The CPP allows women and men to deduct some of the years they spent outside the workforce
- Provides for credit splitting
