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Half of Canadian couples between 55 and 64 have no employer pension between them, and of those, less than 20 per cent of middle-income families have saved enough to adequately supplement government benefits and the Canada/Quebec Pension Plan, says the report.

Robert Byron/Getty Images/Hemera

A large percentage of older, working Canadians are heading into retirement without adequate savings to keep them out of poverty, a new study suggests.

Half of Canadian couples between 55 and 64 have no employer pension between them, and of those, less than 20 per cent of middle-income families have saved enough to adequately supplement government benefits and the Canada/Quebec Pension Plan, says the report, to be released Tuesday by the Broadbent Institute.

"The vast majority of these Canadians retiring without an employer pension plan have totally inadequate retirement savings," said the report, which was authored by pension consultant Richard Shillington. Among all Canadians ages 55 to 64 without pensions, half have only enough savings to last for one year.

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Income trends suggest the percentage of Canadian seniors living in poverty will increase in the coming years, especially for single women who already face a higher than average rate, the report said. The poverty rate for seniors will climb at the same time as a sharply rising number of Canadians hit retirement age in the next two decades; more than 20 per cent of the population will be older than 65 within 10 years.

"This new data on retirement savings and gaps in support makes one thing perfectly clear – we have a retirement-income crisis on our hands that requires urgent government action now," said Rick Smith, executive director of the Broadbent Institute, an Ottawa-based, left-leaning think tank.

Ontario's Liberal government is proceeding with its promised Ontario Retirement Pension Plan, while Ottawa has deferred a decision for a year on whether to bolster the CPP/QPP in order to consult with the provinces and territories.

The ORPP would supplement the Canada Pension Plan and apply to people who do not already have a comparable workplace plan. It will be funded by contributions from workers, matched by their employers. For someone earning $45,000 annually, the ORPP would return $6,410 a year in retirement if paid into for an entire working life; for someone earning $90,000 or more, that figure would be $12,815.

But Mr. Smith said a national response is required. "Our new study shows now isn't the time for Ottawa and the provinces to punt on expanding the CPP," he said. "In fact, we need federal leadership to make this happen."

However, critics – including Conservative MPs and Saskatchewan Premier Brad Wall – oppose any major increase in CPP premiums, arguing higher payroll levies would act as a tax on jobs.

The Canada Pension Plan pays out a maximum $12,780 a year. But many retirees don't qualify for the maximum – the average CPP payment for men last year was $7,626 while the average for women was $5,922. Seniors also collect Old Age Security payments to a maximum of $6,839, while the poorest seniors can collect the Guaranteed Annual Income. Mr. Shillington said the combined plans fall below $20,000 for an individual.

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"It's not what you would want for your mother," he said in an interview.

Mr. Shillington's study noted that the existing retirement system has succeeded in keeping Canada's poverty rate among seniors well below the average for industrialized countries. But the public system's income replacement for Canadians with average earnings ranks near the bottom of industrialized countries, with mandatory contributions by employees and employers also falling below the international average for rich countries.

Ottawa's pledge to increase by 10 per cent the guaranteed income supplement – paid out to the poorest seniors – would cost $700-million and remove 85,000 single people – mostly women – from the poverty rolls.

But that would still leave 634,000 seniors living below the poverty line. And that number will grow dramatically in the coming years.

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