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Finance Minister Bill Morneau and his provincial counterparts struck a blow for inter-generational fairness on Monday when they reached a historic deal to update the Canada Pension Plan. The deal is not without problems, but it is an excellent start at addressing the chronic lack of savings in Canadian households.

The nine-year phase-in is gradual, the annual premium increases for most workers are modest, and the reform is aimed at the correct target: younger, middle-income earners who have no workplace pension (a large and growing cohort).

Increasing the maximum annual CPP benefit by about $4,000 and raising the cap on eligible earnings from $54,900 to $82,700 is a decent shot in the arm.

The proposed reform won't comprehensively address Canada's savings gap. But the CPP, which, unlike private savings, guarantees money for life, has considerable value as a "commitment device," as economist and pension expert Tammy Schirle terms it.

A slightly reduced paycheque now for a larger payout later; it's called a good deal.

The granular details of the plan are not yet known but critics are already complaining that companies and individuals can't take another hit in an uncertain economy. Those concerns are overblown. Social security premiums in Canada amount to a little over half the average paid in many countries, according to the Organization for Economic Cooperation and Development (OECD).

Still, greater heed should have been paid to Quebec Finance Minister Carlos Leitao's criticism about premium increases for low-income earners (Quebec will exempt them entirely).

Other shortcomings may emerge, but the question is not whether we can afford to expand the CPP. It's whether we can afford not to.