Canada’s Federal 2012 budget and the Ontario Provincial budget both arrived last week, just like the expected bouncing babies Finance departments deliver every Spring. Also to be expected, the federal budget baby was born wriggling with it’s insecurity blanket – the Old Age Security (OAS) program. By the reaction of some, you’d think the Feds had cut off a part of their aging anatomy, and stolen their blanket.
Now that Actuarial Accountants, Financial Planners and politicians have opined on the matter, we can all come down off the ceiling and count our body parts. We haven’t lost a limb. By the time the change to the OAS take effect in 2023, (applied over six years to 2029), most of the Boomer cohort will be about 59 and older – and I’m sure they and those younger will have had more pressing issues to fret about.
If you look at the history of the Old Age Security Act (1952), the eligibility age was 70. It lowered to age 65 in the 1960’s. We’ve been adjusting this program, going back to 1927 when it was the Old Age Pensions Act – also deemed age 70. By the way, Finance Minister Flaherty was quoted saying, “this is a social program.. not a pension program”. Tell that to the folks who write the Service Canada web info where it’s called a pension.
Mincing words, pension plans are social plans, just like employment insurance. Hey, it’s all our money being re-circulated in the birthing of annual budgets.