Major issue of pensions – First among the victims of inflation

Big pension issue - First among victims of inflation

UPDATE DAY

While the rise in the cost of living continues to break records, voices are increasingly being raised about the fate reserved for retirees, whom many consider among the main collateral victims of the outbreak of inflation.

  Their great drama, to them, is that it happens at a time in their life when they can no longer recover , explains the coordinator of the 'Observatory of retirement, François L'Italien. 

“The younger ones can choose to work overtime, opt for a better paying career, or even find a side job while they adjust to the situation. But the oldest unfortunately do not have this luxury. » 

Special Advisor for Government Relations of the Réseau FADOQ, the largest group of seniors in the country with more than half a million members, Philippe Poirier-Monette confirms this. “Without indexation of their pensions, most retirees have no choice but to watch helplessly as their purchasing power rapidly erodes.”

The recent surges in inflation have affected them all the more since the pension plan set up by the federal and provincial governments originally relied on the contribution of plans set up by employers.

However, for two decades, deplores Serge Cadieux, first vice-president of savings market development at the Fonds de solidarité FTQ, employers who offered generous defined benefit plans are becoming increasingly rare. 

And plans that have managed to escape the wave of conversion to less binding systems, known as defined contribution systems, have virtually no indexation clauses to protect themselves against inflation.

Result: even if the contributions from the public Old Age Security, Guaranteed Income Supplement and Quebec Pension Plan remain indexed, the savings income of retirees – often accounting for more than 50&nbsp ;% of their pension – remain vulnerable to increases in the cost of living.

How much? According to researcher Riel Michaud-Beaudry of the Retirement Observatory, the payment of the same amount of pension, over a period of 30 years, tends to see its true value decline in doing so by approximately 35%.< /p> GRAND DOSSIER — The retirement of Quebecers Our Chronicles Testimonials