"These studies suffer from significant methodological weaknesses and inconsistencies and massively oversell their results."
Ottawa (12 Aug. 2015) — A Canadian Centre for Policy Alternatives (CCPA) researcher has found glaring inaccuracies and mistaken assumptions in recent pension reports from the Fraser Institute.
The Fraser Institute claims that expanding the Canada Pension Plan (CPP) won't increase retirees' retirement income, because any increases in CPP benefits would be offset in lower personal savings.
Inaccurate conclusion based on untested assumptions
According to CCPA research fellow Hugh Mackenzie, that's an inaccurate conclusion based on the untested assumption that CPP contributions are equivalent to Canadians' private RRSP savings. The Fraser Institute takes that assumption and extrapolates that an increase in CPP contributions would result in a decrease in private savings.
"These studies suffer from significant methodological weaknesses and inconsistencies," says Mackenzie, "and massively oversell their results."
"CPP contributions are significantly more effective"
The CCPA researcher points out that even if Fraser's initial assumption were true, it would actually provide a powerful argument in favour of public pensions.
"CPP contributions are significantly more effective in generating retirement income than RRSP contributions," Mackenzie says.
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