Otta van Bismark, 19th century Chancellor of Germany, in introducing a social insurance program, set the rather arbitrary age of retirement of 65. This at a time when few people actually lived that long. Yet 65 has become sacrosanct for many. While an entire industry has developed in retirement planning helping some to retire early and others to work beyond 65 the concept of raising the age when one can fully collect CPP or Old age benefits is one suggested only by the politically courageous—or suicidal. Twice before Prime Ministers recognizing the economic unsustainably of such a retirement age have been forced to back away from proposals to raise the retirement age. Stephen Harpers recent musings over raising the retirement age represents tough but needed legislation.
The need for reform cannot be seriously in doubt. Whereas 30 years ago there were six tax paying workers for every retiree today there are about 4.5 and in 20 short years the ratio is projected to be 3:1. Surely major reforms are needed.
Judaism has always revered the elderly. There is a specific mitzvah to give honour to the elderly. While modern society associates beauty with youth, the Torah thinks otherwise and associates beauty, hadar, with the face of the elderly, pnei zaken.
Yet the notion of receiving public funds just because one reaches a certain age is foreign to Judaism. Public funds are meant to be used for public needs and giving public monies to all individuals, regardless of need is difficult to justify. Such a consideration should not apply to CPP benefits as they are basically a forced saving plan. Part of our wages arebeing withheld today, to be paid back to us at retirement.
Our tax system recognizes this by clawing back old age security, but not CPP benefits, beyond a certain income level. While one can debate the appropriate income level at which one should no longer be classified as needy the claw back concept has much merit.
Additionally a Jewish pension system would likely take into consideration not only income but also net worth. As is readily evident there is often little correlation between a. person’s net worth and their income. To base government benefits (or tax rates) on income alone can lead to an unfairly distributed tax burden. Truth be told the entire notion of universal benefits makes little economic or moral sense. Why millionaires should receive $100 a month per child under 7 while other children can’t afford lunch is beyond me.
As governments face rising and health care costs and continuing deficits, a choice is going to be needed as to whether we continue with universal benefits by necessarily lowering the level of, or access to, health care or whether some funding will be directed towards the most needy. By imposing user fees on the wealthy or allowing some form of a “two tiered” health system rich and poor alike will end up with better health care.
It is the job of leaders; political, religious and business, to do that which is necessary not that which is expedient, despite the inherent job risks that that may entail.