By 2050, there will be as many people over the age of 65 as there are people between the ages of 20 and 64—the ratio is expected to rise from 4.1 to 2.2.
As well, the number of people receiving OAS will grow by 60% over the next two decades, finds the 12th annual Actuarial Report on the Old Age Security Program.
The report’s been prepared as a result of compliance requirements of the Public Pensions Reporting Act, which requires the chief actuary to release a triennial report on OAS benefits under the various parts of the Old Age Security Act.
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Currently, 5.3 million people receive OAS, says the report. But that number will grow to 8.4 million by 2030 “due to the retirement of the baby boom generation. [Also], OAS basic pension annual expenditures are projected to increase from $33 billion in 2013 to $74 billion in 2030, and [then to] $144 billion in 2050.”
On the plus side, “That expected increase…will be somewhat mitigated by the legislated gradual increase in the age of [OAS] eligibility from 65 to 67 over the period 2023 to 2029.”
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Still, explains the report, “total annual expenditures [will likely] grow from 2.3% of GDP in 2013, a level similar to the one in 1980, to a high of about 2.8% in 2033, a level somewhat higher than the historical peak of 2.7% reached in the early 1990s.
“Ultimately, however, the fact that benefits are indexed to inflation, as opposed to wages, drive[s] the cost of the OAS Program relative to the GDP down over the long term, with the result that annual expenditures are expected to fall to 2.4% of GDP by 2050.”
For more, read the report.
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