The deputy chief economist at Canadian Imperial Bank of Commerce is making an impassioned plea to reform the country’s retirement system as quickly as possible.

“Add it all up, and there are some 5.8 million working-age Canadians who will see more than a 20-per-cent drop in their living standards upon retirement,” Benjamin Tal said in a report.

“That’s why the time to act is now.”

Canada’s Conservative government is studying the possibility of a voluntary expansion of the Canada Pension Plan, the idea being that working people could pay higher premiums for stronger benefits down the road.

It’s not just CPP, Mr. Tal added in an interview, but also the fact that Canadians simply aren’t saving enough. So “we have to be more creative” to encourage savings, whether via CPP, RRSPs or other ways.

“Without getting into the politics of it, it is important to remember why a change to the system is essential,” said Mr. Tal.

“While many Canadians, particularly those now close to 65, are on a path to the retirement of their dreams, the data show that millions of others are headed for a steep decline in living standards in the decades ahead, particularly those who are currently younger and who are in middle income brackets,” he added.

You’re okay if you were born during the Second World War because you’d maintain your standard of living when you take lower expenses into account.

The “leading edge” of the baby boomers are set up almost as well.

“But their children are much less well positioned, given the current trend towards lower savings rates and reduced private pension coverage,” said Mr. Tal, who arrived at the 5.8-million figure by studying age and income groups.

“On average, the replacement rate of those born in the 1980s, who will retire towards the middle of this century, will be only 0.7, implying a 30-per-cent drop in their standard of living.”