While CARP members respond generally positively to the idea of PRPPs as an additional savings vehicle, when they begin to examine them in detail, interest in investing wanes and contrasts with the stability and economy of CPP arise.
Members use a toolbox of “pension parts” to assemble their ideal PRPP, and the result resembles an enhanced CPP
The toolbox of “pension parts” included:
- Guaranteed or target benefit
- Employer contributions
- Low fees
- Promised higher returns
- Professional management
- Regulated management fees
- Auto-enrolment (with opt-out)
- Large fund pool
Two thirds of members have pensions and two thirds know of PRPPs. One half are likely to invest in a PRPP (or would have been) as described, because they see them as a useful additional savings vehicle. However, those potential features of a PRPP which would make them invest are not on offer, and are more like the features of an enhanced CPP.
When asked to assemble an ideal PRPP from various features, the one liked best is very similar to an enhanced CPP, with regulated fees, employer contributions and a guaranteed payout. The private sector is not trusted to provide secure. Low cost investments for Canadians, and a public option is seen to be essential.
The defined benefit is the most important feature of CPP to members, and they believe this benefit should ideally replace, on average, about 45% of pre-retirement income. The vast majority approve of enhancing CPP because it would help those in lower income brackets retire with security. Members agree enhancements to CPP are needed urgently and can’t wait any longer.
The Conservatives lead in voter preference, and the NDP and Liberals are now tied for second place.