CARP calls on government to honour Canada’s pension promise and releases Universal Pension Plan


October 21, 2009

CARP calls on government to honour Canada’s pension promise and releases Universal Pension Plan

HALIFAX, Nova Scotia: Canada is not honouring its promise to keep Canadians out of poverty in retirement says CARP which calls for immediate pension reform to help Canadians now at risk as well as to prevent such insecurity for future generations.

At a public meeting organized by CARP’s Halifax Chapter on retirement security, CARP released its position papers calling for comprehensive pension reform:

to prevent the kind of financial disasters faced by pensioners whose employers are unable to meet deficiency payments, to provide immediate relief for those currently at risk and for low income retirees and to provide a universally accessible retirement savings vehicle so future generations can save properly for their own retirement.

Attached are

CARP’s Position Paper on its proposal for a Universal Pension Plan and CARP’s pre-budget submission to the House of Commons Standing Committee on Finance

increase Old Age Security and Guaranteed income Supplements initiate comprehensive pension reform to better protect pensioners create a Universal Pension Plan to allow Canadians without workplace pensions to better save for their own retirement adopt a National Caregiver Strategy to support Canadians caring for older loved ones – an integral part of retirement security calculations “Government is not being asked to bail out retirees – just re-balance their interests as compared to their employers to better protect their retirement security. The economic crisis has exposed the flaws in the pension regulatory regime. Better regulation of our pension system would have mitigated the disastrous impact on the pensioners”, said Susan Eng, Vice President, Advocacy of CARP.

“Compensation schemes that encourage inappropriate risk taking, contribution holidays, lack of accountability to plan members, lack of timely valuations, low priority for pensioners in a bankruptcy are but a few of the things that need changing”, added Eng.

An estimated 11 million Canadians have no workplace pension plan and one in three Canadians retire without any retirement savings at all. The CPP provides a maximum of $10,905 a year and even with the full OAS of $6,203.52, is inadequate to live on, especially in any major urban centre where most services for seniors are located.

There is a growing recognition that there must be a new savings vehicle to help people better save for their own retirement but that is where the consensus largely ends.

CARP proposes a Universal Pension Plan modeled on the CPP as the best way to provide a widely accessible, affordable retirement savings vehicle that will provide an adequate pension and be robust enough to withstand the demographic and economic challenges such as those of recent months.

There is already a great deal of lobbying against the creation of such a large widely accessible pension fund.

“It’s a political choice. The pension crisis will not solve itself. Government has a role in repairing the pension regulatory system and to ensure that everyone has the opportunity to save adequately for their own retirement. How they do it requires expert advice. But doing nothing is not an option,” said Eng