CARP to Finance Ministers in Whitehorse: Time for action on pension reform

No significant action since May

In the interim, there have been other technical changes announced to improve the pension regulatory regime but no federal government proposals to address the growing consensus that there is a need for a supplementary pension to help people better save for their retirement. Some provinces, notably, BC, Alberta and Nova Scotia have voiced a willingness to proceed on this front if the federal government refuses to participate. It should be noted that these are the provinces which had already received reports from their pension reform panels so they would have no further reason for delay.

Human face of pension crisis

There is a silver lining to the delay: there has been time for the media to put a human face on the issue of pension fund deficiencies and the last place standing of pensioners in an bankruptcy. The in-depth reporting in all the major media throughout the fall gave the public a clear understanding of the depth and breadth of the problem.

So not only is there real public pressure for pension reform to re-balance the interests of employers and employees but there is now general realization that 11 million Canadian workers don’t even have pensions to worry about, that one in three Canadian workers retire without any retirement savings. And the thousands people who thought they had safe pensions now see that their retirement dreams may never be realized.

Growing Consensus for a Supplementary Pension Plan

And while a new retirement savings vehicle was not really central to the original mandate of those provincial review panels, CARP and other retiree organizations called for a new retirement savings vehicle that would provide a universally accessible, affordable saving vehicle that would provide an adequate pension and be robust enough to withstand the kind of turmoil we’ve seen recently. CARP’s proposal for a Universal Pension Plan is attached and may also be found at: http://www1.carp.ca/PDF/Universal%20Pension%20Plan%20FINAL.pdf

Lobbying against a Supplementary Pension Plan has already begun

Groups like the Investment Funds Institute of Canada, the Canadian Bankers Association, and the Financial Advisors Association of Canada prefer to see improvements to employer-sponsored pension plans and RRSPs, warning the government AGAINST creating a new one-size-fits-all pension approach. They urge politicians to improve the existing system instead.

“Canadians would benefit from any improvements to the existing savings options offered by the retail investment industry spurred on by the pressure for a universally accessible and affordable retirement savings vehicle but such improvements are unlikely to materially improve on the status quo. The push back is further proof that idea of a Universal Pension Plan has gained sufficient traction that it will challenge the retail investment industry to better serve Canadians or lose their business”, added Eng.

CARP is a national, non-partisan, non-profit organization committed to advocating for a New Vision of Aging for Canada, social change that will bring financial security, equitable access to health care and freedom from discrimination. CARP seeks to ensure that the marketplace serves the needs and expectations of our generation and provides value-added benefits, products and services to our members. Through our network of chapters across Canada, CARP is dedicated to building a sense of community and shared values among our members in support of CARP’s mission.