KPMG national tax partner Paul Hickey says the tax cost of boosting RRSP limits may not be palatable, given the deficit. “Accelerating TFSA limits” would entail less immediate tax costs to federal revenues, he said.
CARP director of advocacy Susan Eng says higher RRSP limits “will help the better paid” but a better option might be raising lifetime limits for those who can set aside more later in their careers. That’s comparable to “past service contributions” available to those with workplace pensions.
Ms. Eng also likes the proposal to redress the Pension Adjustment mismatch responsible for the DB bias. It would be nice if all Canadians could maximize the tax deferral room provided by PAs but “the reality is in public-service pensions, the employer uses our tax dollars to fill that room,” she said, “That’s why CARP calls for a universal pension plan.”
Keywords: RRSP, pension reform