CARP Urges Ministers of Finance to Act on Pension Reform – Ministers are Meeting in PEI this Weekend

Susan Eng attendeds a roundable chaired by Dwight Duncan, Ontario Minister of Finance in early June 2010.

On the weekend of June 12-13, 2010, Federal Minister of Finance, Jim Flaherty, will meet with provincial and territorial finance ministers in Lakeside, Prince Edward Island. The ministers are convening to review progress in implementing Canada’s Economic Action Plan, including the importance of balancing budgets in the wake of the current recession and most importantly, to continue discussions about the need to strengthen Canada’s retirement income system.

CARP has worked diligently to be at the forefront of the developing consensus for pension reform, an effort that was again recognized last week when CARP was invited to a roundtable with pension experts chaired by Dwight Duncan, Ontario Minister of Finance. The meeting, which took place in Kitchener, Ontario, gave CARP the opportunity to reiterate our position on pension reform that any new pension plan, should be universal and affordable, to fill the current gaps in pension accessibility. It should also provide an adequate retirement income with target replacement rates of 60-70 percent, as recommended by most experts. The plan should be sustainable, to withstand economic and demographic challenges. CARP also restated the need for the Old-Age Security and GIS part of the pension system be increased to allow those who depend entirely on public pensions to meet the costs of daily living and to share in the increased standard of living to which they contributed all their working lives.

CARP has not wavered in its determination to push political leaders in the direction of meaningful reform. Over the course of the past year, many of the points CARP has insisted upon for reform have been confirmed by recognized experts, from the inadequacy of individual Canadian savings to the merits of defined benefit plans. In fact, a recent report called A Better Bang for the Buck available online here
suggests that defined benefit plans can produce approximately 40 percent more in ultimate benefits than defined contribution plans. Even still, approximately 11 million Canadians, or 60 % of the Canadian work force do not have access to a workplace pension plan, and those who do are less likely now than in the past to belong to dependable defined benefit plans.

In a concerted attempt to remind the ministers of the urgency of the meeting in PEI, CARP has released an open letter to each of the heads of finance. To view a copy of CARP’s open letter to the Ministers of Finance, please click here. The letter outlines the continued struggles of millions of Canadians working towards or already in retirement, while reminding the financial leaders that it is not yet too late to effect real change in pension reform. The letter urges the ministers to establish tangible goals and ‘next steps’ beyond more talk. Moreover, the letter noted the necessity of continually involving citizen organizations such as CARP, which has researched, surveyed and articulated the views of its members about the real issues facing Canadians with inadequate retirement savings and their recommendations for change.