November 16, 2012 – Susan Eng, CARP VP of Advocacy spoke at the Advocis Regulatory Affairs Symposium at the end of October, an event that brings together financial advisors to listen to and engage with industry leaders, government officials, and other regulatory leaders on key issues facing financial advisors and their clients.
Ms. Eng spoke on a panel with Malcolm Hamilton, Partner at Mercer, and Bill Tufts, Founder of Fair Pensions for All, looking at the changing retirement planning landscape, where defined benefit plans are diminishing and retirement financial insecurity is a growing concern. Jon Chevereau, editor at MoneySense, and one of Canada’s most trusted voices in financial commentary, moderated the panel.
Susan Eng represented the investors’ perspective among financial advisors, reminding the audience of the retirement challenges that Canada is facing: the population is aging and with it more people are retiring under-prepared; Canadians continue to struggle financially, limiting their ability to save; people are losing jobs in late career and face difficulties finding employment; and private investment vehicles and RRSPs haven’t done enough to bridge the retirement income gap facing most Canadians. Given this context, Susan highlighted the following points about investors’ interests:
- Too few good options for saving for retirement: Individual investors are simply trying to save enough for their retirement, but to due various factors, such as lack of workplace pensions, poor investment returns, and people being left to their own decisions with their RRSPs, people are not saving adequately.
- PRPPs don’t deliver on promise: PRPPs have not been favourable with CARP members due to potentially high fees, scepticism of private sector administration, and the lack of mandatory employer contributions. The way that PRPPs are constructed has been no more attractive than RRSPs, which has had a low take-up rate.
- CPP enhancement is still on the table: CARP members are looking for a national/regional savings vehicle with a critical mass that can make sizeable decisions and help guarantee their retirement security, and they see CPP enhancements can achieve this.
The panel discussion highlighted views and perspectives from the industry and pension experts on the challenges that are faced by Canada’s retirement system. One perspective placed a greater emphasis on the state of the economy. It pointed out that what people are experiencing is not necessarily a retirement system crisis but a fundamental economic problem because retirement systems will inevitably struggle when the economy struggles.
Another perspective brought to light the complexity of Canada’s retirement system and how challenging it is for the average Canadian to know how to best invest and save for the future. For example, Ontario seniors have 10 different programs targeted at seniors, including four government pension programs, three retirement savings programs, and three tax-credits. Most people need to be better advised as to how to navigate those programs based on personal needs. The discussions not only brought to light how our retirement system can be improved but it also challenged the industry to think critically about how they can pursue the best interests of their clients.
Most of all, the Panel showed just how crucial it is to continue pushing for pension reform.
Watch the video recording of the panel discussion.
For more information on Advocis, visit their website.
Read more about CARP’s Pre-Budget Consultation proposals and submission to the House of Commons Standing Committee on Finance.