On behalf of the Members of the Portfolio Management Association of Canada (“PMAC”), we are writing to formally introduce ourselves and to provide input into the Government’s consideration of retirement savings reforms and options. This is an exciting time for the Federal government and an important opportunity to take a leadership role in addressing targeted pension reform in ensuring that all Canadian’s are saving adequately for the retirement phase. Set out below are specific recommendations for your consideration which we believe will ultimately best address the current retirement savings concerns.
Key Recommendations:
- Canada Needs Targeted Pension & Retirement Savings Reforms
- Promote Other Already Available Pension & Retirement Savings Options
- Provide Tax Incentives to Encourage Saving and so Employers Increase Their Benefit Levels (Retirement Programs)
- Streamline the Savings Process – Intergovernmental Coordination
The Federal government has made many strides in recent years to address retirement savings in Canada; the development of the Pooled Registered Pension Plan (PRPP), the Target Benefit Plan Framework (TBP), the creation of the Tax Free Savings Account (TFSAs), to name a few. We have supported the creation of these programs and continue to support proposals that are aimed at strengthening our retirement income system and providing savings options to Canadians. However, as we have stated in previous pension consultations both provincially and federally, we believe in the importance of balancing government responsibility for retirement savings with individual responsibility.
We believe that Canadians currently have a variety of ways in which they can save and prepare for retirement. These include multiple savings vehicles as well as government sponsored options. We also observe that Canadian pension assets continue growing year over year. PMAC does not believe that all Canadians are facing a potential under savings retirement crisis. For these reasons, PMAC recommends that the government aim for targeted reforms rather than creating new or altering or overhauling existing retirement programs, such as the Canada Pension Plan (CPP). Targeted reforms should aim to address the needs of those Canadians who are at most risk of under saving while not compelling those already adequately saving for retirement. We believe that targeted reforms should focus on the third tier of the Canadian three-tier pension system: workplace registered pension plans. In our view, there continues to be a need for educational information on employer options for retirement savings to help employers evaluate the multitude of retirement savings program options available (i.e. pooled registered pension plans, registered pension plans, group registered retirement savings plan, corporate contribution to employee RRSP of choice, etc.) so as to ensure that employers can offer employees adequate opportunities to prepare for retirement.