Portfolio Management Association of Canada (PMAC) Also Calls For Immediate Action to Relook at HST/GST Implications on Pension and Retirement Savings
(Toronto, December 17, 2010) – The Portfolio Management Association of Canada (PMAC) (https://pmacorg.wpengine.com), the financial industry Association with members that span private clients, pensions, insurance, foundations and endowments, today applauded the proposal from Federal Finance Minister Jim Flaherty calling for a framework for pooled registered pension plans.
“We are very supportive of this latest proposal that provides another option for Canadians to save for retirement. It supports a stronger role for the private sector to fulfill their retirement objectives,” says PMAC President Katie Walmsley. “The proposal avoids the uncertainty and time to amend the CPP. For the six out of 10 Canadian workers (including those self employed) without an existing pension plan, this clearly is a welcome opportunity.”
The Association’s members, who manage over $750 billion in assets, are also concerned the federal and provincial governments are overlooking the impact of GST and HST on pensions and retirement savings as they look at retirement savings solutions. “PMAC applauds the efforts by both provincial and federal governments to create stronger systems to support Canadians into retirement, but HST — as a consumption tax — is at odds with the stated priorities of governments to improve retirement savings adequacy,” says Walmsley, who adds that “it hinders and negates the purpose of saving, particularly when an investor seeks external advice to diversify holdings to optimize investment returns.”
PMAC voiced its concern about the HST’s impact on retirement savings in its federal pre-budget consultation submission in August of 2010. In its submission, the Association recommended that the government exempt discretionary investment management services provided to all retirement savings plans from the provincial portion of the HST. It noted that this alone would be a quick and simple solution to assist Canadian savings for retirement. The tax paid by pension plans, RRSPs and RRIFs was highlighted in PMAC’s comments that the Federal government’s HST policy was working at cross purposes to the policy objectives of improving the adequacy of retirement savings.
“Although we encourage all of the provinces to work with the federal government to make the proposed Pooled Registered Pension Plans a reality, we urge them not to overlook the impact of GST and HST on Canadian families saving for retirement,” says Walmsley.
Formerly the Investment Counsel Association of Canada (ICAC), Portfolio Management Association of Canada (PMAC) represents an influential membership of 140 portfolio management companies that manage more than $750 billion in assets for over one million institutional and high net worth clients. Members span private clients, pensions, insurance, foundations and endowments. As one of the largest financial industry Associations in Canada, PMAC carries on the rich 50-year tradition of ICAC’s work, and operates coast-to-coast in English- and French-language markets.
PMAC employs a collaborative information-sharing business model and advocates on behalf of its members to securities regulators and government agencies. The Association increases the awareness of investment counseling benefits, provides a forum for member networking and keeps members up-to-date on regulatory and compliancy issues. From institutional pension plans to charitable, endowment and high net worth client accounts, PMAC members work to facilitate investment opportunities for millions of Canadians.
PMAC membership has steadily grown in recent years. PMAC represents investment management firms registered to do business in Canada as Portfolio Managers. The Association’s mission is to advocate the highest standards of unbiased portfolio management in the interest of investors served by members. For further information on PMAC, visit www.portfoliomanagement.org.
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Background: Pre Budget Submission