Pensions are getting a lot of ink in the run up to the Finance Ministers’ meeting in Whitehorse on December 17th and for good reason. The markets have rebounded a bit and with them the hopes of pensioners whose employers are still solvent. But the fault lines in our pension regulatory system which were exposed by the economic downturn have not sealed over.
The absence of federal action has led to provincial premiers suggesting that they are ready to go it alone, as Alberta Finance Minister Iris Evans recently confirmed in her reply to CARP. BC had already introduced enabling legislation before the recent election. Others like Nova Scotia’s Graham Steele, also want more urgent action but recommend a national approach. Ontario Finance Minister has mentioned the need to provide a savings vehicle for people who have no workplace pensions but shared no details. And they would all support CARP’s call for a Pension Summit, a couple of them in so many words.
It should be noted that these are the provinces which had already received reports from their pension reform panels so they would have no further reason for delay. So they and we could be forgiven for thinking that the deferral of pension reform from their May 25th meeting until December was unnecessary stalling.
There is a silver lining to the delay: there has been time for the media to put a human face on the issue of pension fund deficiencies and the last place standing of pensioners in an bankruptcy. The in-depth reporting in all the major media throughout the fall gave the public a clear understanding of the depth and breadth of the problem.
So not only is there real public pressure for pension reform to re-balance the interests of employers and employees but there is now general realization that 11 million Canadian workers don’t even have pensions to worry about. And while a new retirement savings vehicle was not really central to the original mandate of those provincial review panels, CARP and other retiree organizations called for a new retirement savings vehicle that would provide a universally accessible, affordable saving vehicle that would provide an adequate pension and be robust enough to withstand the kind of turmoil we’ve seen recently.
Various stakeholders have come up with alternative ideas – insurers saying they have the annuity products to do it. The labour groups calling for a doubling of the CPP. Others say they thought up the idea first. What really matters is that the public discourse has moved away from whether there should be a new retirement savings vehicle to what shape it should take and how much it would cost. Not bad for an idea that the federal government has yet to mention.
Keywords: pension reform