April 2010: We reached out to a variety of politicians and invite them to inform our readers of their views on pension reform by drafting a position statement for publication. Here are the answers we received:
The global economic crisis highlighted serious flaws in pension systems around the globe including: poor investment returns; corporate bankruptcies; chronic underfunding of plans; contribution holidays and an aging population, all of which have pushed the pension discussion to the forefront.
In addition, more than 60% of workers in Canada have no pension at all. Clearly this is one of the most serious issues that must be addressed. Creating an environment which helps workers to put away savings is one thing Governments can and should do. This may include reducing income taxes; increasing allowable RRSP contributions; eliminating harmonized sales tax from equity management fees, to name a few.
It is also absolutely critical that students have a solid foundation and a complete understanding of finances, including financial services education in Ontario’s elementary and secondary school curricula. The sooner young people begin saving; the greater the likelihood they will continue the practice into adulthood.
The Report of the Expert Commission on Pensions entitled, Balance: Safe Pensions, Affordable Plans, Fair Rules made 142 recommendations, however, its mandate was limited to defined benefit plans. In fact, the popularity of these plans is in decline as employers look to other models, such as target benefit plans, as an alternative.
Creating financial savings opportunities that allow workers to pool their savings to maximize their return while maintaining individual responsibility, flexibility and portability may provide much needed help to encourage saving.
It is not appropriate or acceptable to wish the pension problem away or to do nothing. It is our hope that the discussion will continue on a national scale to ensure that all Canadians can look forward to retirement knowing they are secure.
Keywords: pension reform