Despite years of study, reports, hearings and consultations, and a clear need for change, the governments have once again postponed addressing the fundamental problems affecting employer pension plans. The excuse is the economy and a fragile recovery. But as they wait for better times, the governments have failed to notice that the business of rewarding employees has changed. Companies no longer support the expansion and creation of employer-sponsored pension plans. Companies that weren’t involved before are not going to start now. The government needs to act.
Flaherty’s Pooled Registered Pension Plans (PRPPs) are false promises. They are supported only by the financial industry, who see a new money making scheme, and by businesses, who know they wont have to pay. PRPPs wont resolve the country’s retirement income issues. Flaherty has done nothing to curb the financial industry’s fees and administrative costs – among the highest in the developed world. Nor has he signalled an equalization of saving rates between private and public employers’ pension plans. So we are left waiting for the next round of study, reports, hearings and consultations.
Jim Murta, Fellow of the Society of Actuaries; Fellow of the Canadian Institute of Actuaries; Former President of the Canadian Institute of Actuaries
Keywords: pension reform, PRPP