In September 2010, CARP made a detailed budget submission to the Standing Committee on Nova Scotia Department of Finance, what follows is an executive summary of the positions taken in the submission. You may also read the full submission by clicking the link at the bottom of the page
Who We Are
CARP is a national, non-partisan, non-profit organization with over 300,000 members across the country. CARP is committed to advocating for social change that will enhance the quality of life for all Canadians as we age. Financial security is a principal concern for our members and our advocacy. These are our recommendations to help Canadians achieve retirement income security.
I. CPP Expansion
1. CARP recommends that the CPP expansion be made at a level that will substantially improve on the adequacy of retirement income now provided by the CPP and that it be supplemented with both Pillar One and Pillar Three improvements to provide adequate levels of retirement income. CPP Expansion is a welcome advance in providing more income security on a universal, mandatory and defined benefit basis. However, the modest levels of increase proposed alone cannot provide the 60 – 70 percent that is considered the acceptable replacement rate for middle-income earners.
II. Proposed Supplementary Pension Plans
2. CARP recommends that proposed supplementary pension plans contain the features of a universal pension plan modeled on the CPP providing targeted or defined benefits with mandatory or auto-enrolment, utilizing the existing payroll deduction mechanism, professional management, a governance role for members, a mandate that is focused entirely on optimal performance and independence from government or any single employer.
III. Plan Features Designed to Minimize Risks Associated with Large, Private, Multi-employer Plans
3. Newly created supplementary pension plans should be universally available to the employed, self-employed, and even the unemployed, regardless of whether the employer has enrolled in the plan. Similarly, the plans should be mandatory or based on auto-enrolment, with the possibility for individual opt-outs.
4. Savings adequacy should be an integral goal of a multi-employer pension plan.
5. Supplementary MEPPs should offer defined benefits, which are superior to defined contribution plans in cost/benefit and resistance to market fluctuation.
6. Supplementary MEPPs should operate under regulated maximum Management Expense Ratios (MER) and have governance and accountability mechanisms that properly balance the interests of employers, employees, and retirees.
7. Supplementary MEPPs should be of a sustainable size and offer benefit portability to plan participants.
Keywords: pension reform, CPP, plans