Fixing Our Pension Crisis:
Toward retirement security
for everyone
Remarks for a Community Pension Forum
May 19, 2010
Michael J. Prince
Lansdowne Professor of Social Policy
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What is the question?
Are Canadians saving enough for
retirement?
 What do people of different incomes and
different age groups need to save to enjoy
what most consider to be a comfortable
retirement?
 What is the best way to enable Canadians
to save, invest and prepare for
retirement?

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Is there a crisis?

Three basic viewpoints:
– No real crisis the overall system is strong and
elderly poverty rate is low, only minor refinements
needed
– A temporary crisis due to economic and financial
market downturns in 2008-09, and some “undersaving”
– A systemic crisis inadequate and declining private
sector coverage, solvency problems of some benefit
plans, longer life expectancies, and high debt loads
among Canadian families
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What are Canadians doing?


September 2009 TD Canada Trust survey found that
80% of Canadians found saving money “too hard”
November 2009 Royal Bank of Canada poll indicated:
– fully one-third of all Canadians had no retirement savings
– Only about half of Canadians 55 years or older have made
retirement plans
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
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April 2010 Investors Group survey found that 62% of
Canadians plan to carry debt such as mortgages into
retirement years
Delaying planned retirements and working longer
Some recently retired returning to work
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Recent public policy actions



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Increased age limit for maturing RRSPs and
pensions from age 69 to 71
Increased pension surplus threshold for defined
benefit Registered Pension Plans (RPPs) from
10% to 25%
Pension income splitting for seniors
Tax-Free Savings Account (TFSA)
Registered Disability Savings Plan (RDSP)
Modest changes to Canada Pension Plan
5
Trends in private pensions

Shift away from Defined Benefit (DB) plans

Increase in Defined Contribution (DC) plans

Growth in Group RRSPs

Increase in Deferred Profit Sharing Plans (DPSP)
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Possible public solutions
Public programs

–
–
–
Increase GIS benefits
Review OAS/GIS system
Provincial elderly benefits
Canada/Quebec Pension Plans

–
–
Raise the benefit rate and/or the yearly maximum pensionable
earnings
Improve access to CPP Disability benefits
A new national (or provincial or regional)
supplementary pension plan

–
Government-sponsored, automatic enrolment like a second
tier to the C/QPP with a defined contribution and individual
accounts, locked-in for retirement
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Possible ‘private’ solutions
Increase contribution limits on RRSPs and TFSA's
 Extend Pension Credit to apply to everyone
 Raise the age people must switch RPPs and RRSPs to
Registered Retirement Income Funds (RRIFS) from 71 to
73
 Extend spousal income-splitting to RRSP holders as
exists for RPP members
 Allow employers to deduct from payroll tax base their
contributions to groups RRSPs
 Permit insurance companies and other providers to offer
multi-employer pension plans
 Allow physicians to contribute to group pension plans

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Next steps
What issues face you, your family, your
neighbours, your co-workers in saving and
planning for retirement?
 What do you think of the proposals being
presented by various groups?
 What policy changes would like to see in
order to move toward all Canadians
having a secure retirement income?

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