Submission
by the
Canadian Life and Health Insurance Association
to the
Government of British Columbia
on
Savings for Retirement
April 1, 2010
I: INTRODUCTION
Canada's retirement system is internationally recognized as a success. The recent Melbourne-Mercer Global Pension Index ranks Canada’s pension system among the top four worldwide1. But gaps in retirement-focused savings remain for middle incomer earners, and corresponding refinements of our private pension regime to address these shortfalls are needed.
As service providers to many private sector pension and retirement savings arrangements, Canada's life and health insurance companies have direct experience and knowledge of the strengths and challenges of our "three pillar" retirement savings and income system, and much to contribute to discussions of pension income adequacy.
In this paper, we review current savings gaps, discuss principles that should form the basis of a robust and efficient pension system, and consider the benefits and challenges of current proposals in light of both these gaps and principles. We recommend simple legislative changes that would quickly and efficiently facilitate expanded access to flexible, competitive, retirement arrangements for all working Canadians.
Canada's existing pension regime is fundamentally sound but the scope of public elements was never intended to exceed basic income replacement. Small legislative and regulatory changes can leverage existing private sector infrastructure and expertise to increase coverage, adequacy and the security of supplementary retirement incomes for Canadians, at costs competitive with public plans. Moreover, these changes can be implemented quickly, and avoid the significant fiscal risks of expanding public pension systems or creating new government-sponsored arrangements.
More broadly, Canadians need to play an active role in building their retirement prospects. The attached CLHIA report, entitled Saving More for the Future: An Achievable Goal for Canadians, identifies simple ways to support behaviours that can help deliver the retirement resources and lifestyles we all seek.
1 http://www.mercer.com/globalpensionindex
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