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Pension Plan Investment in Canada: The 30 Per Cent Rule

Release Date: 09/16/2016
Staff Reference: Noeline Simon

2016 September 16

Dear Lynn and Pascale:

Pension Plan Investment in Canada: The 30 Per Cent Rule

I am writing on behalf of Canada's life and health insurance companies in response to the June 3rd release of the captioned consultation paper. We greatly appreciated Finance Canada's outreach on this matter, which is of significant importance to our industry; we look forward to continuing, in-depth, consultation opportunities as these issues move forward.

Established in 1894, the Canadian Life and Health Insurance Association (CLHIA) is a voluntary association whose member companies account for 99 per cent of Canada’s life and health insurance business. The industry provides a wide range of financial security products such as life insurance, annuities (including RRSPs, RRIFs and pensions) and supplementary health insurance to 28 million Canadians.

In the workplace retirement sphere, CLHIA member companies are major providers of record-keeping and investment management services to Canada's defined contribution pensions, and to capital accumulation plans more broadly, primarily for small- and medium-size employers. Life insurers also facilitate "de-risking" by defined benefit pension plans, whereby longevity and/or investment risks can be transferred from plan administrators to expert financial services professionals. At the end of 2015, insurers held over $350 billion in assets to support pension and other workplace retirement plan benefits for over 5.9 million Canadians.