Finance Minister Bill Morneau is meeting with his provincial counterparts Monday to discuss potential CPP enhancements. These discussions should be undertaken as part of a national and coordinated approach to reforming the retirement income system, suggests Ian Russell, president and CEO of the Investment Industry Association of Canada (IIAC).
Russell says research shows the majority of Canadians are on track to meet their retirement savings goals through voluntary savings, pension plans and the federal retirement savings system. The retirement savings shortfall is not widespread in Canada, but limited to Canadians with modest incomes.
IIAC’s favoured approach to reforming the retirement income system would include a modest, targeted expansion of the CPP, which would supplement the pension savings of modest-income Canadians across the country. This would eliminate the need for the ORPP, or similar provincial initiatives. A national approach, argues the industry group, is favourable to a patchwork of provincial schemes that treat Canadians differently, resulting in unfairness and economic disparities, and limit pension portability in an era of high labour mobility.
Russell adds retirement savings reforms should also embrace measures that improve the efficiency of existing tax-assisted retirement savings programs, such as raising the maximum age for RRSP contributions beyond 71, and eliminating the rules mandating minimum yearly drawdowns from RRIFs, as Canadians work longer.