![Role of DC plans underestimated](https://www.benefitscanada.com/wp-content/uploads/sites/7/2015/03/Savings_2.jpg)
DC pension plans will continue to play an important role in providing retirement security for many years to come, says Morneau Shepell’s Vision newsletter.
Plans could be further improved if better decumulation options were available, something that the provincial governments—including Ontario’s—could make happen, notes chief actuary Fred Vettese.
Read: Remembering why DC makes sense
“We have learned that DC plans are sustainable over the long term, partly because much of the short-term volatility is smoothed out over long periods and partly because participants are resourceful enough to make adjustments to cope with market fluctuations,” he says. “DC plans should work even better in the future with improved online education and modeling tools, age-appropriate default options and a greater focus on keeping investment management fees low.”
In the newsletter, Vettese gives predictions on what will likely happen if the CPP is enhanced or if the Ontario Retirement Pension Plan is launched in its present form. The chief actuary concludes that overall retirement security will improve with an enhancement in the public programs, though not by as much as governments might hope.
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