Updated pension legislation and an enhancement to Canada Pension Plan (CPP) could help Canadian workers save enough to support a standard of living they would find satisfactory in retirement, according to a whitepaper.
The paper, “Macroeconomic Aspects of Retirement Savings,” by David Dodge and Richard Dion of Bennett Jones, notes that the current system of incentives may need to be supplemented by some mandatory elements to effectively enhance household savings levels.
“An enhanced CPP or Ontario add-on (with contributions set at actuarially fair rates) would represent a retirement savings vehicle that is superior to many corporate defined-benefit (DB) plans and group or individual savings vehicles,” they write.
The authors note that improvements to voluntary savings options, such as pooled registered pension plans or shared-risk plans, are essential and require modernized legislative and regulatory provisions to be most effective.
“It is also important for Ontario to develop legislation to facilitate the provision of hybrid employer-based pension plans,” they write.
Related articles: