The defined contribution and group RRSP plans currently available to Canadians will provide inadequate retirement income and a comprehensive analysis of the industry is needed, according to a report by the Association of Canadian Pension Management.
Becky West, chair of the ACPM issues task force, speaking at a Capital Accumulation Plan seminar on Wednesday in Toronto said the ACPM is advocating for a choice in the most suitable pension model, which plan sponsors and their employees make together.
“There is no one correct action that will fix defined contribution plans in Canada,” she said. “We believe that it’s a combination of many efforts that are going to make defined contribution plans successful in the future.”
The report, Delivering the Potential of DC Retirement Savings Plans identifies a lack of coverage, adequacy of retirement income, and availability of retirement income alternatives as areas in need of improvement, and presents recommendations for each. West suggested that adherence to these recommendations would result in a more robust spectrum of savings plans and a healthier DC industry.
She encouraged plan sponsors and service providers to implement the recommendations that could be put into practice immediately, and for governments to make appropriate changes to the regulatory scheme. “The primary purpose of our paper is to encourage discussion amongst the stakeholders in the retirement industry,” she said. “Our goal is to have the barriers eliminated to the implementation of retirement savings plans, and to encourage coverage in that area.”
To read the report, click here.
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