With reforms in the pension industry and prescription drug and pharmacy regulations making headlines this spring, the timing couldn’t have been more perfect for the inaugural Benefits & Pension Summit.

Co-presented by Benefits Canada and the International Foundation of Employee Benefit Plans in April in Toronto, the two-day event hosted almost 400 participants from a variety of industries.

More than 50 speakers presented trends and challenges with employee benefits, defined benefit (DB) pension plans and defined contribution (DC) pension plans. Six educational sessions were dedicated to each category and included managing your pension committee more effectively, the importance of financial literacy and generic drug pricing changes and the effect on employers.

To set the stage for the summit, four of the most well-known names in Canada’s retirement industry participated in the opening-day keynote panel: Opportunities for Pension Reform. Mercer actuary Malcolm Hamilton, pension expert Keith Ambachtsheer, CARP vice-president Susan Eng and Canadian Life and Health Insurance Association president Frank Swedlove presented their views on the future of the pension industry and what potential reforms may look like.

From government intervention and income tax changes to inadequate savings and public versus private plans, reform is clearly front and centre for the Canadian pension industry. But while the audience settled back for an exchange of ideas and posturings, Hamilton reminded them of the 2008 market meltdown, which wreaked havoc in the industry: record-low interest rates (“brutal for pension plans”) and highly variable investment returns (“difficult for DB plans”). He also raised the issues of an aging population, low fertility and maturing DB plans. “All of this creates a very hostile environment for running any kind of retirement savings arrangement,” he said.

But the clouds cleared as the panelists debated and agreed on the problems and solutions. They all agreed there is a lack of coverage in employer-based pension plans. “Three-quarters of the private sector workforce are not members of a pension plan,” said Ambachtsheer. “It will make a difference in the longer term if we can get people into some kind of low-cost system where they can accrue pensions of some kind for the future.”

One solution offered by the panelists was supplementary pension plans. CARP polled more than 2,000 of its members, who indicated that they are in favour of a supplementary plan. However, the respondents “think politicians are not doing this because the benefits of a new supplementary system will take 20 to
30 years to benefit all of us,” said Eng. “And election cycles are every five years.”