If you ask a registered pension plan administrator that has been dealing with GST/HST pension rebates and other tax filings what the acronym CRA stands for, it might suggest “confused revenue agency” or “confounded revenue agency.” Stories abound over pension entity rebate claims denied, time-wasting audits and reviews over small amounts, and demands to provide additional information and filings.
Like many people who work in pensions, Elaine Noel-Bentley certainly didn’t expect to end up in the industry. “Nine-year-olds don’t say, ‘I’m going to be a pension guru when I grow up,’ ” she says.
My parents came from a small town in Italy near Monte Cassino. Apart from a famous battle there in World War II, the town is known for its monastery, which was established by St. Benedict in 529 AD, shortly after the continent had descended into the Dark Ages. For the better part of the next millennium when the “light of learning” was all but extinguished in Europe, there were only a few universities and monasteries—such as the one at Monte Cassino—where it continued to flicker.
The Melbourne Mercer Global Pension Index has given Canada’s retirement savings and income system another B rating this year. The positive impact of increasing the Old Age Security (OAS) retirement age was offset by the continued reduction in pension plan coverage for employees in the private sector. Canada’s overall index value was 69.2.
In Benefits Canada’s 2011 Top 50 DC Plans Report, 46 plans had an increase in assets; this year was not as strong, with only 32 plans with an increase. But despite the drop, the DC space is preparing for an even bigger change as Canada’s retirement landscape moves through a period of reforms. As the population lives longer and the baby boomers begin to retire, Ottawa is reacting to these demographic realities with initiatives for Canadians to work longer and save more for retirement.
Probably the most significant change in the DC landscape over the past five years is the realization that, instead of solely focusing on educating DC plan members to become wise investors, plan sponsors need to consider how best to deal with the significant percentage of members who have at least one of the following traits:
With pension liabilities rising to record levels, many individuals are facing hard choices as a result. Should they delay retirement or lower their retirement standard of living? What about increasing investment risk? While an individual can make any one or combination of these choices to improve his or her situation, what about society? Can society improve its pension situation?
People don’t consciously control a lot of their behaviour. For plan sponsors, this is frustrating, because getting employees engaged in benefits and retirement plans is all about behaviour change.
The core of any employee benefits plan is the pension. But with DB plans, rapid changes in longevity have pushed the majority of funds into an underfunded position, and employers are increasingly closing plans to new entrants in order to get the deficit under control and reduce the pressure on the corporate balance sheet.
The new BC Pension Benefits Standards Act (PBSA) emphasizes governance and the role of the pension administrator.