A group of leaders of major Canadian pension organizations urges Canada’s finance ministers to take action to improve pension coverage and costs.

The group sent a letter to Canada’s Ministers of Finance Wednesday, in anticipation of the ministers’ next meeting on pension reform, to be held in PEI on June 13-14.

The letter notes that the public component of Canada’s pension system is in good shape, but that the supplementary component is not serving Canadian workers as well as it could.

For example, depending on the definition used, between one-half and three-quarters of Canada’s private sector workers do not have access to collective workplace pension arrangements that are well-managed, and operate at low cost.

“This raises serious questions about whether millions of Canadian workers will save enough on their own to maintain their post-work standard of living, and also about the level of fees they may incur attempting to do so,” the group said.

The letter urges the ministers to acknowledge that the noted pension coverage and management cost problems are real, and that they must be addressed.

The group notes that a number of possible solutions have been proposed. Some focus on directly expanding the Canada Pension Plan and Quebec Pension Plan in some way. Another option is enrolling non-covered workers in a low-cost, well-managed, personal pension account-based plan that supplements the basic OAS/CPP/QPP pensions. “This type of supplementary plan could be delivered by existing organizations such as insurance companies or pension plans; or through a new structure under a national (e.g., CPP/QPP) umbrella.”

The letter also urges the ministers to create an impartial Federal-Provincial Task Force of officials to now pull this work together, and to create a practical implementation plan within a short, six-month timeframe.

Such a task force played an important role in the design and implementation of the successful CPP/QPP reforms in the 1990s. The authors of the letter believe it can do so again now.

The group has designated James Leech, president and CEO of Ontario Teachers’ Pension Plan, as its spokesperson.

IE