The C.D. Howe Institute today on Thursday that it has formed a blue-ribbon advisory panel to help address key challenges facing Canadian pension plans. The panel will advise on a three-year pension program at the Institute, covering such issues as funding shortfalls, regulatory changes, and shifts toward money-purchase arrangements that cause many Canadians to worry about the security of their incomes in retirement.

The panel will be co-chaired by Claude Lamoureux, president and CEO of the Ontario Teachers’ Pension Plan, and Nick Le Pan, former superintendent of Financial Institutions, Canada.

“We are delighted that pension experts of such calibre have agreed to serve as advisors for our program,” said William B.P. Robson, president and CEO of C.D. Howe. “Their participation reflects the urgency and significance of the issues confronting the pension system.”

The pension system faces problems that will intensify as the population ages, Robson added. Among them:
-Tax laws and other regulations stop some savers, particularly in the private sector, from putting aside as much as they could and should;
– The recognized liabilities of many pension plans exceed their assets, and reported numbers often tell an incomplete story of post-retirement obligations;
– The benefit-accrual patterns of many defined-benefit plans distort work and retirement decisions;
– Limits on funding, and court decisions that have eroded plan sponsors’ claims on surpluses, have discouraged full funding of defined-benefit plans;
-While pension-plan sponsors outside the public sector are moving away from the traditional defined-benefit model, ready alternatives, such as individual and group RRSPs, confront many Canadians with choices about how to save and invest that they are ill equipped to make.

The C.D. Howe Institute’s pension program will hold seminars and produce a series of papers on these and other challenges. Its goals are to promote understanding of the pension system’s role in shaping saving and investment, outline changes that could improve its impact on Canadian prosperity, and develop proposals for improvement.

“Provision of retirement income involves key public policy questions,” said Robson. “How adeptly Canadians address them will influence future living standards through their effects on labour markets, on saving and investment, and on productivity growth.”