Any benefits from small cuts in the GST or income tax will be minimal compared to the financial problems many Canadians will face if Canada’s employer-sponsored pension plans keep shrinking, according to a statement issued today from the Canadian Institute of Actuaries (CIA).

“Political parties need to tell Canadians where they stand on this issue of reduced financial security faced by people hoping for a secure retirement,” said Charles McLeod, president of the CIA, in a release.

“The Institute calls on the country’s federal political leaders to offer their views during this election campaign and to join in a national pension reform summit next year to help safeguard a threatened system,” McLeod said. “It is not too late but it is urgent.”

The CIA noted that he number of private sector Defined Benefit (DB) pension plans is shrinking rapidly.

“The percentage of private sector workers participating in DB plans is down to 21% from 29% in 1992. If this decline continues unabated, in a few years the only working Canadians with a DB plan will be government employees, and that isn’t a good message to send to voters,” said Normand Gendron, the CIA president-elect.

The CIA said that DB and Defined Contribution plans, along with sound public pensions, government income support, registered retirement savings plans and personal savings are required for a healthy national pension system.

There is no “quick fix” for the issues involved in improving the private sector employer pension plan system. There are many inter-related options that should be considered, according to Gendron, including:

  • Promoting greater benefit security by equitably addressing the plan surplus ownership issue.
  • Removing regulatory obstructions and better coordinating of pension standards legislation across Canadian jurisdictions.
  • Providing more meaningful information to plan members on the financial position of their plans, funding decisions and contribution holidays.
  • Permitting plan funding substitutes such as letters of credit.

To address these issues the CIA “proposes to organize and host a nation-wide forum that engages all pension stakeholders around the table.”