The Canadian Press

The federal government is launching a series of cross-country meetings with Canadians to ask for public input on ways to improve the country’s pension system.

Finance Minister Jim Flaherty said he and his parliamentary secretary, Ted Menzies, will be staging town-hall meetings, expert roundtables, policy conferences and public online consultations aimed at involving a wide variety of Canadians in the discussion.

The future of Canada’s public and private pension systems has been widely debated in the last year because of widespread losses in many plans caused by the stock market collapse in 2008-2009.

Low interest rates have also led to large deficits in corporate plans, forcing many companies to top up their pension funds with millions of dollars in special payments to make them solvent again.

The fragility of some corporate plans and the failure of people to save adequately has raised fears that millions of Canadians will not have enough pension income to retire comfortably.

The federal government has already studied the viability of Canada’s pension system for more than a year and commissioned a report from economist Jack Mintz that concluded Canada does not have an immediate pension crisis, although he added some groups could be vulnerable in the future.

But some provinces see the problem as immediate and say that unless they act now, large portions of the population will not be able to maintain their standard of living when they retire.

British Columbia and Alberta have threatened to set up their own voluntary pension supplement unless Ottawa leads the way and produces a new national plan soon.

NDP Leader Jack Layton also called on the government to move on protecting Canadians’ pensions immediately, instead of launching another consultation process.

“For heaven’s sake, it’s time for action,” he said, noting that the House of Commons nine months earlier had voted on a series of measures, including beefing up old age security and the Canada Pension Plan, and protection for workers whose pensions are jeopardized because their companies have gone bankrupt.

The Canadian Life and Health Insurance Association welcomed the process announced by Flaherty, however, saying a “fulsome discussion and review are important.”

“The fact is that Canada has one of the best retirement savings systems in the world, but it needs updating and enhancement to improve access to savings vehicles by more Canadians,” said association president Frank Swedlove.

“There is significant untapped potential in the current system that can be unleashed through changes to current rules and regulations, particularly with respect to workplace-based retirement plans,” Swedlove added.

He said the association, whose members administer more than 70 per cent of pension plans for Canada’s small- and medium-sized businesses and the vast majority of group RRSPs, will soon submit a specific set of recommendations.

A similar view was expressed by the Canadian Bankers Association, which said it was concerned about the adequacy of the savings of Canadians in general and “retirement saving in particular.”

“The current retirement savings system is not broken: quite the opposite, it is a strong and well-functioning system, but it is in need of some improvements,” said the CBA’s president and CEO, Nancy Hughes Anthony.

“We encourage all stakeholders not to rush to a solution but to take the time to understand the issue in all its complexity,” she said.

Meanwhile, Flaherty said it was critical that governments proceed with caution because, he said, the current system is generally working well.

“This is an area if one makes changes, these are changes that are made for at least a generation if not longer, so it’s very important we exercise extreme prudence,” he explained. “One does not rush headlong into this, there are no back of the envelope quick answers to this.”

And he said every Canadian has a stake in getting the pension issue right.

“At the end of the day, if we have some Canadians who are not saving adequately for their retirement, then they are going to be looking to other Canadians to help them out,” he said.

Flaherty said the government will be looking at four key areas:

• Beefing up mandatory contributions to the CPP to improve benefits.

• Adding a voluntary supplement to the CPP, which the minister said would be difficult to administer.

• Streamlining and expanding the tax inducement system, such as RRSPs and the tax-free savings accounts, to encourage more individual savings.

@page_break@• Giving the private sector more leeway to manage huge retirement savings funds, especially for people who have no access to company-sponsored plans.

“All options are on the table,” Flaherty said.

The minister added he is hoping the findings will help achieve a consensus among Ottawa and the provinces in time for the upcoming ministers meeting in May, adding that it is “reasonable to expect we’ll have a direction and we’ll move forward this year.”

The government has planned town hall meetings for Charlottetown, Quebec City and Richmond, B.C. It will stage roundtable discussions with experts and stakeholders in St. John’s, N.L., Winnipeg and London, Ont.

As well, both the House and Senate finance and banking committees are studying pension reform.