The current proposals for boosting the Canadian pension system need more input from the provinces, concludes a report released Thursday by the C.D. Howe Institute.
The report, “Saving Pooled Registered Pension Plans: It’s Up To the Provinces,” is co-authored by Keith Ambachtsheer, director of the Rotman International Centre for Pension Management, University of Toronto, and Edward Waitzer, a professor at Osgoode Hall Law School, director of the Hennick Centre for Business and Law at York University and a senior partner at Stikeman Elliott LLP.
The report says that the current proposals won’t meet the primary goal of the PRPP plan without further changes. Those changes should ensure that the majority of Canadians who lack a work-place pension have access to well-regulated, low-cost, private-sector capital accumulation pension plans.
Provinces, Ottawa partner toward introduction of PRPPs
The report argues that leadership from the provinces is required to boost the current PRPP proposals in three key areas:
1. Employers should be required to offer PRPPs to employers. The current plan makes employer participation voluntary, which the report says will result in minimal PRPP uptake.
2. There should be a well-designed default option. The current proposal is virtually silent on this point, the report says.
3. Sound fiduciary oversight of the program in the form of an independent PRPP licensing system should be added to ensure that participants are receiving “value for money.” The current bill leaves oversight to a cumbersome regulatory system that already exists, the report says.
Noted Waitzer: “Now it’s up to the provinces to inform the regulations with appropriate features.”