Could there be a better gift for the financial services industry than a vaguely worded pledge to undertake “major transformations” of the retirement income system in the midst of RRSP season? If that doesn’t spur people to start saving more for themselves, nothing will.

Prime Minister Stephen Harper’s pledge to make the changes necessary to put the retirement income system on a more sustainable footing should come as music to the ears of those working for financial services firms everywhere. Although Harper didn’t reveal any details of his plans in his speech to the World Economic Forum in Davos, Switzerland, his pledge to put the old-age security system on a more sustainable path probably means curbing benefits in the face of a swelling retirement-age population.

That sort of promise, and the fear it will generate, represents priceless, free advertising for financial services firms during RRSP season.

But whether this pledge results in good public policy is a much bigger, more important question. The record of the Harper government on retirement income system reform is not good. So far, his government’s considerable study and deliberation over the inadequacy of retirement income savings has led to the creation of the new pooled registered pension plan vehicle, which doesn’t look likely to do much to improve savings.

If the PRPP was the best that the government could come up with to solve the savings shortage, it seems unlikely that the feds are going to ensure that there are ways to replace reduced retirement benefits.

Although it would be nice to believe that rational self-interest would take care of the shortfall, all evidence suggests people don’t behave that way. Rather, it is governments alone that are in a position to devise programs to encourage people to make sound, long-term choices. Simply cutting benefits appears sure to make the retirement savings situation worse.

If raising the retirement age is the plan, that’s a debate worth having. But, again, that shouldn’t occur in isolation without a plan to increase Canadians’ provisioning for retirement as well. For now, Harper may have frightened some people into saving more; however, sensible reform of the retirement income system needs a better plan than that.