PENSION REFORMS NEED TO IMPROVE COVERAGE FOR CANADIANS - ADVOCIS

REGULATORY BULLETIN

Advocis Releases Commissioned Report “Encouraging Small and Medium Sized Firms to Participate in Pension Plans”

Pension coverage, retirement income adequacy and the need for pension reforms have become urgent public policy issues. Advocis established in 2007 a Pension Task Force whose mandate is to promote a sound pension system, to help ensure plan sustainability from both an employer and employee perspective, and to stimulate higher levels of plan sponsorship.

Advocis strongly believes that a broad focus encompassing all types of retirement savings is required. The problems of defined benefit plans are only a small part of a larger picture. Public policy needs to not only focus on improving the pension regime for the small percentage of Canadian employees who have an existing pension plan but also on facilitating pension plan participation for those Canadian employees who do not currently participate in a pension plan and who need to save for their retirement.

In order to promote thoughtful and informed discussion of the public policy issues around increasing pension plan participation and promoting a sound pension system, earlier this year Advocis commissioned a study by Professors Morley Gunderson and Thomas Wilson. The study examined existing barriers to establishing and maintaining pension plans and incentives to encourage small- and medium-sized employers to participate in pension plans.

The report, which is called “Encouraging Small and Medium Sized Firms to Participate in Pension Plans”, confirms that the number of Canadian employees who are participating in any form of employer sponsored pension plan has been declining, that two-thirds of Canadian employees do not have an employer-sponsored pension plan and approximately two-thirds of Canadians will not have adequate income at retirement.

The report confirms that the most appropriate type of employer sponsored pension plan is a defined contribution pension plan, especially for small and medium sized business enterprises.

Advocis believes that the report provides important information and analysis and makes a valuable contribution to the public policy debate. The report will be used as a basis for future representations to governments as they reform pension plans in Canada.


Bulletin # 029-9/09
September, 2009
Advocis