Media Release
Government must act on looming retirement income crisis: HOOPP
84% concerned about inadequate retirement income, 91% favour multi-employer pension plans
With new research showing overwhelming public concern about Canada’s looming retirement income crisis, the government must act now to enable multi-employer defined benefit plans, says John Crocker, President & CEO of the Healthcare of Ontario Pension Plan. He spoke at the Conference Board of Canada’s Pension Summit in Toronto.
“I worry that as a country we are undoing decades of success at raising the standard of living for retired people and shrinking the scourge of elder poverty,” Crocker said. “That’s why I’m calling on government to show leadership by encouraging the development of multi-employer pension plans for Canadians.”
New research carried out for HOOPP by the Gandalf Group shows that 84 per cent of Ontarians are concerned about not having enough money for retirement. 86 per cent believe there is an emerging retirement income crisis in Canada, and a majority (58 per cent) believe it is principally the role of government - not individuals - to ensure Canadians have adequate incomes in retirement. 91% support HOOPP’s call for new multi-employer pension plans.
Crocker called on all governments to take action to “get the rules right,” and to take leadership in forming new sectoral plans. Without corrective action now, he warns, the risk of elder poverty will grow as the baby boomers retire.
Crocker says regulatory barriers, such as accounting and surplus rules, make it hard for a single employer to fund a defined benefit plan. But there’s strength in numbers, he notes. If multi-employer DB pension plans were formed to serve various sectors of the economy, “no longer would the full weight of funding be on one set of corporate shoulders.”
Defined benefit pension plans typically provide retirees with pensions equal to about 67 per cent of their pre-retirement income. Other retirement savings vehicles typically generate only about 20 per cent of the individual’s pre-retirement income.
“Together, we need to fix our pension system so that it looks after the retirement income needs of our citizens. If we focus on the right issue – adequacy – we can build a sustainable retirement system that makes sound business sense, we can meet the critical goal of allowing Canadians to retire with dignity and independence,” says Crocker.
