The Canadian Institute of Actuaries (CIA), a national organization of actuarial professionals, has released a report on pension reform in Canada entitled “Retooling Canada’s Ailing Pension System Now, for the Future: Canada’s Actuaries Advocate Change.” This report repeats many of the recommendations made in the CIA’s 2007 report entitled “Canadian Institute of Actuaries’ Prescription for Canada’s Ailing Pension System.”
The CIA’s latest report contains the following ten recommendations for pension reform:
- Put pensions on the national agenda to create an environment that maintains and strengthens pension plans.
- Develop a principles-based approach to regulating pension plans.
- Identify and remove disincentives to working later in life. Allow Canadians to work part-time in retirement and collect partial retirement benefits.
- Provide Canadians with better information, earlier, to help them understand and manage the risks associated with retirement.
- Allow employers to set up pension security trusts separate from regular defined benefit pension plan funds.
- Require defined benefit plans to build up a target solvency margin.
- Establish a task force to determine the appropriate levels of solvency margins.
- Reform tax rules to allow plan sponsors to build larger surpluses.
- Protect pension benefits by treating them like unpaid salaries in bankruptcy proceedings.
- Reform legislation to assist in the determination of benefits when a plan of a bankrupt employer is wound up.
The CIA report adds to the momentum for pension reform and it is likely to be taken into account during the meeting of federal, provincial and territorial finance ministers in December.