Provinces show preference for pension reform, want to beef up CPP

The Canadian Press ~ The News
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OTTAWA - The provinces are highlighting two main options for reforming the country's pension system, hoping to rekindle public debate about how to better prepare for retirement.
B.C. Finance Minister Colin Hansen posted a previously confidential paper on Thursday that doesn't shut the door on any idea for reform, but says options based on beefing up the Canada Pension Plan are "the most promising options."
Specifically, the paper zeros in on adding a voluntary, supplementary tier on to the CPP, and on expanding the CPP outright into a richer but mandatory plan for everyone.
The federal and provincial governments have been in talks for months on how to make sure Canadians better save for retirement.
But at a key meeting in Whitehorse last month, they lost some momentum after a research paper - by economist Jack Mintz and commissioned by the governments - concluded that the pension system in Canada was in fairly decent shape.
The federal and provincial finance ministers committed to public consultations and a list of options in the next few months, but observers have wondered if the resolve for reform was evaporating.
The paper from Hansen, who chairs the provincial steering committee on pensions, contradicts the Mintz paper and argues that there is a serious problem. Pensions are adequate for now, the paper says, but they will fall short in the future.
Plus, the paper argues for a central role for governments in running the pension system. That's significant because Ottawa has spoken repeatedly about allowing the private sector leeway to come up with its own solutions.
"The evolving character of the retirement market points to a major role for governments," the paper argues.
Since retirement savings products are complex, and many retirees and savers don't have as much knowledge of the products as they should, "this suggests a role for governments in ensuring that individual interests are protected and that all Canadians have the opportunity to save for their retirement in a cost-effective and efficient manner."
The two key options - a supplementary tier to the CPP and an expanded CPP - could be blended, the paper concludes. And the private sector should be tapped for its expertise.

Geographic location: OTTAWA, Whitehorse, Canada

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