Ignatieff to call for pension plan reform

Posted on December 8, 2009 in Debates, Governance Debates, Social Security Debates

TheGlobeandMail.com – ROB – Ignatieff to call for pension plan reform: Liberal Leader to propose ‘supplementary’ version of Canadian Pension Plan to allow Canadians to top up retirement savings
Published on Dec. 07, 2009. Last updated on Dec. 08, 2009.   Ottawa — Bill Curry

Liberal Leader Michael Ignatieff wants Canadians to be able to top up their individual retirement savings through the Canada Pension Plan, a move that would radically reshape the long-trusted national retirement fund.

Mr. Ignatieff is expected to call Tuesday for reforms that would allow individuals to invest cash in a “supplementary” version of the CPP.

According to sources, the idea will be pitched as a measure that will appeal to the millions of Canadians who do not have a company pension and are leery of registered retirement savings plans.

“This could be a very popular way to invest,” said a Liberal source familiar with the proposal.

The idea is sure to give the pension issue some added political profile in advance of this month’s so-called pension summit in Whitehorse. The informal “summit” title has been slapped on the regular meeting between Finance Minister Jim Flaherty and his provincial and territorial counterparts, scheduled for Dec. 17-18, because they will receive the findings of an independent study they had requested on pension reform.

That report will be written by University of Calgary economist Jack Mintz.

Mr. Mintz will be preparing his report on the advice of finance ministers from British Columbia, Alberta, Manitoba, Ontario and Nova Scotia.

Mr. Ignatieff scheduled a news conference for Tuesday in which he will say two key holes remain in the Conservative government’s approach to pension reform.

Sources say the Liberal Leader will highlight the fact that no new measures have been announced that would help the millions of Canadians whose employers do not provide a company pension.

On that point, he will urge the government to find a way for individuals to gain access to the CPP so they can voluntarily top up their own retirement savings.

Secondly, Mr. Ignatieff will call for new measures aimed at protecting the company pensions of workers when a business goes bankrupt. It is not clear whether this would also involve the Canada Pension Plan, or whether it would require a new federal agency to manage those pension funds.

Mr. Ignatieff will be joined at the news conference by Liberal MP Judy Sgro, who has studied the pension file, and party finance critic John McCallum.

In October, the government announced new measures to prevent companies from taking “contribution holidays” unless their pension funds are running a surplus of 5 per cent or more. The measures apply only to federally regulated pension programs, which cover about 7 per cent of Canadian plans.

Mr. Flaherty’s office points out that the government could not go further without the support of the provinces – which regulate the other 93 per cent – and that is why the special study was commissioned.

“We recognize the importance of these pension issues and at the May meeting of federal-provincial-territorial finance ministers, all parties agreed to form a research working group to study pension issues,” said Chisholm Pothier, Mr. Flaherty’s director of communications. “We look forward to receiving the report and will consider where to go from there once we have received it.”

Mr. Ignatieff’s pension proposals will come a day after the Liberals hosted a day-long summit on Parliament Hill focused on trade policy. The party leader recently overhauled his Ottawa staff and is putting more focus on policy issues.

However, his political rivals will likely paint him as a latecomer to the pension debate. Pensions have long been a dominant issue for the New Democrats in the House of Commons, while Mr. Flaherty has unveiled several pension reforms of late.

With files from Jacquie McNish and Janet McFarland

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