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“Future-Proofing” Canada’s Retirement Income System

April 1, 2010

IFIC makes four recommendations in its response to B.C. Consultation Paper

Toronto, Ontario – In an April 1, 2010 letter to B.C. Finance Minister Colin Hansen, The Investment Funds Institute of Canada, the voice of Canada’s investment funds industry, offered four suggestions to prepare Canada’s retirement income system for the future. Canada’s three-part retirement income system consists of a first Pillar – Old Age Security (OAS) / Guaranteed Income supplement (GIS) / provincial income supports; second Pillar – the Canada and Quebec Pension Plans (CPP / QPP); and third Pillar – employer-sponsored/individual retirement savings plans and other savings options.

The first and second Pillars are reviewed regularly. The defined benefit and defined contribution plans of the voluntary-savings third Pillar have been examined in some detail in the last few years pointing to some clear improvements than can be made. In light of this helpful analysis Joanne De Laurentiis, IFIC’s President and CEO, said, “Now is the time to improve parts of the third Pillar to ensure parity in the ability of all Canadians to save for retirement.”

To help “future-proof” Canada’s retirement income system and to allow Canadians to save for their retirement in an equivalent manner, whether they have an employer pension plan or not, IFIC makes four recommendations:

(1) Make it easier and more appealing for employers (particularly small-and medium-sized businesses) to establish retirement plans affordably and without liability

(2) Increase the number of Canadians that participate and save enough in employer or individual retirement savings plans through the introduction of automatic enrollment and contribution escalation features and financial education

(3) Ensuring that those with RRSPs enjoy the same tax benefits as those with standard defined benefit and defined contribution plans, including through increases in RRSP limits from 18% to 34% of earned income to achieve the average benefit value of the federal government employee plan benchmark

(4) Understand the value and significant advantages of Canadians’ access to financial advice when comparing all-in costs and benefits of features available within government-provided, employer-sponsored and individual retirement plans and other savings.

Concluded De Laurentiis, “Our specific proposals are targeted, cost-effective ways to remove complexity, uncertainty and regulatory costs faced by plan sponsors and plan participants, leaving more savings in the hands of Canadians. The improvements these initiatives will bring will strengthen our retirement system for the future”.

To read the full text, please click on the link below:

About IFIC

IFIC is the national association of the investment funds industry. Membership consists of mutual fund companies, retail distributors and industry affiliates.

About Mutual Funds

Mutual funds enable Canadians to (i) invest in capital markets while diversifying (reducing) risk, (ii) have their savings managed professionally and (iii) obtain expert financial advice to help them plan for and cope with important events in their lives (like having a baby, buying a home, being laid off, managing an elderly parent's financial affairs or receiving an inheritance). There are virtually no dollar barriers to starting a mutual fund account and some IFIC members offer savings programs for as little as $25/month.


For more information contact:
The Investment Funds Institute of Canada
Phone: 416-309-2317

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The Investment Funds Institute of Canada (IFIC)


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