Feds, provinces must synchronize pension reform

Management association fears regulations, laws will have negative impact on savings, pension plans

Federal and provincial governments should synchronize their individual pension reform efforts so they do not work at cross-purposes that negatively impact Canadian investors, according to the Portfolio Management Association of Canada (PMAC).

"In light of the looming demographic reality of an aging population and the economic events in the last decade that have detrimentally impacted the funding status of many pension plans and the asset base of retirement savings generally, it is incumbent upon government to ensure that new government policies do not diminish or curtail future saving," said Katie Walmsley, president of the newly named association of 140 portfolio management companies that represent a significant portion of the $2.4 trillion Canadian investment management sector.

PMAC is actively promoting and encouraging an expansion in the retirement savings regime for many Canadians who are self-employed or working in an industry without a formal pension plan. PMAC is also supportive of a national solution to this issue, necessitating a synchronized approach by federal and provincial governments.

The association is optimistic the provinces and the federal government can work together to stop the patchwork approach that is at cross-purposes with the shared goals of pension reform. However, it is concerned the focus is on reforming pension-specific regulation and income tax laws that inadvertently impact retirement savings and pension plans are being overlooked.

Understanding the complexities of the issue is imperative to a resolution, said Walmsley.

"Several provincial governments want input on how to handle the huge need for retirement savings but many of the acts, including the Pension Benefits Standards Act and the Income Tax Act, are the domain of federal jurisdiction. We understand there are a lot of departments, parties and stakeholders that have a vested interest in this issue and we are simply — and strongly — advocating for the left hand to know what the right hand is doing."

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