Association of Canadian Pension Management sets out six key actions to improve financial outcomes for older Canadians
A new white paper sets out some key actions that should be taken to boost the financial wellness of Canadians in retirement.
The report from the Association of Canadian Pension Management (ACPM) builds on a 2017 report which highlighted a growing share of Canadians who will retire without a defined benefit pension.
The new report is called Decumulation 2.0: Converting Retirement Savings to Lifetime Income – A Prescription to Help Canadians Navigate their Retirement Income Needs.
In it, ACPM sets out measures that it believes will “significantly assist in achieving [the] objective” of “creating current and future generations of financially secure and independent retirees.” It notes that this is an important Canadian policy objective.
The calls to action include creating a comprehensive dashboard of all individual retirement income sources including government benefits, employment-based pensions and retirement income and individual savings.
This would enable Canadians to compare all available sources of retirement income and their estimated aggregate income, using information from the Federal government and Canada Revenue Agency.
The second proposal is computer-based modelling tools to help capital accumulation plan sponsors to provide guidance to members to assist them with managing CAP decumulation and allow for CAP members to develop retirement income investment plans with investment strategies for each portion of the member’s stream of income and their risk tolerance.
ACPM also wants all jurisdictions within Canada to regulate areas of practice and titles for professionals working in retirement and financial planning. It is also calling for transparency on compensation.
The fourth proposal is to permit Defined Contribution pension plan retirees to elect a common set of pension standards rules to apply to all their DC pension plan account assets; relax certain unlocking rules and permit pension income splitting on retirement income received prior to age 65 from DC and certain other plans.
Fifth, is to develop industry decumulation regulatory guidelines to clarify how CAP plan sponsors and administrators can manage duties associated with offering group decumulation options.
Finally, the ACPM is calling for changes to PRPP legislation to eliminate the requirement for employer participation, allow for the possibility of decumulation-only PRPPs, and reduce the administrative burden and costs associated with PRPPs.
The association says it hopes to work with industry stakeholders to continue to build and improve the Canadian retirement income system.