Finance Minister Jim Flaherty gives an interview in Ottawa on Monday, Dec. 21, 2009.
Finance Minister Jim Flaherty will ask Canadians how best to reform the country's pension system.
Mr. Flaherty has announced plans for a string of town-hall meetings, expert roundtables, policy conferences and public online consultations aimed involving a wide variety of Canadians in the discussion.
Ottawa wants to sound out public opinion on the state of retirement income in time for a federal-provincial meeting in May, where finance ministers hope to narrow a wide range of reform options.
Mr. Flaherty says the retirement income system is complex and the challenges it faces "do not lend themselves to one-size-fits-all solutions scribbled on the back of a napkin."
He says retirement savings issues are too important for governments to "meddle blindly or rashly" and changes could carry unanticipated consequences.
Concern about retirement income has soared recently, in part because savings took a big hit with the downturn in financial markets last year, but also because fewer and fewer companies are offering defined-benefit plans.
For now, the pension-reform options include:
Beefing up mandatory contributions to the Canada Pension Plan so that its benefits can be more generous.
Adding a voluntary supplement to the CPP so that contributors can choose to take advantage of its low management fees and solid reputation, and increase benefits after they retire.
Streamlining the current system of savings so that all types of retirement savings get beneficial tax treatment.
Giving the private sector more leeway to manage huge retirement savings funds, especially for people who have no access to company-sponsored plans.
Better educating the public so people are more aware of their savings options.
Some provinces believe that unless they act now, large portions of the population will not be able to maintain their standard of living when they retire. British Columbia and Alberta have threatened to set up their own voluntary pension supplement unless Ottawa leads the way and produces a new national plan soon.
But other provinces, and some experts, are not as convinced that the problem is urgent. And some feel that individuals, and not the government, have the responsibility to save for their own retirement.
Until now, the federal government has preferred to tinker with pension rules and study the pension adequacy situation, rather than take action.
"There is simply too much at stake for ill-considered action," Flaherty told a news conference. "Canadians work hard to realize their retirement dreams.
"Our government will be giving Canadians an unprecedented opportunity to have direct input on the future security and soundness of Canada's retirement-income system."