CANADA - The Association of Canadian Pension Management (ACPM) has applauded the government's decision to allow temporary solvency funding relief measures for federally-regulated DB plans, but stressed it had just begun to deal with the challenges facing such plans.
Finance minister Jim Flaherty announced in his first Budget changes that would help federally regulated pension plans deal with solvency deficits by extending the period over which those shortfalls had to be funded, subject to the consent of plan beneficiaries, and by allowing for the use of letters of credit to assist with such funding. The ACPM described the move as the “initial steps towards dealing with the funding crisis”.
ACPM president Scott Perkin said he hoped the announcement would encourage provinces that had yet to deal with pension funding issues “in any meaningful way” to take action as well.
“The sooner governments deal with these critical issues, the sooner we might hope to witness improved funding of DB pension plans, and enhanced benefit security for members and pensioners, he said.
Yesterday's Budget also proposed an increase to the income tax deduction available to pensioners, from C$1000 to $2000 starting this year, but Perkin stressed more needed to be done to secure the future of retirement savings in Canada.
“There were no increases to the pension and RRSP limits which are necessary to ensure that Canadians are allowed to save adequately for retirement,” he said. “The current levels for tax-assisted retirement savings here in Canada still lag far behind those in the US and the UK.”
Perkin has only recently stepped into the role of president, following the retirement of Stephen Bigsby, previously executive director, in late January this year.
The ACPM has also undertaken a campaign to ensure an increased and more stable financial structure, bringing in a consultant to achieve those aims.
“What we want to do is get a base of institutional or corporate members who are willing to make a financial commitment on an annual basis to help support the advocacy work we do,” Perkin said.
Until now, the ACPM has relied on individual membership.
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