TORONTO, May 6 /CNW/ - Canada's Chartered Accountants believe it is prudent for the federal government to more closely examine the country's retirement income system even though it is recognized as one of the best in the world.
The Canadian Institute of Chartered Accountants (CICA) recently made a submission as part of the federal government's consultation on "Ensuring the Ongoing Strength of Canada's Retirement Income System".
"The economic downturn had a dramatic impact on the pensions and retirement savings of many Canadians," said Kevin Dancey, FCA, president and CEO, CICA. "While economic conditions affect retirement income, personal decisions also play a role. It is important to determine whether or not certain segments of the population are saving adequately for their retirement. If the answer is no, more research is likely needed into behaviours and incentives to learn the reasons why."
The CICA believes that opportunities to improve the current system can be found should it be determined that Canadians are failing to save enough for their retirement. Reforms that would merit consideration include:
- Reducing or eliminating the income tax on personal savings -
increasing the contribution limits for Tax Free Savings Accounts and
Registered Retirement Savings Plans (RRSP) would be a step in this
- Modifying RRSP and Registered Retirement Income Fund rules to allow
greater tax deferrals on retirement savings
- Developing savings incentives, perhaps through enhanced credits, to
encourage younger Canadians to start saving earlier
Another proposal raised in the CICA submission is allowing non-working spouses to contribute to the Canadian Pension Plan or Quebec Pension Plan.
"We also believe that the government should review the regulatory framework governing pensions plans to ensure it does not unnecessarily inhibit innovation in the private sector market," added Dancey.
Attitudes and knowledge about financial issues vary across different segments of the Canadian population. The CICA submission underscores the need for individuals to have the financial skills, knowledge and confidence to make the best decisions when planning for their retirement. The CICA supports the efforts of the federal government's Task Force on Financial Literacy.
The CICA submission is available on-line (http://www.cica.ca/about-the-profession/cica/government-relations/item38211.pdf). The submission builds on the CICA's participation in a stakeholder roundtable event in London, Ontario and the recent Calgary Summit on Retirement Income.
"It is important to further examine the issue of retirement income before specific reforms are undertaken," said Dancey. "We applaud the government for its consultation effort. Addressing issues today may help prevent many Canadians from facing a bitter future."
The Canadian Institute of Chartered Accountants (CICA), together with the provincial, territorial and Bermuda Institutes/Ordre of Chartered Accountants, represents a membership of approximately 75,000 CAs and 12,000 students in Canada and Bermuda. The CICA conducts research into current business issues and supports the setting of accounting, auditing and assurance standards for business, not-for-profit organizations and government. It issues guidance on control and governance, publishes professional literature, develops continuing education programs and represents the CA profession nationally and internationally. CICA is a founding member of the International Federation of Accountants (IFAC) and the Global Accounting Alliance (GAA).
SOURCE Canadian Institute of Chartered Accountants
For further information: For further information: or to arrange an interview, contact: Tobin Lambie, Manager, Media, CICA, (416) 204-3228, firstname.lastname@example.org, www.cica.ca