Claude Lamoureux calls for National Pension Reform Summit
TORONTO, June 3 /CNW Telbec/ - Canada needs a national summit to reform
our retirement savings system, according to the retired Chief Executive
Officer of one of Canada's largest pension plans, Claude Lamoureux.
Addressing the Economic Club of Toronto in his first speech as Special
Advisor to the Canadian Institute of Actuaries, Lamoureux called on the
federal Finance Minister to convene a national meeting of ministers
responsible for pensions in November 2008. The summit would address a range of
pension issues, including the steady decline of defined benefit pension plans.
"One-third of working Canadians have no retirement savings at all. A good
many of the other two-thirds are not saving enough to fund an independent
retirement. Yet despite their many advantages as a retirement savings vehicle
for Canadians, defined benefit plans continue to decline while governments
stand by watching them disappear," said Lamoureux, who recently retired as
President and CEO of the Ontario Teachers' Pension Plan.
"I am deeply concerned that eventually Canadians will no longer have
access to defined benefit pension plans. This would be a terrible loss of an
attractive, efficient and reliable retirement savings vehicle and an important
pillar of Canada's pension system," Lamoureux added.
In his remarks, Lamoureux listed the advantages of defined benefit plans
compared with the other common workplace pension vehicle, defined contribution
plans. "Defined benefit plans," said Lamoureux, "provide greater
predictability to plan members, help to attract and retain employees for plan
sponsors, and deliver better investment returns. They also offer a stable pool
of capital to finance long-term investment projects that bring social and
economic benefits for Canadians."
Lamoureux expressed his support for three proposals made by the Canadian
Institute of Actuaries to help turn around the decline of defined benefit
1. Pass legislation to allow the establishment of pension security
trusts fully funded by the plan sponsor. Contributions to the
trust would be separate from, but complementary to, regular plan
funds. Trust surpluses not needed to meet pension commitments
could be returned to the plan sponsor.
2. Pass legislation requiring defined benefit pension plans to set
a target solvency margin. Contribution holidays would be allowed
only if the plan's surplus exceeded the target solvency margin.
3. Change federal tax laws to allow plan sponsors to develop
surpluses much greater than the current 10 percent limit. This
change would improve the security of benefits for plan members.
Noting that currently only four finance ministers in Canada have
responsibility for pensions, Lamoureux urged that ministers responsible for
pensions begin to harmonize their efforts and start a dialogue on developing a
national agenda for pension reform.
In calling on federal Finance Minister Jim Flaherty to launch a national
pension reform summit, Lamoureux offered the support and assistance of the
Canadian Institute of Actuaries in organizing the summit.
"While there are no quick fixes for Canada's pension system, clearly it's
time for governments to act decisively and start working together to bring
about much needed reforms," Lamoureux said. "A national Pension Reform Summit
is the first step along this road, one leading to a healthier retirement
savings system and a brighter financial future for all Canadians."
To summarize, Mr. Lamoureux delivered four basic messages:
1. People who are interested in pension reform should work together;
2. All governments should work together;
3. Employers won't play in a game where they own the deficits, but can't
share the surpluses; and
4. Both defined benefit and defined contribution plans need to be made
The Canadian Institute of Actuaries is the national organization of the
actuarial profession. Member driven, the Institute is dedicated to serving the
public through the provision, by the profession, of actuarial services and
advice of the highest quality. In fact, the Institute holds the duty of the
profession to the public above the needs of the profession and its members.
Actuaries employ their specialized knowledge of the mathematics of finance,
statistics and risk theory on problems faced by pension plans, government
regulators, insurance companies (both Life and Property/Casualty), social
programs and individuals.
For a copy of the Institute's Pension Prescription, visit
For further information:
For further information: and media interviews: Josée Racette, (613)