- Retirement system needs drastic makeover, says CGA-Canada report -
VANCOUVER, April 30 /CNW/ - A new report released today by the Certified General Accountants Association of Canada (CGA-Canada) reveals a disturbing 92% of private sector defined benefit pension (DB) plans are in a deficit position, a number which has more than doubled over a five-year period. Pension funding deficits have climbed from $160 billion in 2003 to an estimated $350 billion in 2008 and continue to grow.
Gauging the Path of Private Canadian Pensions: 2010 Update on the State of Defined Benefit and Defined Contribution Pension Plans is available at: http://my.texterity.com/cgaresearchreports/pensions2010
"Pension plans should not be allowed to metamorphose into empires of debt," says Anthony Ariganello, President and CEO of CGA-Canada. "The recent events with national companies such as Nortel Networks, AbitibiBowater, Fraser Papers and CanWest have highlighted a need to better preserve pension plan solvency and improve member protection."
The Canadian retirement system should afford greater protection and unsustainable DB pension plans and inadequate defined contribution (DC) pension plans should be replaced with hybrid models that draw upon the best elements of each.
"Canadians ability to maintain a financially comfortable and healthy lifestyle is bleak unless the retirement system undergoes a drastic makeover," says Rock Lefebvre, Vice-President of Research and Standards at CGA-Canada. "Pension plans should not operate in a manner that unduly borrows from future generations to pay the present one."
The report also reveals problems with the taxation system. Lefebvre points out that current tax rules prejudice Canadians without employer-sponsored plans. Even if registered retirement savings plan (RRSP) limits are reached, these Canadians cannot save as much for their retirement as Canadians who have employer-sponsored pension arrangements.
To remedy this, CGA-Canada supports Canadians having equal opportunity to build retirement income outside of pre-existing plans. CGA-Canada recommends the development of a new pension system that is sustainable, simple to administer and cost effective - that harmonizes the efforts of federal and provincial stakeholders, recognizes pension benefits as deferred compensation and above all, is fair to all Canadians both now and in the future.
Founded in 1908, the Certified General Accountants Association of Canada serves 73,000 Certified General Accountants and students in Canada and more than 80 countries. Respected accounting and financial management professionals, CGAs work in industry, finance, government and public practice. CGA-Canada establishes the designation's certification requirements and professional standards, offers professional development, conducts research and advocacy, and represents CGAs nationally and internationally.
For further information: For further information: or to request an interview, please contact: Taylore Ashlie, Director, Communications, CGA-Canada, Cellular: (604) 307-0212, Email: firstname.lastname@example.org; Diana Sorace, Communications Advisor, CGA-Canada, Telephone: (604) 694-6700, Email: email@example.com