Only days from December 20th when pension ministers will tackle the pension reform question again, Ambachtsheer says the greatest gift the country’s First Ministers could bestow on Canadians is focus and clarity.
For example, he queries which of the following three goals guides their pension reform efforts:
1. Provide all Canadians with a good pension when they retire.
2. Solve some specific problems in Canada’s current pension system.
3. Facilitate market-driven solutions to retirement income provision.
Achieving any one of these goals requires a different strategy than the other two. For example, Goal 1 is best achieved through mandatory participation by all workers in a major expansion of the Canada/Quebec Pension Plans. In contrast, Goal 3 only requires bringing Canada’s pension rules and regulations into the 21st Century.
While they have not directly said so, the Ministers seem to be moving to Goal 2: solve a limited number of well-documented pension system problems. Why? Because these problems are accepted as real, and because the Ministers believe sufficient consensus can be built on how to solve them.
Specifically, two problems seem to be foremost in their minds:
1. Some four million private sector workers do not have a workplace pension plan and many will experience significant declines in their living standards as they retire in the decades ahead;
2. Many pension rules and regulations have outlived their usefulness and must be updated and harmonized across Canada.
If these are the problems the Ministers want to solve, Ambachtsheer says now is the time to explicitly say so. Such a statement would set the stage for designing targeted solutions for each of them.