Last November I received a letter from a constituent that read:

“With the election over, the government and Members of Parliament are getting down to the most important issues facing Canadians.  The number one issue, most of us would agree, is the financial crisis facing Canada and the world.

The news reports and interviews that we see deal primarily with the liquidity for the banks.  But for many of us who are retired from the private sector, our pensions are our number one concern.  We know that our pension funds are heavily invested in both domestic and foreign markets which have declined precipitously.  If plans can be made to keep the banks and other financial institutions whole, surely a plan can be devised to guarantee that pensions will be protected as well.”

It is a concern shared by many as private sector companies adjust to the current economic conditions and it is only fair that Canadians have confidence that their pension plans will be there when they need them.

With this in mind, the Government of Canada is taking action to strengthen the private pension system in Canada and has initiated a consultation process on federally-regulated pension plans with a view to making permanent improvements to the framework.

On January 9, 2009, the Government of Canada released a discussion paper entitled, “Strengthening the Legislative and Regulatory Framework for Private Pension Plans Subject to the Pension Benefits Standards Act, 1985”.  The paper can be viewed on the Department of Finance website at www.fin.gc.ca/n08/09-005-eng.asp

Canadians are welcome to share their views on this issue, and may make on-line submissions to pensions@fin.gc.ca until midnight, March 16, 2009.  Individuals may also use this address to express their interest in presenting at one of the public consultation meetings. 

Constituents should also be aware that a public meeting chaired by Parliamentary Secretary to the Minister of Finance, Ted Menzies, M.P., will be held in Vancouver on April 14th, at the Westin Bayshore, 1601 Bayshore Drive, in the Cypress Room from 9:00 a.m. – 11:30 a.m.

Canada has a three-pillar retirement income system.

The first pillar is the Old Age Security and Guaranteed Income Supplement programs which provide a basic, minimum income guarantee for seniors who meet residence requirements.

The second pillar is the Canada and Quebec Pension Plans which ensure a basic level of earnings replacement in retirement for all workers in Canada.

Both of these public pillars of the retirement income system are strong. The Old Age Security and Guaranteed Income Supplement programs are funded out of general tax revenues, and are thus supported by the strong fiscal position of the government. Recent estimates by the Chief Actuary show that the Canada Pension Plan is expected to be sustainable at current contribution rates for at least the next 75 years.

The third pillar, voluntary tax-deferred savings in Registered Pension Plans (RPPs) and Registered Retirement Savings Plans (RRSPs), is a key component of the retirement income system and provides almost $40 billion in annual income to those aged 65 and older, representing 44 per cent of retirement income system payments received by seniors.

It is this pillar which the consultations will address.

The objective of the consultations is to seek views on the most appropriate means of enhancing the legislative and regulatory framework for registered pension plans subject to the Pension Benefits Standards Act, 1985 (the Act) to ensure retirement income security is there for Canadians.

Canada’s retirement income system is internationally recognized for its adequacy, affordability and sustainability and we want to keep it that way.

Ron Cannan is the Member of Parliament for Kelowna-Lake Country.  If you wish to contact him please call 470-5075 or e-mail him at ron@cannan.ca.