The financial security of seniors has important implications from a social and public policy perspective and the CMPA proposes a series of actions to help ensure financial well-being after retirement.
TORONTO, Nov. 24, 2022 (GLOBE NEWSWIRE) — Following the White Paper 2017 CMPA Decumulation, additional work has been done to determine what needs to be done to provide Canadian retirees with a comprehensive set of tools – a comprehensive solution they can customize to create financial security in retirement. To that end, the CMPA has released a new white paper: Decumulation 2.0: Converting Retirement Savings to Lifetime Income – A Prescription to Help Canadians Manage Their Retirement Income Needs.
The CMPA has identified actions to significantly advance securing the financial well-being of retirees, including:
- Create a dashboard that provides a clear and comprehensive picture of all individual retirement income sources: Canadians are currently unable to see all of their available sources of retirement income and the estimated aggregate income from all of these sources – government benefits, employment pensions and retirement income and individual savings. The CMPA recommends that a Canadian retirement dashboard be created using individual retirement information available from the federal government and the Canada Revenue Agency (CRA).
- Provide regulatory guidance on computerized retirement income modeling tools for CAP (Capital Accumulation Plan) members: The CMPA recommends that Canada’s pension plan regulators provide industry guidance that directs PAC sponsors and providers to make available to their members modeling tools with certain best practice attributes to help manage the disbursement of PACs and enable PAC members to develop retirement income investment plans with investment strategies for each portion of the participant’s income stream and risk tolerance.
- Providing Canadians with access to unbiased advice: The CMPA recommends that all jurisdictions in Canada put in place legislation defining regulated areas of practice and credentials for professionals working in the field of retirement and financial planning, as well as transparency on compensation.
- Make legislative changes to simplify the decumulation phase and enable effective decumulation solutions: Allow retirees of defined contribution pension plans to choose a common set of retirement standards rules to apply to all assets in their defined contribution pension plan account; relax certain unlocking rules and allow pension income splitting on retirement income received before age 65 from DC and certain other plans.
- Provide regulatory guidance on requirements for offering decumulation options: The CMPA recommends that regulatory guidelines on industry decumulation be developed to clarify how CAP plan sponsors and administrators can manage the tasks associated with offering group decumulation options (e.g., BV, Group LIF/RRIF, VPLA).
- Resurrect the PRPP as an effective disbursement vehicle: The CMPA recommends that legislative changes be made to the PRPP legislation to eliminate the employer participation requirement, allow the option of rollover-only PRPPs, and reduce the administrative burden and costs associated with PRPP.
Creating current and future generations of financially secure and independent retirees is an important Canadian policy goal. The CMPA believes that responding to the calls to action presented here will go a long way toward achieving this goal and looks forward to working with all interested stakeholders to advance these recommendations to continue building and improving Canada’s retirement income system. .
The CMPA (Association of Canadian Pension Administrators) is the leading advocate for a balanced, efficient and sustainable retirement income system in Canada and our members manage pension plans for millions of plan members.
For more information or to schedule an interview, please contact:
Lorianne Weston, Advocacy and Communications Manager, CMPA;
[email protected] | 416-964-1260 x225 | www.acpm.com
