The Investment Industry Association of Canada (IIAC) believes that most Canadians are saving enough for their retirement, and that a voluntary supplement to the Canada Pension Plan (CPP) is unnecessary.
In its submission to the federal government's public consultation on options for a voluntary supplement to the CPP, the IIAC points to research conducted by McKinsey and the C. D. Howe Institute which suggests that most Canadians are already on track to retire comfortably. The IIAC notes that most lower income earners will have nearly all of their income replaced under the existing system thanks to Old Age Security (OAS) and the Guaranteed Income Supplement (GIS), while the wealthy will have saved enough on their own.
The IIAC argues that any assessment of retirement income adequacy should also consider other kinds of assets typically held by individuals, such as real estate and non-registered funds. "It is likely that the savings ‘gap’ is much more narrow than previously thought, requiring a tailored solution to meet the needs of affected individuals," says the IIAC.
Instead of introducing a new, voluntary supplemental pension plan which will require a separate administrative infrastructure to track deposits and potentially withdrawals and transfers, the IIAC would rather that the government simply improve existing tax-assisted savings vehicles.