Nov. 11, 2011 – One of the fundamental strengths of a defined benefit pension plan is the security it provides in knowing how much one will have at retirement.
But with DB plans under threat, Canadians will find that security harder to come by as they are required to rely on defined contribution plans, encumbered by current tax rules that make it difficult to match the success and reliability of traditional defined benefit pension plans.
An article in Benefits Canada paints an alarming picture of a retirement scene where workers have not been able to put enough away for retirement using the DC model, in part because tax rules don’t allow them to save enough.
It’s a situation that will only worsen as Canada’s workforce ages, leaving less time to save for retirement and a gap between those with a DB pension and those without.
James Pierlot with Faisal Siddiqi write that reform is urgently needed, replacing the current pension and RRSP limits with a lifetime accumulation limit to give everyone the opportunity to build a good pension.
Read their story here.
