MP Allen Seeks Input On Pensions and Retirement Income

April 20, 2010

TOBIQUE-MACTAQUAC – Mike Allen, Member of Parliament for Tobique-Mactaquac, encourages local residents to have their say on how best to ensure the ongoing strength of Canada’s retirement income system.

The input, part of the Conservative government’s cross-country consultation process, will go directly to Finance Minister Jim Flaherty, who will continue work on retirement income and pension issues at the next meeting of federal, provincial and territorial finance ministers, said Mr. Allen.

“I have heard loud and clear from my constituents that retirement and pension issues are top of mind for them, and will be for years to come,” said the Chair of the Atlantic Conservative Caucus. “We have a strong system in Canada, but we can work to make it stronger if we listen to the concerns that people have, and take smart and effective steps to deal with them.”

Mr. Allen encourages interested constituents to participate in the online consultations through the following link to the Department of Finance Website: www.fin.gc.ca/activty/consult/retirement-eng.asp. The deadline for submissions is Friday, April 30.

As well, individuals can drop their submissions off at constituency offices in Grand Falls, Woodstock and Keswick by the deadline date, and staff will ensure the Department of Finance receives them.

Submissions should focus on alternatives or enhancements to the system which is now in place. Canada's government-supported retirement income system is based on three pillars:

1. The Old Age Security and Guaranteed Income Supplement program provides a basic minimum income guarantee for seniors, funded out of federal government revenues.
2. The Canada Pension Plan is a mandatory, publicly-administered, defined benefit pension plan that provides a basic level of earnings replacement for all Canadian workers, funded by employer and employee contributions.
3. Registered Pension Plans (RPPs) and Registered Retirement Savings Plans (RRSPs) / Registered Retirement Income Funds (RRIFs) provide tax-assisted savings opportunities to encourage Canadians to accumulate additional savings for retirement.

Canada is recognized internationally as having among the strongest retirement income systems in the world. The strengths of the system are based on its:

• long-term sustainability
• balanced mix of mandatory and voluntary pillars, and
• shared public and private responsibilities.

This system has resulted in Canada having a very low rate of poverty among seniors, high rates of replacement income among current seniors and most Canadians saving enough to achieve relatively high rates of income replacement in retirement.

Recently, however, there have been questions and concerns raised about the adequacy of future retirement incomes for some members of the population. These concerns have received particular attention in light of the financial market downturn in 2008. Moreover, other emerging issues, such as longer life expectancies and declining private pension plan coverage have also raised questions about the future of Canada's retirement income system.

More information on the pension system, as well as questions for consideration can be obtained through Mr. Allen’s constituency offices.

“Our Conservative government has a strong record of helping seniors,” said MP Allen.  “We’ve reduced taxes, introduced pension income splitting and developed innovative new ways for all Canadians to save, like the Tax-Free Savings Account. We need to build on this strong record, and work with our partners in the provinces, to make the right choices on our retirement income system, in order to make it stronger and more sustainable.”

Interested constituents are invited to contact Mike Allen’s office at 1-800-671-6160 or email allenm@parl.gc.ca for more information.

Besides holding public consultations at various locations across Canada, the Minister of Finance has asked the Senate Standing Committee on Banking, Trade and Commerce and the House of Commons Standing Committee on Finance to help inform the Government’s efforts through their own studies of the government-supported retirement income system.