Why supplementing CPP is unnecessary: IIAC

Leading up to the federal election in October, we may hear more about a voluntary supplement to CPP.

That’s because the government has stated it’s committed to helping Canadians save more for retirement, says the Investment Industry Association of Canada. The organization adds that, on July 13, 2015, the government opened a public consultation on options for a voluntary supplement to CPP.

However, the IIAC questions whether that kind of supplement is needed, given the saving options already available to investors. In a release, it says, “It may not even make sense [since] voluntary supplemental pension plans generally involve contributions to individual accounts, much like existing defined contribution plans [and] group RRSPs.”

And, “there are higher costs associated with implementing and maintaining a whole new administrative infrastructure (e.g. to track deposits and potentially withdrawals and transfers) that may outweigh the retirement savings benefit to Canadians.”

Instead, the IIAC says the government should make improvements to existing tax-assisted savings vehicles, including RRSPs and RRIFs, as well as focus on how to help groups that require additional pension support.

For more on the election, read:

Tories would up RRSP cash-out for new homebuyers

Which tax platform benefits your clients most?

Trudeau touts economic boost from infrastructure plan

Liberals promise lifelong pensions for injured veterans

Federal leaders debate whether Canada is in recession

And, for more saving for retirement, read:

Keep the claws off OAS

Some companies may be exempt from new Ontario pension rules

Younger Canadians failing to plan, save for retirement

10 questions to ask before your clients retire

Workers prefer RRSPs, TFSAs over CPP