On July 13, the federal government opened a public consultation on options for a voluntary supplement to the CPP. While a number of recent studies have concluded that most working-age Canadians are on track to maintain their standard of living in retirement, the government said it is committed to exploring ways to give Canadians more choice in how they save.

Given the number of savings options already available in Canada, it is not clear that a voluntary CPP supplement is needed.

It may not even make sense. Voluntary supplemental pension plans generally involve contributions to individual accounts, much like existing defined contribution (DC) plans or group RRSPs. 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.

In the IIAC’s view, it would be more effective for the government to make improvements to existing tax-assisted savings vehicles (i.e. Group RRSPs, RRSPs and RRIFs). This would allow the government to better target population groups that may require additional pension support.

Additional details on IIAC’s retirement saving reform proposals are provided in our submission.