However, because the standards set out by the CIA have not been rewritten for some time, the project team expressed concern in the area of disclosures. As a result, it recommended more disclosure requirements be added. “There is no question that the public standards for disclosure have increased significantly,” says Fitzgerald.
Other recommendations include providing guidance through educational notes, further changes to CIA standards of practice and taking steps to address regulators’ concerns. “If our recommendations are implemented, we believe they will go a long way to improve the quality of our valuation reports,” the report said. Fitzgerald said this review is just the first of many: “We want to look at some specialty reports—such as reports of multi-employer plans.”
The review team suggested that future reviews of valuation reports be conducted following the development of educational notes and after revisions to the standards of practice are complete and followed for two years.
The CIA is also working on a separate initiative to bring different parties together to have an open discussion on the solutions and support needed to ensure the future of defined benefit pension plans. “We are concerned, as a lot of people are, that the defined benefit plan is in decline,” Fitzgerald says. “What we haven’t seen is very much in the way of attempts to get the different parties together to talk.”
He says the CIA is in discussions to try to bring the Association of Canadian Pension Management, the Pension Investment Association of Canada, the Canadian Labour Congress and different organizations together. “Clearly what we need is some agreement—so that we can offer to governments some solutions that are perceived as acceptable by as many people as possible,” says Fitzgerald.
EU HELPING CHINA
Due to increasing internal migration, China is joining the European Union(EU)in a pilot “mobile pension” project early next year. The US$50 million project is the first collaboration in social security between China and the EU. The project calls for a team of experts from the EU to provide assistance and know-how in implementing mobile pensions, which are aimed at ensuring that migrants get their pensions wherever they are.
The Chinese are currently confronted with huge internal migration flows. The mobile pension project will be carried out in four to five areas around China.
An estimated 2.6 million people in Britain are “panic saving” and are desperately trying to set aside as much money as possible before retirement.
According to research conducted by Prudential Insurance, 17% of people between the ages of 55 and 64 are panic saving at least 20% of their monthly income. Three per cent are saving at least 50% of their income in order to boost their pensions.
Also, about 27% of people in the same age group said they would cut back on vacation so they could focus on retirement saving. Twenty-one per cent said they would go without a new car.
Half of the population of Germany is opposed to the idea of being forced to save for retirement, according to a new poll.
The survey, conducted by Berlin-based polling firm Allensbach, was done after calls for a semi-mandatory defined contribution (DC)plan were made in light of the limited use of the government-initiated DC plan. That plan was implemented in 2002 and was supposed to give workers a chance to save for retirement through the workplace.
The government will decide whether retirement savings will be made mandatory in 2008, when pension reforms are revisited.