BC: Would you say the DB pension system is in crisis?
SP: I don’t like to be a scare monger, but I think as time goes on and these problems are not solved I think we face greater likelihood that plan sponsors, particularly on the private side, will just get out of DB plans altogether.
BC: Are DB plans going to be a thing of the past?
SP: I don’t think it’s too late to try and save them. I think they may look different in the future. We may see lower benefit levels, more explicit risk sharing—things like that. I think there will be a growing recognition that the public sector is doing much better on the DB front than the private sector, which may lead to what some have coined “pension envy.”
BC: How would you characterize the progress made since the ACPM released its Back from the Brink report in 2005?
SP: There has been certainly increased discussion around these funding issues. We’ve been reaching out as an organization to other organizations, including labour groups, to continue the dialogue. The proposed relief at the Quebec, Alberta and federal level is temporary in our view. There’s a lot more that needs to be done. And certainly we need to start hearing from provinces like Ontario who have been noticeably silent throughout all of this.
BC: What pension reforms are still required?
SP: There’s a big part of the DB funding puzzle that needs to be resolved. There are issues still around the Monsanto case that need to be resolved. On the pension reform front, we need to see more in the way of uniformity. The Model Law is progressing but CAPSA is looking at the least contentious issues right now. They’ve yet to deal with some of the more difficult issues.
BC: How valuable is the ACPM today, compared to when it was created 30 years ago?
SP: I think we’ve gone from being an industry group that’s of interest only to plan sponsors to an industry group that regulators and legislators turn to from time to time for input on various issues. We have become, in my view, the national voice when it comes to advocating on pension issues.
BC: The ACPM positions itself as the “national voice” of the pension industry. Is this too broad a mandate? Can the ACPM possibly speak for such a diverse array of interests?
SP: When we use the phrase “national voice” we’re really referring to the fact that ACPM is an organization with member representation and active volunteer participation right across Canada. I think the current mandate of the ACPM reflects the fact that our advocacy efforts rely upon the expertise of our volunteer members who themselves represent a diverse cross-section of the pension industry—plan sponsors, plan administrators, actuaries, lawyers, economists, academics, custodians, consultants, asset managers etc. The ongoing challenge with any issue is to arrive at a position that is based on an informed consensus and that reflects the ACPM’s overall mission which is to promote the growth and health of the retirement income system in Canada.
Don Bisch is editor of BENEFITS CANADA. Don.Bisch@rci.rogers.com
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