Canada needs to boost the number of DB plans among employers rather than focusing on introducing cheaper alternatives. That’s the recommendation from John Crocker, outgoing president and CEO of the Healthcare of Ontario Pension Plan (HOOPP).

“With pensions, the less you pay in, the less you get out—it’s a simple as that,” he says.

Crocker—who is ending his 30-year career in pension investments and 10-year term as HOOPP CEO on Dec. 31—references Australia, where, he says, a nation-wide switch from DB plans has led to widespread senior poverty. “Half of Australian seniors live below the poverty line, and two-thirds run out of pension income by age 75. Is that what we want here?”

The average Canadian has saved just $60,000 in RRSPs by retirement age, says Crocker—not nearly enough for someone to live on for another 20 or 30 years.

HOOPP is a fully funded DB plan, and Crocker says that its success shows that DB can work. “With good governance, professional investors, a sound investment strategy, and mandatory contributions by members and employers, you can get there,” he says. The average HOOPP pension starting in 2010 was $18,400—meaning that after 25 years, a retiree will have received $460,000 in pension payments, he explains.

“It’s important for us to demonstrate that DB can still work. There is no more efficient, more effective way to deliver pensions to people than the DB model,” he says. Other types of plans “simply download the responsibility for retirement onto the shoulders of the average working person. Very few among us know investing well enough to know when to buy, when to sell or when to hold—it’s not fair to force busy people to try and figure this out by themselves.”

Copyright © 2020 Transcontinental Media G.P. Originally published on

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