This is Part 2 of a two-part series.

I’ve been involved with the Healthcare of Ontario Pension Plan (HOOPP) for 17 years now, and in 2013, am serving my second term as board chair. Recently, HOOPP created a two-part white paper with The Gandalf Group called The Emerging Retirement Crisis. In my first column based on this data, I looked at why the DB model, of which HOOPP is one, works.

Some of the key findings in the second part of the white paper relate to the fact that 64% of Canadians don’t believe Canada has a good workplace pension system. Seventy-three percent of those say that employers aren’t offering sufficient pension plans.

Yet, continually, on the HOOPP board we hear that DB pension plans—common in the public sector and unionized private sector workplaces—are gold-plated and not sustainable. Nothing could be further from the truth.

The average HOOPP member receives a pension of under $17,000 a year after a long, hard career. That’s an adequate pension, but not gold-plated.

Critics of public sector DB pension plans say that they should be replaced by “cheaper” DC plans. But with DC plans, there are no guarantees. A lower percentage of earnings, typically 3% to 5%, is set aside on payday, but it’s up to the individual member to decide how to invest it. The member usually gets to choose from a family of mutual funds. Those funds charge very high fees, up to 2% a year, whether the investments are up or down. So a DC pension is far less than even the modest pensions HOOPP and other DB pension plans provide. And worse, it’s again up to the member to decide how to turn that savings into income.

That’s why, rather than cutting DB pension plans, we should look at ways to ensure they can continue to contribute to the well-being of retirees. And we should look at improving the retirement system for those who lack DB coverage.

CUPE and other groups such as the Canadian Labour Congress, many provincial premiers and other retirement industry observers see the answer for those without adequate coverage in the expansion of the Canada Pension Plan (CPP), through small, gradual contribution increases over time. That would double its modest benefit of $12,000 a year maximum to more like $24,000.

Ontarians are telling us that they are willing to pay more into their employer-sponsored pension plans. They aren’t critical of public sector pension plans—in fact, in reading their responses in the white paper, you can see that they would like to see the bar raised for everyone. Seventy-seven percent of Ontarians said they would like to be part of a DB plan, and an equal number (77%) want to see the CPP expanded.

Rather than discarding the pillars of the system that work, we should look at those that are not working with an eye to improving them.

Helen Fetterly is chair of HOOPP. The views expressed are those of the authors and not necessarily those of Benefits Canada.

Related articles:

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

Join us on Twitter

See all comments Recent Comments

Norm Johnston:

Add in $18,372 for CPP & OAS makes total pension about 70% of pre-retirement earnings. Also add in guaranteed inflation protection, disability benefits, employer contributions about 125 % of employees deductions and overly generous employer subsidized early retirement makes in my mind every reason not to dispel the myth. Generous benefits funded by taxpayers who in many cases have no employer pensions.

Wednesday, August 28 at 1:16 pm | Reply


I must take exception with the comment that “DC pensions less than even the modest pension produced by HOOP and other DB Plans”

To be fair one must use the same inputs in both situations and in today’s DB world, if one takes into account employee contributions, employer regular contributions and employer additional contributions to pay for plan deficiencies, the total dollar inputs are often close to 20% of covered payroll. If you accumulate those dollars in a DC plan over a working career, the two pension amounts are now close together. As well, the tone of the comment about DC fund charges implies that DB investments come free of charge which they certainly don’t, even they are done “in-house” so to speak there is still a inherent fund cost plus the cost on the entire infrastructure of the “in-house” investment team. So let’s be fair and compare apples to apples.

Thursday, September 05 at 1:39 pm | Reply

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required