The Investment Industry Association of Canada (IIAC) questions whether a CPP supplement is needed, given the saving options already available to investors.

In a release, it says, “It may not even make sense [since] voluntary supplemental pension plans generally involve contributions to individual accounts, much like existing defined contribution plans [and] group RRSPs.”

Read: Implications of the voluntary CPP for employers

And, “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.”

Instead, the IIAC says the government should make improvements to existing tax-assisted savings vehicles, including RRSPs and RRIFs, as well as focus on how to help groups that require additional pension support.

Looking for related articles? Read more stories about the CPP.

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John Clark:

Of course Private Insurance does not want to see the CPP enriched in any way! They are quite prepared to throw anyone under the bus that can’t afford the private premiums!

Monday, August 31 at 2:56 pm | Reply

Scott Aver:

I favour the convenience of a pre-tax payroll source deduction over taking the after-tax money across the street. Given the volume of participation and monies flowing through the proposed CPP AVC plan, the administration costs would be minimal. Maybe 10 basis points maximum. Probably closer to 5 basis points. This cost would be buried in the CPPIB Clone Fund Management Fee which would cost investors maybe 50 basis points.

Tuesday, September 01 at 1:35 am | Reply

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