Government must act on looming retirement income crisis: HOOPP

84% concerned about inadequate retirement income, 91% favour multi-employer pension plans

TORONTO, April 14 /CNW/ - With new research showing overwhelming public concern about Canada's looming retirement income crisis, the government must act now to enable multi-employer defined benefit plans, says John Crocker, President & CEO of the Healthcare of Ontario Pension Plan. He spoke at the Conference Board of Canada's Pension Summit in Toronto.

"I worry that as a country we are undoing decades of success at raising the standard of living for retired people and shrinking the scourge of elder poverty," Crocker said. "That's why I'm calling on government to show leadership by encouraging the development of multi-employer pension plans for Canadians."

New research carried out for HOOPP by the Gandalf Group shows that 84 per cent of Ontarians are concerned about not having enough money for retirement. 86 per cent believe there is an emerging retirement income crisis in Canada, and a majority (58 per cent) believe it is principally the role of government - not individuals - to ensure Canadians have adequate incomes in retirement. 91% support HOOPP's call for new multi-employer pension plans.

Crocker called on all governments to take action to "get the rules right," and to take leadership in forming new sectoral plans. Without corrective action now, he warns, the risk of elder poverty will grow as the baby boomers retire.

Crocker says regulatory barriers, such as accounting and surplus rules, make it hard for a single employer to fund a defined benefit plan. But there's strength in numbers, he notes. If multi-employer DB pension plans were formed to serve various sectors of the economy, "no longer would the full weight of funding be on one set of corporate shoulders."

Defined benefit pension plans typically provide retirees with pensions equal to about 67 per cent of their pre-retirement income. Other retirement savings vehicles typically generate only about 20 per cent of the individual's pre-retirement income.

"Together, we need to fix our pension system so that it looks after the retirement income needs of our citizens. If we focus on the right issue - adequacy - we can build a sustainable retirement system that makes sound business sense, we can meet the critical goal of allowing Canadians to retire with dignity and independence," says Crocker.

About the Healthcare of Ontario Pension Plan

HOOPP is the pension plan of choice for Ontario's healthcare sector with over 300 participating employers and more than 250,000 plan members and retirees. HOOPP pays more than $1 billion per year in pension benefits, providing security and peace of mind to thousands of retired healthcare workers.

HOOPP was created in 1960 and is now administered by a successful partnership of employers and representative unions. It is governed by a Board of Trustees with representation from the Ontario Hospital Association (OHA) and four unions: the Ontario Nurses Association (ONA), the Canadian Union of Public Employees (CUPE), the Ontario Public Service Employees' Union (OPSEU) and the Service Employees International Union (SEIU).

    
    Backgrounder Re: Research

    Gandalf study shows Ontarians are concerned about pension adequacy
    

Research carried out for the Healthcare of Ontario Pension Plan (HOOPP) shows Ontarians are very concerned about having adequate pension income in retirement. The survey, carried out by the Gandalf Group April 5 to 8, involved 1,010 Ontario adults, and has a margin of accuracy of +/- 3.08 per cent 19 times out of 20.

Among the key findings are:

    
    -   86 per cent feel there is an emerging retirement income crisis in
        Canada

    -   84 per cent were concerned about whether they have saved enough for
        retirement.

    -   67 per cent were interested in being part of a DB plan. Only 35 per
        cent were interested in being part of a DC plan.

    -   76 per cent agreed that the government should ensure that companies
        that offer pension plans have plans that can replace at least 60 per
        cent of their working wage.

    -   Ninety one per cent supported the idea of changing the pension rules
        in Ontario to create more multi-employer pension plans.

    -   85 per cent feel the government should ensure that Ontarians have
        access to an adequate pension income when they retire.
    

About the Healthcare of Ontario Pension Plan

HOOPP is the pension plan of choice for Ontario's healthcare sector with over 300 participating employers and more than 250,000 plan members and retirees. HOOPP pays more than $1 billion per year in pension benefits, providing security and peace of mind to thousands of retired healthcare workers.

HOOPP was created in 1960 and is now administered by a successful partnership of employers and representative unions. It is governed by a Board of Trustees with representation from the Ontario Hospital Association (OHA) and four unions: the Ontario Nurses Association (ONA), the Canadian Union of Public Employees (CUPE), the Ontario Public Service Employees' Union (OPSEU) and the Service Employees International Union (SEIU).

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