FEWO Committee Report

At its meeting on October 1, 2009, the Standing Committee on the Status of Women (hereinafter the Committee) opted to study the question of women and pension security. This study has allowed the Committee to explore questions relating to both public and private pensions, and to examine the question of income security for women who have not participated in the paid work force. The Committee held 10 meetings with 37 witnesses — government officials, academics, labour organizations, private sector organizations, and advocates. It is the hope of the Committee that its deliberations on the question of women and pensions can feed into the many public policy discussions under way at this time, so that all Canadians, both women and men, will be able to benefit from adequate and predictable income in their retirement years.

Canada has developed an income security system for seniors which relies on three key pillars: a universal social program, a public pension system and tax-assisted savings through employer pension plans and registered retirement savings plans.

In order to plan for retirement Canadians must be assured that their income will be adequate to meet their basic needs. In order to maintain a standard of living close to that which they enjoy prior to retirement, it is also important to look at the income replacement rate of seniors — the proportion of their pre-retirement income that they receive after retirement.

For many seniors in Canada, the past two years have given rise to a number of important questions relating to their income security. Seniors who depended on income from private savings have seen the value of investments depreciate sharply, resulting in significant drops in their overall income. Some seniors who had counted on an employer pension have found themselves with reduced benefits when bankruptcy prevented companies from adequately funding their pension obligations. These events affected men as well as women. As Mr. Dan Braniff of the Canadian Association of Retired Persons told this Committee; “The financial crisis has maybe given us one little gift, in that it's exposed the deficiencies and cracks in the present system.”[1]

This is a critical moment in the policy discussions relating to pensions in Canada. Comprehensive reviews of the pension system have been carried out by expert commissions in Nova Scotia, Ontario, Alberta and British Columbia. In early 2009, the federal government launched a consultation aimed at strengthening the legislative and regulatory framework for private pension plans subject to the Pension Benefits Standards Act, 1985, announcing a reform plan in October 2009.

In addition, the Canada Pension Plan (CPP) and its Quebec counterpart, the Quebec Pension Plan (QPP), underwent their scheduled triennial review in 2009. In May 2009, changes to the CPP were recommended by federal-provincial-territorial Ministers of Finance. Recommended changes require the approval of the Parliament of Canada as well as the approval of at least two-thirds of the provinces with two-thirds of the population of Canada before they come into force. These changes are currently before Senate in Bill C-51.

Finally, at a meeting in May, federal-provincial-territorial finance ministers agreed to create a working group to examine a range of research issues related to retirement income adequacy in Canada. This Research Working Group on Retirement Income Adequacy will report to the federal-provincial-territorial Ministers of Finance and Ministers Responsible for Pensions at their upcoming meeting in Whitehorse in December.

It is within this context that the Committee undertook its study of women and pensions in the fall of 2009.