Ignatieff calls for pension reform to boost savings

Liberal Leader Michael Ignatieff is calling for the creation of a supplementary government pension plan, saying Canadians are not saving enough for retirement.

Speaking to reporters in Ottawa on Tuesday, Ignatieff outlined his party's plans to reform pensions, which included a plea to the government to also reform the bankruptcy legislation to protect pensioners when companies go bankrupt.

"We are calling on the government to make saving and full retirement easier and more secure for all Canadians," Ignatieff said.

Although he provided few details, Ignatieff said the proposed supplementary Canada pension plan would be a new option for retirement savings and increase the savings rate for Canadians, who he said are not putting enough money away for retirement.

Ignatieff said too many Canadians have too little savings to retire in dignity and that the savings they do have are not secure.

"It's a voluntary tick-off on your payroll slip and it allows you in the simplest possible way to add to your savings," he said.

"It allows [Canadians] to confront a challenge many of us are unwilling to face that we just haven’t put enough away for a rainy day."

Some provinces have called for such a plan and will create their own if the federal government does not provide the option, he said.

Ignatieff denied this new public option could jeopardize the jobs of those who sell RRSPs and other pension packages in the private sector.

"This is about giving Canadians another option, another opportunity," he said. "I don't think it’s going to put anyone out of work."

The Liberals also want to give pension plan beneficiaries the option to pool their plans with the Canadian Pension Plan if their plan’s sponsor goes bankrupt.

"So when a company goes bankrupt, and pensioners are needing help, they could elect to have the CPP step in and manage their pension fund assets for growth though a trusted vehicle like the CPP," Ignatieff said.

As well, Ignatieff urged the reform of the Bankruptcy and Insolvency Act to "protect the  most vulnerable pensioners" when companies go bankrupt, particularly those on long-term disability.

Currently, those on self-funded long-term disability benefit plans could lose everything if their company goes bankrupt, the Liberals say. The plan would change the pensioners' status up to preferred creditor in case of bankruptcy.