Pension expert Keith Ambachtsheer is urging policymakers to choose one of two feasible solutions to the retirement savings shortfall: either expand the Canada Pension Plan and Quebec Pension Plan or expand supplementary pensions.

In a pension reform brief released on Monday, Ambachtsheer, who is president of Toronto-based KPA Advisory Services Ltd. and director of the Rotman International Centre for Pension Management at the University of Toronto, outlines his latest recommendations in the pension reform debate.

In the past, Ambachtsheer has vocally advocated for the creation of a Canada Supplementary Pension Plan to fill the gap in pension coverage in Canada.

But in his latest report, Ambachtsheer suggests that expanding the CPP/QPP could be an alternative viable solution.

“In our view, either strategy, properly designed and implemented, could propel Canada from its current 5th place ranking (according to the Melbourne Mercer Global Pension Index) in the global pension excellence derby to #1,” the brief says.

Released a month ahead of a finance ministers’ meeting in Alberta that will focus on this topic, the paper suggests that the pension reform debate has reached “a critical juncture”.

“The time has come to choose the winning pension reform horse,” it says.

On the proposal to expand the public pension system, the paper suggests either raising the Year’s Maximum Pensionable Earnings, raising the income replacement rate, or some combination of the two. It points to research by Jon Kesselman through the University of Calgary’s School of Public Policy, which concludes that expanding the CPP/QPP through both of these means could lead to equity and efficiency benefits, and higher, more secure, more portable pensions for most employees.

On the topic of supplementary pensions, the brief cites research published by the Institute for Research in Public Policy, which concludes that the Saskatchewan Pension Plan and Co-operative Superannuation Society Pension Plan provide an effective model that could be implemented across the country.

Any effective solution to the retirement savings shortfall must involve only one of these two proposed solutions, Ambachtsheer warns.

“Trying to do ‘some of each’ may seem politically attractive, but would be unacceptably risky as a practical proposition,” the brief says. “The super-complexity that would result from choosing a dual-track approach involving riding both pension reform horses would risk torpedoing the fruits of the years of research and debate that have gotten us to this point.”

IE