The Canadian Life and Health Insurance Association (CLHIA) is calling on the federal government to provide more flexibility for retirement savers by expanding access to annuities.
CLHIA sets out its policy recommendations in its 2018 federal budget submission published on Friday.
The industry trade group says its proposals would enhance retirement security.
“For many Canadian retirees, there is an increasing need to convert some or all of the savings accumulated in their defined contribution pensions, RRSPs, RRIFs, PRPPs, and TFSAs into guaranteed lifetime income streams,” CLHIA says in its submission.
For example, it suggests allowing gradual annuity purchases. It also recommends allowing Canadians to hold life annuities within their TFSAs, “efficiently meeting demand for guaranteed lifetime income.”
“In light of increasing life expectancies and currently low interest rates, it would make sense to permit some further flexibility beyond retirement, allowing consumers within tax-deferred plans to retain investment control and exposure to investment market growth to a later date,” CLHIA adds.
“These options would allow individuals within tax-advantaged savings and retirement plans to ‘lock in’ guaranteed income streams at opportune times while adding no cost to the tax system, since those savings are already exempt from tax reporting until actually paid out of such plans,” it says.
Additionally, CLHIA calls on the government to reduce or eliminate the capital tax on financial institutions, encourage private sector investment in infrastructure and innovation, enhance trade and reduce prescription drug prices.