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So who is at retirement income financial risk today? A large number of workers.

We know only 32 per cent of workers have workplace pensions of any type. In the private sector, only 24 per cent of workers have anything. Further, the superior Defined Benefit Plan coverage is down everywhere.

We also know that very poor workers should not be forced into a mandatory system. Why? Because, after paying their mandatory contributions, they will receive very little to no extra benefits because of the clawback provisions in our Guaranteed Income Supplement (GIS) (usually alongside provincial supplements). In fact, the working poor can easily lose a full dollar for every new dollar of monthly income they produce on their own. Not to mention that the Old Age Supplement (OAS) and GIS benefits, now payable at age 65, will not be paid until age 67 starting in 2029.

Can we provide Canadians with a better system? The answer is a hearty yes, although it will take some will on the part of legislators, both federal and provincial, since pension benefits acts and the Income Tax Act will have to be amended.

Here is how it would work. The government makes it possible for institutions and agencies to create large pooled Retirement Income Funds to which any worker can contribute (within some tax limits). After a very short establishment period, these funds must achieve a minimum size (at least $10B in short order but even larger later). The funds must have a board of directors of experts who will guarantee good governance and guarantee that the plan participants’ needs are paramount and more important than any agent within the system. Expense ratios will be capped (and policed). Forty basis points (0.40 per cent) seems appropriate since many larger pension plans today operate with expense ratios below 25 basis points.