Archived - Harper Government Engages with C.D. Howe Institute on Target Benefit Plans
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Discussion focuses on how Target Benefit Plans can help support the long-term sustainability of federally regulated private and Crown corporation pension plans
May 5, 2014 – Toronto, Ontario – Department of Finance
Minister of State (Finance) Kevin Sorenson today spoke to the C.D. Howe Institute on the benefits of a proposed federal framework for Target Benefit Plans (TBPs).
TBPs would be structured to help ensure that effective, sustainable pension options are available to individuals who work in the federally regulated private sector or Crown corporations. Its innovative approach is intended to preserve and increase the number of employers that can offer employees an affordable workplace pension plan that has a predictable pension in retirement. The voluntary nature of the proposed framework means that all parties would be involved in the decision as to whether or not to adopt a TBP, and have a say in the design elements of the plan if they do.
The Harper Government recently launched public consultations on the proposed TBP framework. Canadians are invited to take part in the consultations over the coming months to ensure that the final framework reflects the views of all stakeholders. Individuals interested in finding out more or in submitting their views on the proposed framework should refer to the consultation paper listed below.
- There were 1,234 federally regulated pension plans in Canada in 2013.
- TBPs would promote plan viability through their ability to adjust benefits and contributions to ensure the target benefit is met and deal with surplus or deficit situations.
- TBPs would not have a solvency funding requirement because benefits are targeted and benefits and contributions adjustable.
- The proposed TBP framework would be a new and innovative pension option for federally regulated private sector or Crown corporation pension plans within Canada’s comprehensive and strong pension system that also includes Old Age Security, the Guaranteed Income Supplement, the Canada Pension Plan, Tax-Free Savings Accounts, Registered Retirement Savings Plans and Pooled Registered Pension Plans.
- The TBP framework consultations will not consider changes to federal public sector pension plans, which are governed by their own respective legislation. The Government has already taken steps to ensure that federal public sector pension plans are more in line with the private sector.
“It was great to have the opportunity to consult with the C.D. Howe Institute and its members on the new and innovative Target Benefit Plan framework. Our Government is providing a predictable and flexible pension option to support the long-term sustainability of federally regulated private pension plans in both favourable and adverse market conditions.”
- Kevin Sorenson, Minister of State (Finance)
- Harper Government Begins Consultations on a Potential Target Benefit Pension Plan Framework
- Consultation Paper: Pension Innovation for Canadians – The Target Benefit Plan
- Frequently Asked Questions on Proposed Target Benefit Plan (TBP) Framework
Office of the Minister of State (Finance)
Department of Finance