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The Canadian Life and Health Insurance Association (CLHIA) is recommending that the federal government pursue four initiatives, including enhancing retirement income security.
The association has submitted its recommendations for the government to consider for the 2018 federal budget. As well as enhancing retirement income security, the association recommends encouraging private sector investment for infrastructure, reducing or eliminating capital tax on financial institutions, and furthering international trade and tax competitiveness.
Converting savings accumulated in DC-type schemes and other savings vehicles such as RRSPs into annuities will help develop retirement security, and Canadians need the option of buying annuities before retirement to avoid market risk, the association says.
“One way to minimize this risk and increase retirement incomes is to allow gradual annuity purchases prior to the cusp of retirement, even though income payments from those annuities will not start until retirement or later,” says the association.
“While the recently adopted expansion of CPP will ultimately improve guaranteed lifetime income payments to retirees, the effects of that change will not be realized for decades. 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.”
More: Association recommends government move to reduce risk, including longevity.

ARIA provides a forum for an informed discussion on retirement income adequacy, and other related issues, including pension and retirement coverage, and defined benefit pension plans – ARIA pensions blog, 12 Dunlop Street, Barrie, ON, L4N 1V6 – sitemanager@ariapensions.ca

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