Ottawa Reveals New Pension Plans Proposal

This article was last updated on April 16, 2022

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The federal government made an important announcement about Canada’s long-debated retirement pension plan on Thursday, proclaiming to unveil a framework for a new benefit plan. The federal minister of state for finance, Kevin Sorenson, mentioned during a keynote address to the Economic Club of Canada that a proposal for Target Benefit Plans has been presented. Addressing the audience at the One King West hotel, Sorenson stated that “Target Benefit Plans are a new, innovative proposal that will help support affordable and sustainable pensions for Canadians.”

According to Sorenson, these plans aim to offer targeted, instead of guaranteed, benefits, and contributions to be adjustable within a specified range. Additionally, it was explained that these will be available to employees of Crown corporations and federally regulated companies including telecommunications, airlines and banks. The minister alleged that Ottawa looks forward to feedback from the public on the proposal for the next 60 days. In his speech, Sorenson stated that governments should follow the federal example of focusing on encouraging job growth and getting back to balanced budgets. He mentioned that “Ontario’s risky pension scheme would have detrimental effects on the economy today and would not provide a fully-funded return for forty years.”

Almost one-third of working Canadians are covered by employer plans. Whereas a growing number of economists and financial planning experts have cautioned that Canadians, especially in the middle class, are not saving enough for retirement and could face a sharply reduced standard of living after they leave the workforce.

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