Federal, provincial finance ministers agree on private pension plan

Federal and provincial finance ministers had different views on how to ensure Canadians have enough money for retirement but managed to agree on allowing more private involvement.

"We are all concerned about the economic recovery. We want to make sure the jobs continue to grow in Canada and so there is concern about not putting more burdens on employers right now," said Finance Minister Jim Flaherty Monday afternoon.

Flaherty was in Kananaskis Country meeting with his provincial counterparts on the economy and the future of the Canada Pension Plan.

The minister got everyone to agree on his plan for more private involvement, an idea that was initially turned down by many of his provincial counterparts. One of his only allies at the start was Alberta Finance Minister Ted Morton.

Many of the ministers wanted to look at expanding the Canada Pension Plan but reforms were put on hold.

Instead they have agreed to a framework agreement to allow private sector funds called Pooled Registered Pension Plans, or PRPPs.

Under the agreement, provinces will decide whether business owners must make contributions.

Flaherty says the plan will make pensions available to any type of employee and self-employed Canadians.

He adds the economy isn't strong enough yet to force employers to make higher Canada Pension Plan contributions.

Morton says he likes the private plan proposal. He says it doesn't make sense to hike Canada Pension Plan contributions.

"Certainly amongst a number of us, there was real concern that it would have a negative impact on job creation. Now's not the time to do that," he said.

But labour groups, who want employers to double Canada Pension Plan payments, are disappointed reforms have been put off.

"My big fear is that reform delayed may become reform denied," said Gil McGowan, president of the Alberta Federation of Labour.

The ministers will meet again in June to work out the details of the PRPP system. They will also discuss beefing up the Canada Pension Plan, something that will depend greatly on what direction the economy is heading in half a year.

Flaherty also urged the provinces to get a handle on the growing public debt and eliminate deficits by 2015.

ctvcalgary.ca, Tues Dec 21 2011

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