IFIC Commends Federal Finance Minister on Balancing the Budget and Support for Retirees
Toronto – April 21, 2015 – The Investment Funds Institute of Canada (IFIC) today congratulated the federal minister of finance on achieving a small budget surplus while delivering important measures to assist Canada’s growing population of retirees.
“Elimination of the deficit is an important signal – one that will help to build the confidence of global capital markets and individual Canadian investors alike, both of which are prerequisites for the continued recovery of jobs and growth,” said Joanne De Laurentiis, president and CEO of IFIC.
IFIC commended the government for recognizing the shifting landscape of retirement in Canada with changes designed to give retirees flexibility in managing their own financial affairs and to ensure they don’t outlive their savings. The industry welcomed the federal government’s decision to reduce RRIF minimum withdrawal amounts.
“Canada’s population is not only aging, it is aging at a faster pace that many predicted when the RRIF rules were put in place, said De Laurentiis. “Our industry has strongly supported revising RRIF withdrawal rules for some time.” De Laurentiis further noted that that a C.D. Howe Institute analysis last year concluded that eliminating the minimum withdrawal rules would have “no significant fiscal impact” for government.
The industry also supports the announced doubling of TFSA contributions. “The investment funds industry serves as a major distribution channel for tax advantaged programs such as RRSPs, said De Laurentiis. “But RRSPs aren’t appropriate or available for everyone and TFSAs serve as an important alternative, especially for those on lower incomes and retirees.”
One change championed by the industry that was not included in this year’s budget was a recommendation to strengthen Group RRSPs with changes that would more closely align them with other retirement savings programs such as Pooled Register Pension Plans. “As the federal government looks for ways to help Canadians save more for retirement, we will continue to press for the changes to Group RRSP rules we proposed,” said De Laurentiis. Those changes include: making employer contributions to GRRSPs be payroll tax, CPP and EI exempt; permitting automatic enrollment of employees in GRRSPs (with reasonable opt-out provisions); locking in of employer contributions.
“By pursuing an “all-of-the-above” strategy of strengthening every option within the retirement savings marketplace, the government can support Canadians as they save and invest in their own priorities, said De Laurentiis.
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The Investment Funds Institute of Canada is the voice of Canada’s investment funds industry. IFIC brings together 150 organizations, including fund managers, distributors and industry service organizations, to foster a strong, stable investment sector where investors can realize their financial goals. By connecting Canada’s savers to Canada’s economy, our industry contributes significantly to Canadian economic growth and job creation. The organization is proud to have served Canada’s mutual funds industry and its investors for more than 50 years.
For more information:
Sara Clodman, Senior Manager, Public Affairs