Good morning, all.
Thank you, Mr. Chairman, for including us in this hearing this morning.
I am Dan Braniff, unpaid volunteer and the founder and spokesperson for the Common Front for Retirement Security.
Common Front is the largest general advocacy in Canada, representing 20 diverse organizations, consisting of two million members. I think you have my list on file.
I last appeared before your committee in October 2006, appealing for pension splitting, and that followed a three-year advocacy campaign. That was described by my members as the best Hallowe'en trick ever. Pensioners rejoice every year when they fill out their joint election for pension splitting, and that means this reward for you goes on forever.
Pension promises are under unprecedented stress. Capital markets lie unprotected from the pillage of unethical forces. The majority of defined benefit plans suffer solvency deficits. Contribution plans are inefficient, and participants lack expertise and guidance. One-third of Canadians do not have access to occupational plans.
The deficiencies are interrelated and demand a consolidated solution. Retirement security, of course, is dependent on market stability and regulation. Universal and equal access is essential if social turmoil--we call it pension envy--is to be avoided. A lethal combination: plan members watch their pension security evaporate while perpetrators of toxic investments fill their pockets and pension investment managers appear to take excessive gambles to reward themselves while the funds are going down the tube.
Contribution holidays should be postponed until rules are strengthened. The regulator needs more power to scrutinize funding obligations, diminishing solvency trends, and fiduciary assumptions. Next to the banks, pension funds form the most powerful engine in this country, driving the economy. Retirement security motivates savings, and that's what we need in this country.
Pension funds require a contingency reserve, a rainy-day provision for surviving economic emergencies like the current meltdown. The 10% surplus tax threshold should be abolished. Surpluses above the proposed contingency reserve should be amortized similar to the amortization of solvency shortfalls.
Solvency deficits should rank above all creditors in bankruptcy. The Common Front proposes that sponsors pledge fixed assets as security for shortfalls other than a letter of credit. The Common Front supports previous submissions and the one I heard this morning for a universal pension plan. If Canada had a UPP in place, the solvency crisis would not exist. General Motors, Nortel, and Air Canada pensioners would not be facing a pension disaster.
Portability would enable pension plan transfers and a level playing field among competing private industries. Capital markets need a sophisticated national agency with laws and enforcement tools. They need to be staffed by legal and forensic economists equipped with investigative specialists similar to CSIS and the FBI.
Regulation reforms must have national standards for today's mobile worker and pensioner. Periodic schedules of regulatory reviews should be programmed to keep pace with rapidly changing economic times. We're far out of date.
Finally, eliminate the mandatory RRIF minimum withdrawal to enable pensioners the budgetary flexibility to preserve independence.
Thanks for your attention.