Veterans Affairs committee  Different plan sponsors have different objectives for their retirements. There are positives and negatives. The challenge with pension benefits in general is that they are a fairly blunt instrument because they apply to high-income earners as well as to low-income earners. Often when we look at, say, removing a limit like the marriage after 60 limitation that's in the plan, the biggest beneficiaries of this are going to be the high-income earners.

Veterans Affairs committee  It's a good question. Ultimately we tend to do costings and enlist the services of the office of the chief actuary to support us in doing that kind of analysis only on an as-needed basis. It costs the plans money to perform these kinds of service, and there are a lot of different proposals that are put forward for changes to the plans, so unless something is being put forward for consideration by the government, we tend not to ask the office of the chief actuary to undertake this work.

Veterans Affairs committee  It does come with a cost, and that cost is borne by the plan, so we try to minimize and find—

Veterans Affairs committee  Speaking broadly here for a moment, I would first say that it's unfortunate that the gold digger connotation is associated with this provision, because it's really not what it's intended to do. I think the restrictions on marriage after retirement were about aligning with family law and direction as to who would have rights to pension assets; wherein, family law would guarantee the rights of spouses regarding assets acquired during a period of marriage or common-law union.

Veterans Affairs committee  You're being exceptionally clear, but I would make the point here that we're talking about very different time horizons. Most of these people opting into an optional survivor benefit have very little time to accumulate any money into a plan. If they were to go out at 65 and buy a term life insurance policy, for the kind of money that we're talking about, they wouldn't be paying $1,000 a month.

Veterans Affairs committee  I can speak to this at a very high level. We know that only a few pension plans in Canada offer a survivor benefit to a spouse or common-law partner whose union begins after retirement. As you pointed out, there is the Quebec plan, but there is also the Ontario Municipal Employees Retirement System, both of which have those.

Veterans Affairs committee  I will go on this one first. In essence, you're right that the amount that's reduced of the benefit is forgone. Pension plans are a pooling of risks between members. They're not designed to pay out in every case for exactly what people pay into them. There are many employees or members who pay into these plans who never receive what they paid into them because they are deceased before they can yield those benefits or otherwise.

Veterans Affairs committee  I would look at the optional survivor benefit, which, as you pointed out, is something that is not offered by most pension plans. It is something that the public sector plans put in place—I think it was in 1992—as an option. I would look at this like term life insurance. It's an option that is provided to members that allows them to provide for a spouse who otherwise wouldn't qualify under a normal pension survivor benefit.

Veterans Affairs committee  Could you please repeat your question? I'm just making sure I understand. Is this in relation to the purchase of annuities or...?

Veterans Affairs committee  All right. I'll be very quick. They all have very similar optional survivor benefits. They are all actuarially determined. They're calculated based on an actuarial formula as to what the reduction should be in the benefit to pay for this, depending on what the member opts for with regard to a replacement benefit for their surviving spouse.

Veterans Affairs committee  I love where the conversation went here. I think he's got the momentum. We'll leave it at that.

Veterans Affairs committee  Thank you very much. The numbers that were calculated more than a decade ago estimated a total nearing $1 billion as the cost to implement that. To give you a sense of order of magnitude, based on assumption changes that we've seen elsewhere, you could conservatively double that number as far as the cost goes.