The country faces an “extreme” savings situation, Goldring said in a speech in Toronto today. Participation in voluntary registered retirement savings plans and tax-free savings accounts is too low, he said.
“Australia, Chile and Singapore have met with success using compulsory savings programs,” said Goldring, head of the Toronto-based mutual fund company that has more than C$40 billion ($39.3 billion) in assets under management.
Goldring’s call follows Canadian Imperial Bank of Commerce CEO Gerald McCaughey encouraging Canada to create ways to allow additional voluntary contributions to the Canada Pension Plan to avoid declines in living standards upon retirement.
“It would give Canadians the choice to put aside more - a little at a time - with the confidence of clearly knowing what benefits it will bring,” McCaughey, head of Canada’s fifth- biggest bank, said yesterday during a speech in Fredericton, New Brunswick.
Savings products including pooled pension plans and the tax-free savings account, introduced to Canadians in 2008, “are all effective vehicles, but despite their attractiveness, the participation rates for them remain woefully low,” Goldring said.