The 'Canadian Pension Model' Under Attack: Can It Survive And Prosper?
“Canada’s public sector DB plans frequently attribute their success to the ’Canadian Pension Model’. A recent World Bank study identifies superior governance, economies of scale, innovative investment practices, responsible funding, and visionary leadership as important features of the Model….. Without disputing the virtues of the Model, we attribute the success of Canada’s public sector DB plans to large public subsidies made possible by practices which are neither admirable nor virtuous….”.
“RISK AND REWARD IN PUBLIC SECTOR PENSION PLANS: A TAXPAYER’S PERSPECTIVE”MALCOLM HAMILTON AND PHILLIP CROSSFRASER INSTITUTE, DECEMBER 2018
The Three Key Messages of this Letter
- The practices Hamilton and Cross refer to in their paper are indeed “neither admirable nor virtuous”, but are not caused by the ‘Canadian Pension Model’.
- Indeed, the Ontario Teachers’ Pension Plan story shows that complete implementation of the ‘Canada Pension Model’ is the best antidote to these undesirable practices.
- The ‘Canadian Pension Model’ would be a powerful instrument for producing fair, adequate pensions around the world at an affordable cost if it was globally adopted.