Canadians have a misplaced fear about not being ready for retirement which is putting pressure on elected officials to come up with big solutions, the head of Power Financial Corp. told shareholders on Thursday.
Surveys show that most Canadians believe they won’t have enough for retirement. This is even though some studies show that as many as three-quarters of retirees will have a standard of living that is comparable or better than that in their working years.
Those who work for small employers where there is no plan, who work at larger employers but don’t contribute to the existing pension plan, and seniors who are single, particularly women, are among the approximately 25 per cent of Canadians who aren’t saving enough, some studies have found.
“The solutions need to be targeted. Only a small part of the population actually has an issue,” Orr said in an interview following the meeting.
“We are not talking about bigger issues that are coming down the pike like the increasing health care costs that are going to be faced by this country over the next 10, 20, 30 years. Those are going to create big demands on our financial resources,” Orr said.
“Yet we’re spending those financial resources to solve a problem that exists in small pockets because there’s fear and lack of knowledge. That’s not good public policy.”
Asked whether the Ontario pension plan, slated to launch in 2017, would hurt Power Financial’s bottom line, Orr said, it “would not impact us in a material way, but would hurt at the margin.”
“If the government is providing a bigger role in savings, that’s less of a role for the private sector altogether,” he added. “We are trying to come at the discussion based on facts, based on sound policy.”
Montreal-based Power Financial, whose major holdings include Great-West Life and IGM Financial, said Thursday that its net earnings for the three months ended March 31 were $ 573 million or 80 cents per share.
The company’s holdings also include London Life, Canada Life, Investors Group, Mackenzie Financial, and Investment Planning Counsel. In the U.S. it does business as Great-West Financial, Putnam Investmetns, and PanAgora Investments. In Europe, it operates under the Canada Life brand in the U.K. and Germay, and Irish Life in Ireland.
“We never lose sight of the fact that we make long-term promises to people. Our clients entrust their financial futures to us, and so we manage our affairs with prudence and caution so that we can deliver on our promises.”
Power Financial is the main subsidiary of Power Corp.
With files from Canadian Press