Posted By 
By Jean-Pierre Laporte
Special to the Financial Independence Hub
The Federal Government has started consultations on its newest retirement savings concept: allowing individuals to make voluntary contributions to the Canada Pension Plan.
While details are sketchy, it would appear that basic agreed-upon concepts mean contributions would be voluntary and that employers would not be forced to make or match contributions.
While the Federal Government made it clear that it would not let the Canada Revenue Agency be used by the Ontario Retirement Pension Plan proposed by Premier (Kathleen) Wynne, presumably a voluntary CPP would allow use of the existing machinery to collect these new savings.
The core design issue rests with the form of benefit that this voluntary plan would offer: defined benefit or defined contribution?
If the goal here is to create a supplement to the current CPP benefit, presumably contributions would have to be locked in, and without member investment directions.
The mechanism to convert the fixed defined contributions coming into the supplemental CPP account into defined benefits would have to rely on partial deferred annuities, or self-annuitization.
This would distinguish the Supplemental CPP from an RRSP or TFSA.
No fiduciary responsibilities for employers
