SIMA urges reform of Canada’s retirement-savings framework
Association says policy must change to make it easier for Canadians to save for retirement
August 27, 2025 (Toronto) – Canada’s affordability crisis is making it increasingly difficult for many Canadians to save for retirement. In addition, public policy does not reflect today’s pension realities. The Securities and Investment Management Association (SIMA) is proposing a comprehensive retirement-savings action plan to modernize Canada’s outdated system and help protect Canadians’ financial futures.
“Our plan lays out achievable, evidence-based strategies that will boost retirement security, enhance flexibility, reduce pressure on public programs, and support long-term economic growth,” said Andy Mitchell, SIMA’s President and CEO. “With a sense of urgency, Canada needs to evolve and modernize its policies to close the gaps in the system so that more Canadians can take advantage of voluntary private savings options to adequately finance their retirement.”
Canada’s retirement income system was built decades ago on foundational pillars, including:
- government-funded programs, such as Old Age Security (OAS) and Guaranteed Income Supplement (GIS)
- public retirement plans, such as Canada Pension Plan (CPP) and Quebec Pension Plan (QPP)
- workplace pensions, including defined benefit (DB) and defined contribution (DC) plans, and private registered savings, such as RRSPs and TFSAs, and
- non-registered personal savings and other investments
Over time, the balance among these sources has shifted to the point where today private savings contribute almost half of retirement income for Canadians aged 65 and older.
But saving has never been harder. Inflation, housing costs, stagnant wages and household debt are leaving many Canadians with little room to put money aside. For too many families, private savings are slipping out of reach. Without action, the gap between what Canadians need for retirement and what they can realistically save will only widen.
Public policy hasn’t kept up with the changing environment. It’s based on assumptions from decades ago about when people retire, how long they live, and what kind of support they have through their working years . That disconnect is creating real risks.
SIMA’s policy recommendations are outlined in a new paper entitled Canada’s Retirement Puzzle: Why Private Savings Must be at the Centre of Reform. The action plan outlines a three-pronged strategy for retirement reform centered on private savings.
1. Modernize retirement rules to reflect longer lifespans
- Raise the RRSP-to-RRIF conversion age from 71 to 73 to provide more years of tax-deferred growth
- Allow Canadians with RRIFs under $200,000 to opt out of mandatory withdrawals
2. Level the playing field for all savers
- Eliminate GST/HST on investment fund management fees
- Expand access to financial advice by supporting hybrid advice models (human and digital) and providing guidance on permissible forms of advice
3. Make saving the default
- Enable automatic enrollment, deductions, and contribution escalation in workplace group RRSP s to increase participation
- Integrate private savings education into national financial literacy programs and school curricula
Canada must seize this opportunity to modernize our savings framework, safeguarding retirement security while building a stronger, more resilient economy for decades to come.
About SIMA
SIMA empowers Canada’s investment industry. The association is the leading voice for the securities and investment management industry, which oversees approximately $4 trillion in assets for over 20 million investors. Our members—including investment fund managers, investment and mutual fund dealers, capital markets participants, and professional service providers—are committed to creating a resilient, innovative investment sector that fuels long-term economic growth and creates opportunities for all Canadians.
For more information
Christine Harminc
Director, Communications and Public Affairs
charminc@sima-amvi.ca
416-309-2313
