Evidence of Inadequacy

Report on Business is reporting today the release of a new study by the C.D. Howe Institute calling for the creation of yet another government administered pension plan. The premise of the report's recommendation is that not enough Canadians have access to an employer sponsored pension plan and, of those who do not, many are not utilizing the savings vehicles in place to provide for post retirement income, such as RRSPs and the like. The position the report holds is that the managed money world (mutual funds, etc.) is fraught with high fees, which erode investors' returns, thus hampering their ability to accumulate sufficient retirement assets.

So, the moral of the story is that not enough people are saving money to fund their retirements. The C.D. Howe Institute obviously sees this as being detrimental to the future health of Canada's economic environment, and therefore is calling for government intervention.

Though I most certainly agree that not enough people are saving enough money for themselves, robbing from their future to finance their todays, I have a difficult time with accepting that the government should step in to save people from their own lack of foresight.

Do I believe that there are some outrageous fees out there? Yes. I think that there are a number of mutual fund companies that are charging fees that do not adequately reflect the value they're providing to individual investors. However, I do not believe that having the government step in and take over the business of managing retirement money for Canadians is an appropriate response to the issue. Perhaps enhancing the regulations on money managers with respect to how they levy fees might be a more measured and appropriate response.

How do you feel? Should the government be stepping in to save us all from ourselves, or does the responsibility for a happy retirement lie on the shoulders of the individual? I'd be interested to hear your comments.