As shown by the World Bank report, authored by Common Wealth, and the Brookings Institution session, there is a growing interest in the Canadian model. Key to the success of that model in delivering the pension promise is a focus on results for members, says Mazer.
“I think the key thing is having different stakeholders working together in a way that serves the interests of members, and where everybody’s incentives are aligned around serving those interests.”
This happens in a variety of ways, he adds, including good governance, internal professional teams, and a regulatory environment that trusts the plans’ governance structures. That trust did not “happen overnight, it had to be built over time … through the performance and continued improvement of these plans.”
With a lot of retirement arrangements around the world, incentives are aligned around the interests of the shareholders or the companies that are delivering the retirement product, not around the interests of the members, says Mazer.
“And you get outcomes that are much, much worse for the members and much, much better for the shareholders … at the end of the day it’s those incentives that really make the difference in the Canadian model.”