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Of course, companies didn't help themselves by taking contribution holidays while their pension plan returns were high, or making shoddy investments while stock markets dwindled, leaving plans underfunded.
Ian Robertson, president of the Vancouver Society of Financial Analysts, thinks corporate pensions will be a major topic this year.
"I believe we will see, again this year, issues with defined benefit pension plans," said Robertson.
"And I think a central policy issue will be whether companies will want to continue to bear all the risk of a defined benefit plan, or whether we will see some shift towards employees sharing the risk, for example with defined contribution plans."
But defined contribution plans, where benefits vary according to how a member invests in stocks, bonds and money market instruments, may be no more secure.
Earlier this month, SEI Investments Canada released results of a survey of defined contribution pension plan sponsors, who worry they will face litigation because they haven't educated plan members well enough.
They suggest getting members outside investment help.
"Sponsors are only beginning to realize the importance of tying their existing, in-house educational efforts with credible, third-party investment advice," said Patrick Walsh, president of SEI.
The sponsors feel only 43 per cent of their pension plan members will be able to retire when they want to, 38 per cent will have enough money to retire on, and only 26 per cent are actively involved in decision-making for their retirement planning.
Some companies have already shifted to offering group RRSPs. But RRSPs are not tax avoidance plans, merely tax deferral plans. Once you withdraw RRSP funds, except for the Home Buyers' Plan or Lifelong Learning Plan, you are taxed on 100 per cent of the withdrawal.
And ever since the federal government reduced the capital gains inclusion rate twice in 2000, from 75 to 50 per cent, the debate has raged whether a person is better off paying tax on 50 per cent of gains along the way in a non-registered plan.
The consensus among tax and financial experts is to make the RRSP contribution first, but also contribute to a non-registered plan if you can.
That sets the stage for Tax Prepaid Savings Plans, first proposed by the C.D. Howe Institute in 2001, and now the subject of consultations organized by the federal government.
An RRSP offers upfront tax deductions and allows the investment to grow tax-free, until money is withdrawn. Conversely, with a TPSP there is no tax break on contributions, but the growth is tax-free, and no tax is paid on withdrawals.
Depending on how they're structured, TPSPs would benefit low-income workers who don't get much of a break from RRSPs, seniors who otherwise withdraw money from RRSPs and incur clawbacks of government benefits like Old Age Security, as well as people who have used up their RRSP contribution room.
"Investors spend too much time on selecting investments and too little time on establishing investment policies and strategies," said Adrian Mastracci, investment counsel at Vancouver's KCM Wealth Management. "Too often, this results in a collection of flavour-of-the-day investments.
"Registered accounts have become sizable. For many investors, notably the self-employed, the RRSP is a replacement for a pension. But consider the RRSP/RRIF as part of the big picture, not in isolation."
It's a big picture that keeps getting more and more fuzzy.
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