A leading investment industry group is calling for policy changes to update Canada’s retirement income system, warning that without reforms, many Canadians may fall short of what they need in retirement.

In a report released Wednesday, the Securities and Investment Management Association (SIMA) said that the current retirement income system hasn’t kept pace with longer lifespans, higher living costs and the decline of workplace pensions.

To address these issues, the group recommends policy changes aimed at supporting private savings, including raising the age at which Canadians must convert their registered retirement savings plans into registered retirement income fund accounts and removing GST/HST on investment fund management fees.

“Private savings will really be the backbone of people’s retirement income in the future,” said Andy Mitchell, president and CEO of SIMA in an interview. “We just think [policy] hasn’t been updated or thought about in a couple of decades. Obviously, life has changed for Canadians quite a bit during that period.”

SIMA, which rebranded in March from the Investment Funds Institute of Canada (IFIC), has a membership that manages over 80 per cent of Canadian mutual fund and exchange-traded fund assets under management.

Private savings made up nearly half of retirement income in 2023, up from 36 per cent in 2005, the report found, based on Statistics Canada data. Canadians hold more than $4.5-trillion in RRSPs, tax-free savings accounts and other investments. That marks a major departure from the retirement income system’s intended balance of three pillars: government-sponsored programs, such as the Canada Pension Plan and Old Age Security, workplace pensions, and individual private savings.

While private savings are filling more of the gap, they are harder for many households to build. More than 60 per cent of Canadian workers lack a traditional workplace pension, leaving individuals to save on their own at a time when inflation and housing costs are squeezing disposable income. Even monthly maximum CPP and OAS payments at age 65 provide only about $1,433 and $735, respectively, as of 2025, an amount too low to sustain a comfortable standard of living in many regions.

To address these challenges, SIMA put forward policy recommendations aimed at building private savings, including raising the minimum age Canadians have to convert their RRSPs into a RRIF from 71 to 73 to give more years of tax-deferred growth and to exempt accounts under $200,000 from mandatory RRIF withdrawals. The group also recommends removing GST/HST on investment fund management fees, expanding access to financial advice through hybrid digital–human models, and making workplace RRSPs more effective by automatically enrolling workers.

Mr. Mitchell said the RRIF withdrawal changes are the most realistic first recommendation for the government to implement, since Ottawa has discussed similar changes in the past, and would still receive tax revenue from withdrawals, just later on. Without reforms, he warned, “the burden falls on the Canadian federal government to look after retirees.”

The report also argues that encouraging private savings is good for the economy as a whole. In 2023, private savings contributed an estimated $150-billion to GDP, generated $27-billion in tax revenue, and helped the government save $16.5-billion in guaranteed income supplement payments, the report found

Its recommendations, Mr. Mitchell said, reflect the concerns of its members. “We are the voice of those members,” he said. “They are asking for these changes.”

While the proposals are pitched as being in Canadians’ best interest, Mr. Mitchell acknowledged they would also benefit the industry.

“More assets flow into funds and ETFs. The companies that manufacture those products and build those solutions for Canadian investors will benefit through growth of their vehicles,” he said. “It’s mutually beneficial.”