TORONTO — An easily accessible defined contribution plan available to all employers, including the self-employed, was touted by a senior Sun Life Financial (TSX:SLF) executive Tuesday as a means for greatly increasing pension coverage among Canadians.

“With three to five million Canadians not having access to an occupational pension plan, we need to improve the retirement, savings and income system in Canada,” Tom Reid, senior vice-president for group retirement services, said in remarks prepared for the Annual Pension Summit sponsored by the Canadian Pension & Benefits Institute.

Under the proposal, Reid says employers who decided to join the multi-employer DC plan he envisages would select a qualified provider and all the firm’s employees would automatically be enrolled.

“While employers could opt out for their own business reasons, we think that employment market pressures, the gentle push of automatic enrolment (which has proven to be an overwhelming success in other countries) and low fees will lead to widespread participation,” he said.

Reid said Canadian group plans, on average, pay lower fees to their pension plan providers than those in the United States which average 93 basis points compared with 60 to 70 basis points across Sun Life’s Canadian group retirement business.

“While there are many factors that will determine the precise cost of the proposed solution, such as participation rates, annual deposits and asset balances, . . .a multi-employer DC pension plan will achieve the same scale advantages that larger employers enjoy today,” he said.

While there have also been suggestions for expanding government-run plans, Reid said he believes a private sector solution is the right one for solving the current shortfall in retirement savings.

He said Canadian providers for workplace retirement savings plans have a proven track record, technology and operating systems.

“They also have the distribution network to reach small and mid-size employers, and the motivation to help expand coverage,” he said.

“If we can knock down the barriers preventing multi-employer plans, do we really need to build a new government-run retirement investment program?”

Sun Life Financial is an international financial services organization providing a diverse range of insurance and financial products for individuals and corporate customers.

As of Sept 30, 2009, the Sun Life Financial group of companies operating in North America, Europe and Asia, had total assets under management of $412 billion.

Sun Life shares were up three cents at $29.27 Tuesday on the Toronto Stock Exchange.