Insufficient budget measures for private pension schemes
TORONTO – Lobbies have lamented that the last federal budget does not go far enough to protect private pension plan members. They urge all federal parties to propose more protections when they present their election platform for the general election in October.
C ome require a new national insurance program – to be funded by employers – which will aim to fill the deficits of any unfunded pension plan if its members can not be paid in full or if the company ceases to exist.
According to Michael Powell, President of the Canadian Federation of Retirees, the ideal would be to see Ottawa and the ten-province governments join hands to create a unique program in Canada.
At the same time, he regrets that federal officials “do not really like the idea,” because they think there is not a large enough pool of capital to support such a program at the national level.
Some private pension plans are regulated by the provinces. As a result, more defined benefit plans in Canada are under Ontario jurisdiction.
Mr. Powell recognizes that few private plans have failed in their obligations to Canadian retirees. Among them are the best-known cases: Sears Canada and Nortel Networks.
“I agree: it’s a very small number of companies. Why can not we solve this problem? he asked. Why can not we sit down and find a solution to this problem so that retirees are not at a disadvantage when their business goes through a period of insolvency? ”
Finance Minister Bill Morneau has included some measures in his budget, but the Canadian Federation of Retirees, the National Pensioners Federation and their allies say that it does not adequately address the issue of unfunded plans.
“We were pleased that a number of our core demands were selected,” said Laura Tamblyn Watts, Director of Public Policy at the Canadian Association of Retired Persons (CARP). However, we really hope to have a pension insurance plan covering 100% of pension liabilities. And this funding should be entirely the responsibility of the promoters. ”
Trish McAuliffe, President of the National Pensioners Federation, is concerned that Ontario’s pension benefit guarantee fund may be insufficient for the entire country.
On the one hand, small provinces do not have the resources to guarantee such a fund; on the other hand, even the Ontario plan provides a ceiling on amounts paid monthly to retirees of an insolvent company.
“It’s a very complex system, ” says McAuliffe. We would like to see the federal government open the road and go beyond the boundaries of jurisdiction to ensure that legislation is better harmonized. “