Systematic attack on pensions

Wayne’s World

By Wayne Stetski

Happy New Year! It has been three years since Justin Trudeau said on the 2015 federal campaign trail, “Obviously the Canadian government needs to work with provincial partners and a wide range of actors to ensure that we’re doing everything we can to protect people’s pensions.”

More than two years in office and one thing has become clear: Prime Minister Trudeau is not doing enough to protect Canadians’ pensions.

Pensions really are deferred wages – you pay into them while you are working in order to be financially secure in retirement. It once was fair to assume that after a lengthy career, a hard working Canadian would have a guaranteed pension. Employers and employees contributed to a plan, and when the worker retired they knew the exact amount of the monthly payout. It was guaranteed. These pension plans are known as Defined Benefit Pension plans (DBPs).

That was until the government introduced Bill C-27 on October 19, 2016. The bill removes an employer’s legal obligations to fund their employees’ earned benefits and allows for the conversion of federally regulated DBPs to target benefit plans. Under these new target benefit plans if the stock market crashes or the pension plan’s investments underperform, it is the workers’ benefits that could be reduced or premiums increased; the employer is no longer obligated to guarantee a monthly payout amount. This change could lower benefits for both current and future retirees. The conversion will result in virtually all risk of market volatility being downloaded from the employer onto employees and retirees.

To be clear, C-27 targets employers in federally regulated businesses such as banking and railways, as well as Crown corporations. For Kootenay-Columbia this largely affects workers with Canada Post, banks, telephone systems like Telus or Shaw, Canadian Pacific and Canadian National railroads, and federal government retirees.


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CPP Indexing

Convention: 2017

WHEREAS the Canadian inflation rate is forecast at 2% by Statistics Canada for 2016, and

WHEREAS senior pension benefits are fixed with very little increase (1%), and

WHEREAS federal MP’s voted to increase their office expenses by 20% and their travel by 5%, and

WHEREAS seniors are most negatively impacted by the cost of living gap,

THEREFORE BE IT RESOLVED that the National Pensioners Federation urge the federal government to index senior pensions to the cost of living, inflation rate, only in the positive.

Submitted by USCO

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OPINION: Coming changes threaten security of Ontario’s pensioners

When employers go bankrupt, their current day misfortune can effectively reach back in time and undermine the accumulated pensions of their past employees, rocking the foundation built during working years to ensure financial stability in retirement.

If a business goes under while its pension plan is underfunded, pensioners end up losing part of the defined benefit pensions they worked a lifetime to obtain. This scenario has played out many times, with Sears Canada’s employees being the latest victims. It isn’t fair, and the situation is about to get worse.

Today, of the $246 billion in total liabilities for Ontario-regulated private sector defined benefit pension plans, $54 billion are unfunded. This week in Queen’s Park, the government is preparing to relax the rules for funding pension plans even further, allowing an additional $33 billion of liabilities to be unfunded, which will lead to more — and deeper — plan underfunding.

The idea is to help Ontario employers save by decreasing their obligation to fund their pension plans. But this saving is at the expense of the security of Ontario pensioners.

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An important petition to sign

An online petition was launched on the House of Commons website by Ms. Louisette Hinton, President of the C2V2 Retirees Coalition, and sponsored by Ms. Marjolaine Boutin-Sweet of the NDP. The purpose of this petition is to seek legislative changes from the federal government to protect our pension plans so that they are now considered priority creditors in bankruptcies and corporate restructuring.

Requesting that our pension plans be considered priority creditors in the event of bankruptcy or insolvency of employers is a claim demanded by the Canadian Labour Congress (CLC), the National Assembly of Quebec and pensioners, in particular by those who, in recent years, have been the victims of income cuts as a result of such situations. If their pension plan had been considered priority creditor, the cuts at the time could have been less. Since the adoption of various provincial legislation which have weakened our pension systems and the ensuing economic crises, it would certainly be risky to claim today that we are completely immune to such events.

You are therefore invited to sign this important petition by clicking on one of the links below and following the instructions that will appear on the screen:

In French:

In English:

or simply on Google by registering: petition e1165

• NB After providing the requested information, you will receive an automatic e-mail inviting you to confirm your signature. This confirmation must take place before your signature is counted.

• Additionally, you cannot sign a single petition more than once.

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Liberals break pension plan promise with Bill C-27

On October 19, 2016, the anniversary of the Liberal government’s election, Finance Minister Bill Morneau introduced his Target Benefit Plan (Bill C-27). It establishes a framework for target benefit pensions in the federal private sector and Crown corporations. The bill was introduced without any press release and no advance notice to unions, pension plan members or retirees, and no public consultation.

Unions and retiree groups were quick to condemn the Liberals for resurrecting the Harper Conservatives’ target benefit plan agenda, abandoned in 2014. All the major unions called on the finance minister to withdraw the bill. On February 7, 341 retirees and union members lobbied individual MPs.

In February, the finance minister put Bill C-27 on hold until May 15 and invited select unions to make submissions. No retiree groups, retirees or the public were notified or invited to make submissions despite many requests that went unanswered. Finally, on April 25, the Finance Department relented and told the National Association of Federal Retirees that submissions would be accepted until mid-May. These invitations, coming after Bill C-27 was introduced, cast doubt about the authenticity of the consultations. Changes to the pension landscape, through the introduction of a target benefit plan designed to allow employers and governments to abandon their pension promises and legal obligations, cannot be made without true, thorough public debate and consultation that includes pensioners. In a letter to select unions, the Finance Department stated, “The government is always open to hearing the views of stakeholders on its commitments and actions,” but this has not proven to be true.

Thousands of retirees and plan members wrote their MPs and received the same form response, with the words “requires individual informed consent from plan members and retirees” in bold highlighting. Consent to a target benefit plan is unlikely to be informed or freely given. Employers will reap huge benefits if plan members can be persuaded to surrender their benefits. Employers can offer perks, workplace training and promotional opportunities, improved benefits and compensation packages or simply commit to continue to invest in the operation and employee staff. Many retirees are justifiably worried about their future and do not have a deep understanding of the pension plan. Employers can also use threats: potential job losses, reduced hours of work, reduced investment, fewer workplace opportunities, scaling back benefits, and even threats of lockouts, restructures or bankruptcy, if members don’t surrender their benefits, which come with a defined benefit pension.

In 2011, the government adopted back-to-work legislation against postal workers that imposed final and binding arbitration through final offer selection and mandated that the arbitrator must consider the pension plan and could not impose any measure that would increase the deficit. The fact that Bill C-27 is ambiguous with respect to the role of unions in relation to the consent process for defined benefit plan to target benefit plan conversion is a major concern. Retirees could be faced with a fait accompli if Canada Post unions are forced to concede to consent on behalf of their members to convert the defined benefit plan into a target benefit plan, as there would no longer be anyone contributing to the defined benefit plan. The Liberal government is being dishonest in suggesting that conversion “would be by individual consent.”

On May 8, CLC President Hassan Yussuff delivered this message: “Minister Morneau, withdraw or change Bill C-27 or you will see the biggest shit fight of the century.” The solution to the pension problem in Canada, adopted by the delegates to the CLC Convention, was “to maintain the existing age of eligibility, and to increase these benefits to ensure that no one retires in poverty after a lifetime of work.”

Peter Whitaker is Central Region representative for the National Organization of Retired Postal Workers and retiree representative for CPC Pension Advisory Council.


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