Bill C-27 An Act to amend the Pension Benefits Standards Act, 1985 was introduced into the Canadian House of Commons on October 19th last year.
|The bill was introduced without any notice or consultation with pensioners or unions. It contains measures that directly contradict election promises made by the Liberals. As a Digital Journal article last November noted: "The Liberal government's Minister of Finance, Bill Morneau, tabled a bill this week that would allow Crown corporations and federal private-sector employers to back out of defined-benefit entitlements they agree to." The Liberals in their election campaign vowed that they would improve retirement security for Canadians. They do this by replacing a defined benefits plan(DBP) that ensures that a certain benefit be paid. Wikipedia says of a DPB:|
A defined benefit pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum (or combination thereof) on retirement that is predetermined by a formula based on the employee's earnings history, tenure of service and age, rather than depending directly on individual investment returns.
" It will set the new standard for pension reform across the country, and it will accelerate the erosion of decent pensions in both the private and public sectors. Employers and the pension industry are paying close attention to Bill C-27 for this very reason. If the federal government signals that employers in one sector are no longer legally required to live up to their pension promise to workers and retirees, employers everywhere will demand the same treatment."
The Target Benefit "Shared Risk" pension plan proposal contained in Bill C-27 is not the solution to create a secure and sustainable pension for retirees. Target benefit plans will have the effect of watering down existing DB plans. Governments and companies that currently offer DB plans will be encouraged to adopt TB plans that will cost employers less while offering workers less and taking all the risks.