retirement plans | The common front for pension fund protection

(Ottawa) The three main opposition parties have introduced bills in the House of Commons to keep workers’ pension funds in case the company goes bankrupt. Now that the New Democratic Party supports the Liberal government, would any of these bills have a better chance of being passed?

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Milen Crete

Milen Crete

Claude Senchal had been in retirement for 12 years when Sears filed for bankruptcy in 2017. Overnight, his monthly pension was reduced by 30%. He also lost all the benefits the company guaranteed him when he retired: life insurance, dental insurance, vision insurance, and medical insurance.

“In the case of a retiree who is 65 or older, you can’t override it,” he notes. It is impossible. You have to agree to tighten your belt and live with less. »

In October 2017, 3,100 Sears retirees, who benefited from a defined benefit plan, were in this status in Quebec. The liquidation of the company’s assets reduced the income losses to 14%. For some, this loss is still very painful.

Photo by Alain Roberge, Press Archives

Claude Senchal, retired from Sears

I know people between the ages of 70 and 72 who go back to working 15 hours a week for a little extra income. When I worked for 35 years at the same company, I find it inhumane. It does not make sense!

Claude Senchal, retired from Sears

In an open letter in March, a number of groups, including the Canadian Federation of Retired Persons and Réseau FADOQ, urged the Liberal government to pass legislation to protect retirement plans. They pointed out that “pensions are deferred wages.”

Compatibility in opposition

The Conservative Party, the Quebec Bloc and the New Democratic Party have all introduced bills in the House of Commons to prevent others from living in such a nightmare. Pensioners are among the last creditors to be compensated in the event of a company’s bankruptcy. They do not benefit from any special status, unlike banks that pay first.

“Pensioners are not represented among priority creditors in the same way as municipal taxes,” explains Bloc Québécois MP Marilyn Gill. This is its third attempt since 2015. The previous bill to correct this situation reached the stage of parliamentary committees in the last parliament, before dying on the order paper after calling for elections.

Photo by Oliver Jane, press archives

Marilyn Gill, Representative for Manikoagan

“Just last year in June, all the groups supporting the bill covered 3.5 million people in Canada,” she says. For me, it was important. Show that there is a need for the population. »

The legislation you’re now proposing includes compensation for group insurance loss. Rep. Daniel Blakely, NDP MP’s bill, goes even further by requiring that these insurances be kept in full and retirees paid first, before the banks. It also requires pension funds to submit regular reports to the office of the Superintendent of Financial Institutions so that action can be taken quickly if they are underfunded.

The goal is to have a well-funded retirement plan where liabilities are not allowed to grow. And if there is one at the time of bankruptcy, retirees have a higher repayment priority.

Daniel Blake, MPP for Elmwood-Transcona

Governor Marilyn Glado also suggests retirees be among the priority creditors in bankruptcy — not the first — but her bill doesn’t contain anything for group insurance. “It’s a huge, uncertain cost,” she justifies.

However, his bill will provide insurance that guarantees up to $2,000 per worker and allows the underfunded pension fund to be transferred to another pension plan. You have already reached the second reading.

Necessary concessions

If there is a consensus among the three opposition parties to give priority to retirees in the event of bankruptcy, they will have to make concessions to settle the case once and for all. “We’ve been trying to get a bill on this for 10 years, so it’s time to decide what we can agree on,” says Marilyn Glado.

PHOTO ADRIAN WYLD, Canadian Press Archives

Marilyn Gladeau, Member of Parliament for Sarnia Lambton

Ontario race member Sarnia Lambton says she’s open to modifications, but doesn’t want to stoop over the issue of group insurance, which Conservatives and Liberals will not accept.

Protecting pension funds is not part of the agreement between Justin Trudeau’s government and the National Democratic Party, but Daniel Blakely still hopes to pass a bill.

“I remain optimistic – not that the government might be willing to do something about this issue – but that there might be a way to find consensus on the opposition seats, he says – it is. We really just need a majority in the House of Commons.”

So a bill can be passed without the support of the government, which does not hold a majority of seats. The fact remains that the two sides may find it difficult to agree.

Even if invited, Danielle Blake was evident in his absence on Monday at a joint news conference of Marilyn Glado and Marilyn Gill who called for a cross-party effort.

Also absent was Backbencher Ryan Turnbull, who sponsored a petition on pension fund protections, despite trying to persuade fellow Liberal Caucus to move forward.

“In the end, if we don’t do it now, we never will,” said Dominique Lemieux, director of the Quebec Steelworkers Union, who was present at the press conference.

The Minister of Innovation, Science and Industry, François-Philippe Champagne, does not close the door. “We all agree that pensions should benefit from greater protection measures,” his press secretary Laurie Bouchard said in writing. ” […] In particular, we want to avoid negative and unexpected consequences for businesses, workers and retirees. »

Compulsory payment of benefits can, for example, make a bankrupt company less attractive to takeover.

It’s too late for Sears retirees like Claude Senchal, but he intends to continue to lead the fight. “It’s not because we’re no longer directly involved that we’re going to drop the ball,” he concludes.

When insurance makes all the difference

Hundreds of retirees from Groupe Capitales Médias are not all created equal. Those who worked in the journal right They will be able to recoup most of their retirement income loss after restructuring the company in 2019. Ontario offers an insurance plan to guarantee benefits in the event of bankruptcy, which Quebec does not have.


Demonstration for Groupe Capitales Médias retirees in Montreal in 2019

notes Pierre Gauri, who was a newspaper writer straight Until 2020. Like many, he wasn’t aware of the existence of the Pension Benefit Guarantee Fund (PBGF) until he needed it.

Among the six dailies of Groupe Capitales Médias, right It was his pension fund that suffered the biggest losses. Employees lost 28% of their defined benefit plan. Pierre Jury expects to recover nearly all of this deficiency next fall.

Pierre Belchat, retired from Sun, Completely different. His retirement income has been cut by 22% since 2020. “The horrific thing is that we contributed and played the rules of the game, he trusts. Then someone decides overnight that it’s over. You had $100,000 in your bank account, you only had $75,000 left and you didn’t You have another opinion.”

Pensioners several years ago campaigned for the Quebec government to create insurance that would guarantee the benefits of retirement funds in the event of bankruptcy, such as the one in Ontario.

PBGF has been around since 1980 and is managed by the Ontario Financial Services Regulatory Authority. Guarantees your first $1,500 in monthly interest.

“It is another type of protection that does not require any contribution from the government,” explains Jean-Paul Joannis, trustee of the Canadian Federation of Retired Persons. In Ontario, the fund is entirely funded by companies that offer defined benefit plans. It was worth about $1.2 billion in 2021, according to its latest annual report.

Quebec still needs to be convinced

Despite their letters, demonstrations and press conferences, the retirees failed to impress Finance Minister Eric Girard. He fears this will speed up the “decline of defined benefit plans”. However, a meeting between the group of retirees and employees of his company is scheduled for May 13.

“We are very sensitive to the situation of retirees,” he said in his speech. On the other hand, any guarantee fund similar to an Ontario fund involves a significant additional cost to all participants in all plans. He argues that Law 68 of December 2020 to allow targeted benefit plans gives retirees new options to transfer their assets when their pension fund is at risk.

Pierre Belchat and Jean-Paul Joannis do not give up. They hope to make all political parties aware of their cause in anticipation of the upcoming election campaign. They will also have to convince the unions, who are afraid to lose some of the money that would normally go to the envelope in order to renew collective agreements.

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  • 484
    Number of defined benefit plans in Quebec

    Source: Retirement in Quebec

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