cover image: IM_Bauslaugh_2022_1207_new.pub

20.500.12592/8f3sx9

IM_Bauslaugh_2022_1207_new.pub

9 Dec 2022

Our pension system has been affirmed several times by the Supreme Court of Canada as a “carefully calibrated legislative and regulatory scheme.” It is one that “evinces a special solicitude for employees affected by plant closures” and one that “seeks to strike a delicate balance between the interests of employers and employees, while advancing the public interest in a thriving private pension sys. [...] What about adopting procedures for dealing with the plans of bankrupt employers that gives the plan itself a chance to recover rather, than locking in losses? This is the approach taken with the Stelco Plans in Ontario. [...] Defined benefit plans are already in decline because employers bear the financial risk that funding will be enough to support a pension that is defined in advance of payment. [...] This will include increased security guarantees to rank ahead or equal with the pension liabilities, imposition of higher borrowing costs, insistence on full, rather than provisional funding of accruing liabilities, and many will just require the employer to give up its defined benefit pension plan. [...] This may force many employers that provide defined benefit plans to close their pension arrangements or move to group RRSPs or similar defined contribution plans that transfer all financial risk to members with lower future benefit accruals.

Authors

lmalyk

Pages
1
Published in
Canada