The Canadian government is considering a new law that would allow changes to the pension plans of people working for federally regulated companies such as Crown corporations, banks and those in the communications sector. The labour movement sees this as part of a broader trend to reduce employers’ financial obligations and one that will result in more insecurity for pensioners.
“Under a defined-benefit plan right now, the employer makes a commitment that this is what your pension would be when you retire. And the pension they deliver is (based on) the promise that was made,” says Hassan Yussuff, president of the Canadian Labour Congress.
Benefits could be reduced
“In (the proposed) target-benefit plan, that is never the reality. If the plan does not have the assets there is no way for the employer to meet that obligation. If the plan is in trouble, the employer has no responsibility to put additional money.
“(Then) the workers are simply having to do two things: either increase their premium or cut the benefit that people are going to have. So, it really makes it quite difficult for people to have some security in their retirement because they never know what is likely to happen to the assets of their pension plan.”
ListenCivil servants would be next, says union leader
Yussuf thinks that if this Bill C-27 becomes law the next step will be for the government to take steps to change the pension plans of its own civil servants. The union representing them, the Public Service Alliance of Canada, sees this danger too and has vowed to fight the legislation along with other unions.
Several employers have already tried to change their employees’ pension plans. Police officers in the city of Montreal are wearing non-uniform camouflage pants as a pressure tactic protesting similar proposed changes. Canada Post employees rejected pension plan changes in July 2016 and averted a work stoppage by putting the issue off for the duration of the current labour agreement.
‘A devastating impact’
The trend is worrisome and Yussuf says it is important to fight it on several fronts besides opposing Bill C-27.
“We’re very fearful this is going to have a devastating impact on retirees.”
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