PIPSC defends retirement security
Bill C-27, an Act to amend the Pension Benefits Standards Act, 1985 was introduced in Parliament by Finance Minister, Bill Morneau on October 19, 2016 for first reading. Like a similar proposal made less than two years ago by the Conservative government, Bill C-27 would substantially expand the ability of federally regulated employers to offer target benefit pension plans, a type of pension plan that provides a much lower level of security and predictability to members than defined benefit plans.
This proposed legislation is deeply troubling to the Professional Institute of the Public Service of Canada (PIPSC) as it could pave the way for federally regulated employers to erode pension security and shift risks from employers to employees by replacing defined benefit pension plans with target benefit plans. As well, this legislation could signal that the Liberal government is also considering similar action with respect to the Public Service Superannuation Plan.
While many of the provisions of the proposed legislation are problematic in that they are confusing, unclear or uncertain, the real difficulty with Bill C-27 is that it provides a path for federally regulated employers to move away from defined benefit pension plans which represent the most secure and predictable type of pension plan to a less secure model of pension plan. It also deflects from the real issue, which is that most Canadians do not belong to any kind of pension plan, and are not saving enough to allow for all Canadians to retire with dignity. PIPSC intends to oppose this proposed legislation and instead will encourage the Liberal government to focus its energies on creating a legislative and economic environment in which defined benefit pension plans can thrive.