2. Benefit Security

There is no doubt that the stock market slide and declining interest rates have increased the cost of maintaining our pension plans.  Pension improvements are more expensive and much harder to negotiate.  That is not good news, but it is not a crisis either.

The stock market performance and declining interest rates show that the legislative changes we have been lobbying for continue to be important.

In order to enhance benefit security we must continue to fight for the following improvements.

3. Improving Pension Standards

Inflation Protection Through Indexing

The indexing of pensions is one of the most serious issues facing retirees and fundamental to the right of workers to retire in security and dignity.  Many private pensions are either not indexed or not fully indexed.

Ontario Pension Benefits Guarantee Fund

This fund is important as it covers employees within defined benefit plans where pension income has been lost due to plan underfunding or employer insolvency.

The Pension Benefits Guarantee Fund (PBGF) currently provides for a benefit guarantee only to a maximum of $1,000 per month, an amount unchanged from 1988.  The failure to raise the cap has made the current Ontario PBGF benefits grossly inadequate.

Pension Benefits Act

Ontario Pension Benefit Act (PBA) Regulation 5.1 allows employers who administer pension plans with assets greater than $500 million, who are deemed too big to fail, to waive the solvency funding requirements under the Act if they make an additional contribution to the PBGF.

Stelco was granted this option in 1996 and was able to divert millions in otherwise required pension contributions into company general revenue, putting their workers’ pensions at much greater risk.  Regulation 5.1 should be completely repealed.

Bankruptcy

Every week dozens of companies declare bankruptcy and close down.  Workers pay the price when workplaces shutdown, especially when the closure is triggered by bankruptcy.  Not only do workers lose their jobs and their source of income, they often lose wages which are owed but not yet paid, as well as vacation pay, termination pay and severance pay.

The labour movement supports legislative changes which, if adopted, will provide working men and women with greater protection against loss and the real opportunity to recover what they are owed.