Income Tax Act

The Income Tax Act currently places limits on the maximum amount that can be contributed to a registered pension plan.  In general terms the Income Tax Act eliminates the ability to contribute to a registered pension plan that has a surplus of more than 10 percent.  The elimination of contributions is often referred to as a “Contribution Holiday”.

Such actions can seriously undermine the pension plan and should not be allowed.  The Ontario Government should support changes to the Income Tax Act to reduce the requirement and opportunity for employers to take Contribution Holidays.

Vesting

Statistics tell us that workers in Ontario are changing their jobs more and more frequently.  Yet, it has been 15 years since Ontario’s law on pension vesting has been changed.

The OFL believes that the PBA should be amended from requiring vesting after two years, to require immediate vesting when an employee joins a pension plan.

4. Joint Trusteeship – The Struggle Continues

For the labour movement in Ontario, the last two decades have brought significant victories in the area of pension plan governance.  The largest sources of institutional capital in Ontario, outside of the banking sector, are now directed in part by trustees representing unionized workers.

Not surprisingly, however, there is a long way to go to achieve our goals.  In many cases, unions are still fighting for joint trusteeship.  Despite the fact that joint trusteeship has improved pension plan administration, the Ontario Government has still not followed the lead of other jurisdictions in mandating shared trusteeship.

The Role of the Labour Trustee

A trustee in law is a person who must behave prudently with respect to the funds he or she oversees and be loyal to the interests of the members of the plan.  This does not mean that trustees cannot or should not take their beliefs and principles into account when making decisions, but that this decision-making process must, at all times, be supported by independent advice.

5. Socially Responsible Investment

Key to any investment program is the role that investments and returns play in securing benefits. 
Yet there is more to pension benefits than investment returns.  One of the historic goals of the labour movement has been to counteract and address the fundamental inequalities that run through our society and economy. The possibility that our deferred wages could support our efforts to win social justice at the bargaining table and in civil society has always been an exciting part of the drive towards joint trusteeship.

Socially Responsible Investment (SRI) is supported by the labour movement.  It is an approach to investment strategy that integrates financial and ethical concerns.