In a submission to Finance Minister Bill Morneau, PSAC has laid out its objections to a bill that threatens the retirement security of Canadians.
“Bill C-27 essentially gives employers the opportunity to replace defined benefit pension plans, which provide secure and predictable retirement income, with less secure target benefit pension plans,” said PSAC National President Robyn Benson. “The government should be working to expand retirement security for Canadians, not threaten it.”
Bill C-27 presents real risks to employees and pensioners
If the bill becomes law, it will
- Allow good pension plans to be converted to plans that provide unreliable benefits
- Allow employers to reduce pension benefits, even retroactively
- Shift most if not all the financial risk to employees and pensioners
- Be complex and expensive to administer
There are better ways address problems with pension plans
PSAC pointed out to the Finance Minister several ways to reform the current Pension Benefits Standards Act.
The Act could be changed to:
- Allow for jointly sponsored defined benefit pension plans. These are the most successful form of pension plan in Canada and would help smaller pension plans survive.
- Set up a public pension insurance arrangement that would protect benefit security in those plans that do fail, instead of burdening the system with unnecessarily expensive funding requirements.
PSAC members affected by Bill C-27
Over 10,500 PSAC members could be affected immediately by the bill. They include members at Canada Post and Purolator, NAV CANADA, airport and port authorities, employees of First Nations, support services on military bases, the Bank of Canada, the Dominion Diamond Corporation, and various bargaining units in the Yukon and Northwest Territories.