New laws needed to en­sure com­pa­nies don’t leave re­tirees out in the cold


ZOOMER Magazine - - ACTION - Join CARP’s Put Pen­sion­ers First cam­paign at pen­sion­ers.

CARP REP­RE­SEN­TA­TIVES blitzed Par­lia­ment Hill on Oct. 25, call­ing on the fed­eral gov­ern­ment to pro­tect re­tirees whose com­pa­nies have re­neged on their pen­sion prom­ises.

CARP’s Put Pen­sion­ers First cam­paign was staged in the wake of the re­cent Sears Canada de­ba­cle, which saw the bank­rupt com­pany try to es­cape its un­funded pen­sion obli­ga­tions to 16,000 for­mer work­ers.

“They’ve al­ready lost their health and den­tal ben­e­fits and life in­sur­ance,” says Wanda Mor­ris, CARP’s vice-pres­i­dent of ad­vo­cacy. “Now they’re wait­ing to find out how much of their pen­sion cheques will dis­ap­pear. That’s just wrong.”

Mor­ris and her team met with more than 70 MPs to lobby for leg­is­la­tion that would pre­vent the same thing hap­pen­ing in the fu­ture. “We’re ask­ing that un­funded pen­sion li­a­bil­ity be given ‘su­per pri­or­ity’ sta­tus so it goes to the front of the line,” said Mor­ris.

It’s not un­usual for com­pa­nies to take pen­sion “hol­i­days,” whereby they sus­pend pay­ments to the com­pany plan and fall be­hind in their obli­ga­tions. As a re­sult, many pub­lic and pri­vate pen- sion plans have siz­able deficits. This be­comes a huge is­sue if the com­pany de­clares bank­ruptcy – and tries to es­cape its pen­sion obli­ga­tions, leav­ing thou­sands of their re­tirees out in the cold without sta­ble re­tire­ment in­come.

When Nor­tel, In­dalex Canada, Royal Mines and Wabush Mines de­clared in­sol­vency, they slashed their pen­sions, caus­ing for­mer em­ploy­ees fi­nan­cial un­cer­tainty and hard­ship.

“Without new pro­tec­tions, more pen­sion­ers will lose their re­tire­ment se­cu­rity,” says Mor­ris.

Right now, bankers and bond hold­ers are paid in full be­fore pen­sion­ers and other un­se­cured cred­i­tors see a dime. Yet bankers have many cus­tomers and will be far less af­fected by one loss. Sim­i­larly, other cred­i­tors may stand to lose amounts owed for 60, 90 or 120 days – but pen­sion­ers are typ­i­cally owed for years or even decades of ser­vice.

“Just be­cause a com­pany fails doesn’t mean its cur­rent and fu­ture pen­sion­ers should lose their re­tire­ment se­cu­rity too,” said Mor­ris. “Laws need to change to bet­ter pro­tect pen­sion­ers.”

In an on­line pe­ti­tion that’s gar­nered more than 20,000 sig­na­tures, CARP is call­ing on the fed­eral gov­ern­ment to amend the bank­ruptcy laws so pen­sion­ers rank ahead of se­cured cred­i­tors in pri­or­ity of re­pay­ment of obli­ga­tions. And it’s lob­by­ing pro­vin­cial gov­ern­ments to make com­pany-funded pen­sion in­sur­ance manda­tory.

Fed­eral In­no­va­tion Min­is­ter Navdeep Bains ad­mit­ted the Lib­eral gov­ern­ment doesn’t have any plans to adopt leg­is­la­tion but told the CBC: “we’re en­gag­ing and we’re will­ing to work with any­one that wants to put for­ward pro­pos­als.”

In the mean­time, some politi­cians are tak­ing ac­tion. Both NDP MP Scott Du­vall and Bloc Québé­cois MP Mar­ilène Gill have re­cently tabled pri­vate mem­ber’s bills that would pro­tect pen­sion­ers if their com­pany goes bank­rupt.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.