Pension plans | Common front to protect pension funds

(Ottawa) The three main opposition parties have filed all bills in the House of Commons to keep workers ’pension funds in case the company goes bankrupt. Now that the New Democratic Party (NDP) supports the Liberal government, is there a better chance of passing any of these bills?

Posted at 5:00 am

Mylene Crete

Mylene Crete
The Press

Claude Sénéchal retired 12 years ago when Sears declared bankruptcy in 2017. Overnight, his monthly pension was reduced by 30%. He also lost all the benefits the company guaranteed him when he retired: life insurance, dental insurance, vision and medical insurance.

“In the case of a retiree aged 65 and over, you can’t get past it,” he said. It’s impossible. You need to agree to tighten your belt and live less. »

In October 2017, 3,100 Sears retirees, who benefited from a defined benefit plan, were in this situation in Quebec. The liquidation of the company’s assets reduced their loss of revenue, which is now 14%. For some, this loss is still painful.


Claude Sénéchal, retired from Sears

I know people aged 70-72 who go back to work 15 hours a week to earn a little extra income. When you worked 35 years for the same company, I found it inhumane. It doesn’t make sense!

Claude Sénéchal, retired from Sears

In an open letter in March, several groups, including the Canadian Federation of Pensioners and Réseau FADOQ, urged the Liberal government to pass legislation to protect pension plans. “Pensions are deferred wages,” they recall.

Agreed in opposition

The Conservative Party, the Bloc Québécois and the New Democratic Party have all filed bills in the House of Commons to prevent other people from living in such a nightmare. Retirees are among the last creditors to be paid in the event of a company’s bankruptcy. They do not benefit from any special status, unlike banks that pay first.

“Retirees are not represented with priority creditors in the same way as municipal taxes,” explains Bloc Québécois MP Marilène Gill. This is its third attempt since 2015. Its earlier bill to correct this situation reached the parliamentary committee stage in the last Parliament, before dying on the order paper after the election was called. .


Marilène Gill, MP for Manicouagan

“Last year alone in June, all the groups supporting the bill covered 3.5 million people in Canada,” he said. For me, this is significant. This showed that there was a need for the population. »

The law he is proposing today includes compensation for the loss of group insurance. NDP MP Daniel Blaikie’s bill does more by requiring that these insurances be maintained explicitly and that retirees be paid first, before banks. It also requires pension funds to report regularly to the Office of the Superintendent of Financial Institutions to take quick action if they are underfunded.

The goal is to have a well -funded retirement plan where responsibilities are not allowed to grow. And if there is one at the time of a bankruptcy, retirees have a higher payment priority.

Daniel Blaikie, MPP for Elmwood – Transcona

Conservative Marilyn Gladu also suggests that retirees are among the priority lenders in case of bankruptcy – not the first – but her bill for group insurance is empty. “It’s a huge cost that’s uncertain,” she justifies.

His bill, however, would provide insurance that would guarantee up to $ 2,000 per worker and allow a deficient pension fund to be transferred to another pension plan. It has reached the second reading.

Necessary compromises

If the three opposition parties agree to give priority to retirees in case they go bankrupt, they will have to compromise to fix the issue once and for all. “We’ve been trying to get a bill on this topic for 10 years, so it’s time to decide what we can agree on,” Marilyn Gladu said.


Marilyn Gladu, MP for Sarnia – Lambton

The member for Ontario riding Sarnia – Lambton said he was open to changes, but did not want to bow to the issue of group insurance, which the Conservatives and the Liberals would not accept.

The protection of pension funds is not part of the agreement between Justin Trudeau’s government and the NDP, but Daniel Blaikie still hopes a bill will be adopted.

“I’m still hopeful – not that the government may be willing to do something about the issue – but there may be a way to find a consensus with the opposition banks,” he said. “We just really need a majority in the House.” of Commons. »

One of the bills could pass without government support, which does not hold a majority of seats. The fact remains that the parties may find it difficult to agree.

Although he was invited, Daniel Blaikie was notable in his absence on Monday at a joint press conference by Marilyn Gladu and Marilène Gill calling for a transpartisan effort.

Backbencher Ryan Turnbull, who sponsored the petition to protect pension funds, was also absent, despite efforts to convince his colleagues in the Liberal caucus to move forward.

“Ultimately, if we don’t do it now, we won’t do it,” said Steelworkers union’s Quebec director Dominic Lemieux, who was present at the press conference.

The Minister of Innovation, Science and Industry, François-Philippe Champagne, does not close the door. “We all agree that pensions should benefit from more protections,” his press secretary Laurie Bouchard said, in writing. ” […] In particular, we want to avoid the adverse and unintended consequences that businesses, workers and retirees may experience. »

Forced payment of benefits can, for example, make a bankruptcy company less attractive for acquisition.

It’s all too late for Sears retirees like Claude Sénéchal, but he intends to continue to lead the fight. “It’s not because we’re not directly involved anymore so we’re going to drop the ball,” he concluded.

When insurance makes all the difference

Hundreds of retirees from Groupe Capitales Médias are not all equal. Those who worked for every day That’s right will recover most of the loss of their retirement income after the company’s restructuring in 2019. Ontario offers an insurance plan to guarantee benefits in the event of bankruptcy, which is not available in Quebec.


Demonstration of Groupe Capitales Médias retirees, in Montreal, in 2019

“It’s one of the great benefits we enjoy in Ontario, an advantage we don’t suspect,” said Pierre Jury, a columnist at Diretso until 2020. Like many, he did not know of the existence of the Pension Benefits Guarantee Fund (PBGF) until he needed it.

In the six daily newspapers of Groupe Capitales Médias, That’s right is the one whose pension fund has suffered the largest losses. Employees lost 28% of their defined benefit plan. Pierre Jury expects to make up for almost all of these shortcomings next fall.

The situation of Pierre Pelchat, a retiree from Day, is somewhat different. His retirement income has decreased by 22% since 2020. “Shockingly, we contributed and we played the rules of the game, he confides. Then, one overnight decided it was done. You have $ 100,000 in your bank account, you have $ 75,000 left and you have nothing more to say. »

Retirees have been campaigning for years for the Quebec government to create insurance that will guarantee the benefits of pension funds in the event of bankruptcy, as exists in Ontario.

The PBGF has existed since 1980 and is administered by the Financial Services Regulatory Authority of Ontario. This guarantees the first $ 1,500 of monthly benefits.

“It’s a kind of protection that doesn’t require any contribution from the government,” explained Jean-Paul Joanisse, treasurer of the Canadian Federation of Pensioners. In Ontario, the fund is fully funded by companies offering specified benefit plans. Its value will reach nearly $ 1.2 billion in 2021, according to its latest annual report.

Quebec remains convinced

Despite their letters, their demonstrations and their press conferences, the pensioners failed to convince the Minister of Finance, Eric Girard. He fears it will accelerate the “reduction of defined benefit plans”. However, a meeting is scheduled between the group of retirees and employees of his company on May 13.

“We are very sensitive to the situation of retirees,” he said in writing. On the other hand, a guarantee fund similar to the Ontario one would imply a substantial additional cost for all participants in all plans. He argues that Law 68 passed in December 2020 to allow targeted benefit plans provides new options for retirees to transfer their assets when their pension fund is at risk.

Pierre Pelchat and Jean-Paul Joanisse do not give up. They hope to sensitize all political parties to their goal as a prospect in the next election campaign. They will also need to convince unions, which are afraid of losing some of the money that usually goes in the envelope for renewing collective agreements.

Learn more

  • 484
    Number of defined benefit plans in Quebec

    Source: Retirement Quebec

Leave a Comment