While it is tempting to just tune out the discord and constant whining from everyone in the news these days, it is important to remember our incomes are mainly dependent on one source now, and if that changes we have very few alternatives. Some of the uproar in the news comes from concern over government finances and falls into the pension forum. It is in that area that we, the ONPA, try to keep you informed.
In an article written by Jana Steele in Oct 2013, Ms. Steele lists the provinces that have started Pension Reform in their jurisdictions. Financial and political pressures have changed reform to include retirees, whose benefits were previously off-limits and reductions were considered unfair. As the Conservative government in New Brunswick found out, crossing those limits can have dire consequences for governing parties, when the opposition seizes on political opportunity. The issue in New Brunswick is far from resolved, but it is clear it has caught the public’s, and the government’s, attention. Since that article was written, other provinces like British Columbia, Quebec and Ontario have started pension reform.
In Ontario, a call for consultation on regulations regarding the conversion of Single Employer Pension Plans to Jointly Sponsored Pension Plans (JSPP) has just been put out and our previous post describes some of the issues. One part being considered for a JSPP should clearly be opposed by pensioners….the removal of the protection of Section 14 of the Pension Benefits Act, which invalidates any revision that seeks to reduce benefits.
The other issue we are looking at is the one of informed consent to the conversion and how it is structured. The level of consent is one of the items up for discussion and in other areas unions can and will consent on behalf of their members, but if pensioners disagree, they must object to a proposal. If more than one third of the pensioners object to a proposal, then consent is not given….but it becomes imperative that we are able to contact as many as possible, if there is any confusion about what is being proposed.
We believe that more information given to more pensioners is advantageous and we hope to convince many others of the same thing. Please consider joining the ONPA or talking to a retiree who does not have internet access and letting them know their membership is critical.
The Ministry of Finance has called for consultation on their proposed regulations covering the conversion of Single Employer Pension Plans to Jointly Sponsored Pension Plans.
As you may remember, the Solvency Relief Application filed by Ontario Northland back in 2011 contained the following under
D2 Framework for Change
(the last bullet) Commitment to continued exploration of greater sharing of risk and governance through conversion to joint sponsorship for future service.
There were other measures contained in that application, one of which was increased contributions, which the unions and the company subsequently agreed to. In Aug of 2014, I asked the company the following
Q. Is the company still committed to all the other items in Section D2 of the Solvency Relief Application?
A. The group that made the recommendation used the framework in D2 in their analysis of the various alternatives to achieve a more sustainable plan. In the end it was determined that increasing employee contributions would be sufficient to meet the funding target. The health of the plan will continue to be monitored and if it is determined that further action must be taken then we will bring back the committee that made the initial recommendation and have them look at alternatives and make a recommendation.
I am working with CFP to determine what is our best response to this call for consultations and will update in the near future. We need to respond quickly as the call for consultation has a deadline of Feb 27th.
Any input would be greatly appreciated Thank you