Bill C-27 was introduced by federal Finance Minister Bill Morneau in Parliament in October 2016, and it would allow Crown corporations and federally regulated employers to push their employees to surrender their defined benefit pension plans in favour of target benefit plans.
Well-managed, disciplined defined benefit pension plans are proven to make retirement secure, and to contribute significantly to our economy in the form of consumer spending and taxes, generating business growth and employment in our community.
Decent retirement income security is linked too with better health, less But Bill C-27 could undo the retirement security earned by millions of working and retired middle class Canadians in defined benefit plans.
Employers promised employees and retirees defined benefit pensions as part of their compensation. Pensions are a form of deferred wages. Bill C-27 could permit employers to renege on that promise, and that’s wrong: a deal is a deal.
Bill C-27 is said to be a, “voluntary pension option” that requires individuals, to “consent to surrender” or trade their defined benefit pension for a target benefit pension, but this is misleading.
This could have hidden negative consequences for all: pension reductions and less secure retirements for those who opt to transfer from a defined benefit to a target benefit plan; jeopardized stability and sustainability of defined benefit plans for those who opt to remain in them; and difficult decisions for many vulnerable seniors to make on the pension income promised to them. This is unfair. In 2015, Prime Minister Trudeau clearly promised to the National Association of Federal Retirees in writing that defined benefit plans, “which have already been paid for by employees and pensioners, should not be retroactively changed into target benefit plans.” And yet, Bill C-27 would permit exactly that.
Done fairly and in the right way, target benefit plans could make retirement more secure and dignified for many Canadians. But Bill C-27 is not the way to do this.
I hope our community will rally around this issue. Learn more about this issue and why it matters to us all. Organizations are working together and have information available at www.honouryourpromise.ca.
Talk to your MP, and let them know you expect them to stand up for the retirement security earned by millions of middle class working and retired Canadians.