With the pension woes at Sears Canada Inc. in the spotlight, the political parties have been busy touting their solutions to the defined benefit conundrum.

This fall, parliamentarians from both the Bloc Québécois and the New Democratic Party put forth private members’ bills aimed at boosting the priority of pension obligations during bankruptcy and restructuring situations. Retiree advocacy groups have stepped up the calls for change, with CARP (formerly the Canadian Association of Retired Persons) launching a petition urging the government to change the law to put pensioners ahead of other creditors.

Read: NDP tables bill to protect employees’ pensions, retiree benefits

The situation once again brings up the familiar debates over the balance between the desire to protect members of pension plans and the concern about whether creditors will lend to companies if they know pension obligations will rank ahead of their claims in a bankruptcy scenario. It’s a legitimate concern but it’s time for a more fulsome debate on the pension issue to consider a range of solutions.

While the financing issue is real, the federal government has, in fact, acted in the relatively recent past to boost protections for workers in bankruptcy scenarios. In 2008, the government introduced the Wage Earner Protection Program Act to ensure workers could recover unpaid wages and other amounts owing when an employer ends up in bankruptcy or receivership. Employees who receive payments through the program must sign over their wage claim to the government, which then seeks to recover those amounts from the employer through the bankruptcy or receivership proceedings.

In 2017, the program covers wages up to about $4,000, which is likely less than would be at issue when it comes to a company with a large pension deficit. Still, the program does demonstrate the government has shown itself to be willing to act on those types of concerns.

There are other issues and solutions at play as well. In the United States, the Pension Benefit Guaranty Corp. guarantees a maximum of US$5,369 per month for workers who begin receiving payments from the federal agency at age 65. And when it comes to companies like Sears Canada, a big focus of the controversy has been on the hundreds of millions in dividends paid out to company shareholders as the struggling retailer sold off assets in recent years. The situation has led to calls to restrict dividend payments when companies have pension deficits.

Read: Liberals show some openness to reform amid calls to protect pensions in insolvencies

Yet others suggest governments should do more to ensure companies fully fund their pension obligations in the first place. Pension regulations exist to address that issue, but governments have been walking a fine line in recent years as they try to enforce rules around special payments while not pushing companies into financial trouble or dissuading them from maintaining their defined benefit plans in the first place. Hence the repeated moves to offer temporary solvency relief and the trend away from solvency requirements more generally.

All of that is to say that, while any changes will inevitably create winners and losers, there are plenty of solutions to consider. Maybe critics are right when they suggest that giving priority to pension obligations wouldn’t be the end of the world. But even if it would, it’s time for a broader debate about the range of solutions available to address the pension dilemma. It’s clear that something has to change.

Glenn Kauth is the editor of Benefits Canada.

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Copyright © 2018 Transcontinental Media G.P. This article first appeared in Benefits Canada.

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