New Democrat Pension Critic Wayne Marston reintroduced legislation today to put pensioners ahead of creditors when their former employers go bankrupt.
The proposed Pension Protection Act would move pensioners to the front of the line of creditors to be paid out during bankruptcy or restructuring proceedings.
Pensions are earned, explains Marston, and should be recognized as deferred wages. Currently, when a company goes into bankruptcy, pensions are considered unsecured debt, and only paid out from the company’s remaining assets after the Crown, banks and other investors get their money.
“At the present time, someone who has been retired for a decade, after working for a company for 30 years, can suddenly find their pension cut by upwards to 40% through no fault of their own, simply because her former employer goes into bankruptcy,” says NDP Deputy Pension Critic, Alain Giguère. “This is wrong, and the law must be changed.”