Air Canada may get rid of its pension plan deficit, which was $3.7 billion at the end of January, in seven years.
At an investor day conference on Monday, the country’s largest airline said pension plan changes and funding relief obligations it recently received from the federal government could help reduce the solvency deficit to zero by 2020.
In March, Air Canada received funding relief from the federal government and agreed to make payments of at least $150 million annually over seven years to reduce the shortfall.
Without that agreement, the airline would have had to contribute $800 million to the plan next year. That might have been difficult, as 2012’s net profit was $131 million on revenues of $12.1 billion.
We’ll have more about how pensions are faring in the June issue of Benefits Canada, which will feature our Top 100 Pension Plans Report.