The Association of Canadian Pension Management is calling on the federal government to take caution in creating any new significant disincentives “that would push more corporations to abandon their DB plans.”
In its response to the government’s consultation on enhancing Canadians’ retirement security, the association said the best protection for workers’ and retirees’ pensions is a strong employer. “While a number of pension, corporate and insolvency options can be explored, to the extent that some options end up accelerating the insolvency of the employer may not be in the ultimate best interest in the employees and retirees.”
The ACPM believes these options are “inherently complex” and encourage the government to be cautious in its analysis.
It does, however, support the federal government’s review of approaches to address the security of the pension, wage and benefit entitlements for workers and retirees.
“While there have been a few high profile corporate failures over the past two decades that have led to pension and benefit reductions, the occurrence of corporate failures with DB plans is fairly infrequent,” said the report. “The sad reality, however, is that even in the case of a corporate failure that results in a reduction in DB pensions, we suspect the vast majority of affected members and pensioners would have been worse off had they never had a pension in the first place.”