The Canadian Association of Retired Persons is calling out the federal government, saying it’s unfair the pensions of Sears Holding Corp.’s American employees will be protected by the U.S.’s Pension Benefit Guaranty Corp. while Canadian employees will see benefits cuts.
The Canadian operation has been under court-ordered liquidation since June 2017, and Ontario’s superintendent of financial services ordered a windup of the Canadian pension fund retroactive to October 2017. ”Earlier this year, all Canadian Sears’ pensioners lost their medical and dental benefits, and those outside of Ontario took a massive 30 per cent cut in their pensions,” noted a release by the CARP.
Alongside the different outcomes facing the retailer’s Canadian and U.S. employees, the CARP stressed that protections on a national level aren’t consistent for Canadian plan members, suggesting the federal government should act to change this.
“It’s time for the government to take decisive action to protect Canadian pensioners,” said Wanda Morris, chief advocacy and engagement officer at the CARP, in a press release. “Pensioners have better protection in the U.S. than Canada. Canadian pensioners have been shortchanged while their U.S. counterparts enjoy real protection.”
The CARP noted Bill C-405, introduced this week by Erin O’Toole, member of parliament for Durham, would mean some improvements to pension protection and increased flexibility. The bill would amend the Pension Benefits Standards Act, laying out what should happen if a company is under liquidation through the Companies’ Creditors Arrangement Act or Part III of the Bankruptcy and Insolvency Act. If the company would need more than its total assets to satisfy the needs of the pension plan it could, pending the consent of members and beneficiaries, change the structure of the plan and its benefits or apply to the superintendent to transfer the pension plan’s assets to another plan.
However, while the bill represents a step forward, it won’t bring conditions in line with the U.S. or Britain’s pension protections, the CARP said. As well, federal government has yet to act on its election promise to consult on how to best protect Canadian pensioners, added the CARP.